Interest in the European market has also increased 

Confidence is recovering in the MGA market despite the ongoing Covid-19 pandemic, according to global law firm Clyde and Co’s latest survey.

The report, entitled 2021: A year of renewal for MGAs?, surveyed more than 50 insurers and MGAs in the summer of 2021. This revealed that 69% of MGAs and 33% of carriers expect partnerships between the organisations to increase in 2022.

Meanwhile, 84% of MGAs said the impact of Covid-19 on capacity has been neutral or positive, compared to 74% of carriers that believed the same.

James Cooper, head of insurance at Clyde and Co, said: “Our survey shows that MGA confidence has staged a significant recovery from its pandemic low in 2020 and is at its highest level in three years, with over two-thirds of businesses expecting to expand carrier partnerships in 2022.”

Surviving and thriving

Several factors are driving MGA confidence - the most dominant being that many MGAs have survived and thrived following the testing conditions triggered by Lloyd’s of London’s Decile 10 reform programme and the onset of the coronavirus pandemic.

The Decile 10 initiative aims to address any deteriorating underwriting performance by ordering Lloyd’s syndicates with three consecutive years of profit loss to identify their worst performing 10% of business and establish a remediation plan.

Although the popularity of the Lloyd’s market for MGA business was waning when Clyde and Co’s research was conducted in 2019 and 2020 - due to the impact of the Decile 10 remediation process - this year, however, has seen a significant reversal.

The market is now more popular than ever, with 47% of carriers believing that it provides the best environment in which to grow and develop MGA business, versus only 12% that agreed with this sentiment last year.

The appeal of the Lloyd’s market is more muted for MGAs - around 20% favour Lloyd’s, which is still an improvement of three percentage points compared to last year.

Cooper said: “The change in fortune for Lloyd’s is partly due to the changes initiated as part of the Lloyd’s Blueprint reforms, as well as the arrival of the harder market and [an] appetite to write more business. This enthusiasm for Lloyd’s is positive for its business and for brokers and their customers in terms of choice.”

Meanwhile, the report showed that the impact of Covid-19 on capacity has not been long-lasting for the industry.

Although carriers remain cautious about expanding the number of MGA partnerships they have, sentiment is definitely improving.

Around 84% of MGAs say the impact of the pandemic on capacity has been neutral or positive, compared with 74% of carriers that feel the same way. This is a distinct improvement since last year.

Cooper added: “Our research shows that while we are not yet back to normal in terms of capacity availability for MGAs, it is already clear that Covid-19 has not precipitated a widescale insurance disaster.

“The big threat of an economic armageddon has not materialised and confidence among the carrier and MGA community has improved.”

Coverage issues

The survey demonstrated that while the impact of the pandemic has been limited in terms of capacity, it has - however - highlighted some coverage issues.

For example, it found that 80% of carriers and 56% of MGAs said that the focus on policy wordings has increased following the pandemic.

Plus, 87% of carriers and 67% of MGAs think the claims process needs improvement. Possible solutions that gained support from respondents included faster communications, clearer processes and the automation of lower value claims.

Cooper said: “As we move forward, there is likely to be enhanced scrutiny over wordings, more focus on due diligence when onboarding new relationships and greater attention paid to claims performance.

”While our research shows the industry considers that work remains to be done, it is clear that markets, including Lloyd’s, are receptive and opportunities are there for the MGAs that can deliver.”


Interest in the European market has also increased this year, with 13% of carriers identifying Europe as a growth market compared to only 6% that thought this last year. Approximately 9% of MGAs think that Europe is the best market for growth.

Cooper continued: “As we move into next year, there is likely to be more positive sentiment. The sector is seeing an influx of capital and talent and there are more MGAs forming and interest in investment or even mergers.”

He said that both the US and Europe are seeing a revival in the MGA market.

While the US continues to be the world’s largest insurance market, Cooper believes there are significant opportunities for players in the UK - including traditional MGAs to insurtech startups.