’Being more nimble and agile and the removal of traditional processes make MGAs a natural choice,’ says chief executive

Insurers are turning to managing general agents (MGAs) more often for underwriting expertise in certain product lines.

That was according to Mike Keating, chief executive of the Managing General Agents Association (MGAA), who told Insurance Times that that the partnership between insurers and MGAs was “flourishing”.

Keating made the comments at a time when the MGA sector continues to grow.

According to an August 2022 article by McKinsey and Company, entitled Insurance MGAs: Opportunities and considerations for investors, the UK has in excess of “300 MGAs placing more than 10% of the United Kingdom’s £47bn in general insurance premiums”.

Keating said: “Through the lens of the insurer, they now recognise that to get access to underwriting expertise in certain product lines – and sometimes distribution – they are taking a serious look and asking, ’is there a better way of doing this rather than designing and doing it ourselves?’”

“We know that for big insurers in particular, some of the challenges are speed to market and legacy IT systems.”

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This came after Insurance Times’ Five Star Rating Report: MGA market 2023/24published in January 2024, showed that MGAs have the potential to plug poor service gaps that insurers have failed to fill.

For example, a broker respondent from the North West said: “General service standards in the industry are dropping and provided secure capacity is available through MGAs, their service offering can provide a solution for brokers to rival the composites and often exceed them.”

Keating said MGA’s can be more “nimble and agile” and don’t have legacy systems, meaning insurers may be more inclined to turn to an MGA.

”The efficiency basis, being more nimble and agile and the removal of traditional processes make MGAs a natural choice,” he said.

“They don’t suffer from legacy systems and have agility, innovation and entrepreneurship.”