Hope for hardening after ‘brutal’ and ‘unprecedented’ rate drops

Softening market conditions have been “brutal” and “unprecedented” for MGAs across certain lines, but a careful focus on claims leakage, pricing and diversification has helped mitigate the impact of rate drops.

This is according to Karen Hogg, chief operating officer at motor MGA Stella Insurance, speaking on an Insurance DataLab webinar, The New Rules of MGA Success, released today (13 July 2026).

Hogg highlighted how the market cycle had affected her firm, most notably its van insurance offering: “It’s a soft market and we’ve been here before, but this is an unprecedented 20% rate drop for van – we’ve never experienced that in a soft market before.

“For us, it was just a brutal time. Coming to market with growth plans, thinking you’ve got all your ducks lined up, and it just became so challenging. We expected to see a hardening by now and we’re still hopeful going into [the second half of the year] that we’ll see that, but we’re encouraged that the rate declines have slowed.”

Hogg pointed to improvements made elsewhere in the business that had helped mitigate rate drops, including forensically assessing claims leakage with their third party claims administrators and developing an in-house pricing team to more accurately price risk.

“Longer term, we definitely need to diversify – broadening our footprint in general on the lines that we have and then how we expand into news lines as well. I think it is a tough market to be in, but if you’re really focused on those things then it definitely helps,” she added.

Trading furiously

Mike Keating, chief executive at the Managing General Agents’ Association, agreed that his members had been feeling the strain of the soft market.

Keating explained: “It’s real and it’s real across most product lines – it’s not a myth. What my members say to me is that they’re trading furiously and everyone is working twice as hard.

“What I would share is something that Nick Houghton [chief executive of JMG Group] shared at our conference last week. He effectively said that the level of service at MGAs is absolutely unrivalled.

“Brokers are obviously dealing with the paying customer, they are under huge pressure. Providing MGAs maintain that laser-like focus on their distribution and continue to deliver that unrivalled level of service, then those MGAs will always be attractive to the broker community and will survive.”

Equally important for surviving the cycle, added Tim Jones, director at MPR Underwriting, is remembering the importance of solid fundamentals and discipline.

He concluded: “[The soft market] is tough. I don’t think anyone seems to enjoy it, and I think growth is more challenging.

“Underwriting discipline has to be front and centre. There’s temptation for people to chase growth – broadening their appetite, broadening their cover, chasing pricing – but for longevity and sustainability as an MGA, you really need that discipline front and centre.”