MGA sector still in growth phase – Mike Keating

The MGA sector, while maturing and consolidating its experience, is still very much in a growth phase, with new firms continuing to blossom and the inherent strengths of the sector putting it at the forefront of an artificial intelligence (AI) driven wave of innovation.

This is according to Mike Keating, chief executive of the Managing General Agents’ Association (MGAA), who spoke to Insurance Times at last week’s MGAA Broker Exchange event.

Asked if the sector was entering a phase of consolidation, or still demonstrating strong growth credentials, Keating explained: “I still see it in a growth stage. If you’re looking at new MGA entrants, the activity is still very healthy and you can see that through the excellent incubator organisations such as Mission Underwriting, Advent and Davis Group.

“They are incubating more and more underwriting expertise and I expect to see some new platforms emerging as well, so the market will continue to grow from that base.”

Keating also felt that, beyond growth, and through the appearance of new players, many MGAs have been working hard to improve their core offerings, which has had the two-fold impact of attracting both insurer business and new talent.

“I think the level of service, innovation and entrepreneurship – the nature of the MGA market – continues to attract the right talent,” he said.

”The ability for MGAs to ingest data and use AI tools on top of what is already a clean IT stack gives them a competitive advantage.” 

This technological proficiency has also continued to draw insurers to the idea of deploying capital into new markets via MGAs.

Keating added: “When you look through a carrier lens, the question they ask is – do we build this ourselves, and how long does that take, or do we go and deploy to experts that have demonstrated they can look after our balance sheet?”

Democratised innovation

As previously reported by Insurance Times, with the advent of AI, many in the industry feel that it has never been easier to put new ideas in front of customers.

Keating, however, said that, far from eating into the innovation-based advantage of MGAs, the new wave of data and development will reinforce their competitive advantage.

He concluded: “They have this agility and a nimble nature. They have great access to data and they can pivot very quickly. It is the nature of a nimble, innovative and entrepreneurial business, which can spot something through real time data and say we need to pivot quickly.

“And, of course, even at large MGAs, the chain of command is quite small. It’s not a criticism of large insurers, but sometimes that chain of command is so long that when it gets to someone who’s actually implementing and executing, it’s taken a while.

“When you have the chief executive or managing directing of an MGA that says, ‘we need to do this now’ – it’s done.”