MGAs offer alternative channel as brokers struggle to place niche fleet risks

Placement gaps in niche areas of the commercial motor market are increasingly being bridged by specialist MGAs, new research from Direct Commercial (DCL) has found.

The research – based on a commissioned poll of 111 UK commercial motor brokers – found that brokers in some sectors of the fleet market are continuing to face challenges with low insurer appetite and capacity.

Some 71% of brokers, for example, identified troubles placing business within the waste, hazardous materials and recycling fleet sector.

DCL’s research indicated that MGAs are increasingly bridging this gap, particularly in “sectors with higher claims severity, more complex operational exposures or inconsistent insurer appetite”.

It pointed to the fact that 72% of brokers reported that only MGAs had produced a viable quote or terms for a given niche commercial motor placement on at least one occasion, while 39% reported their confidence in placing such risks was “much higher” than it was 12 months ago.

The firm added that the trends reflect “growing recognition that specialist MGAs are increasingly combining underwriting expertise, stable appetite and responsive service in ways that brokers value highly when dealing with more difficult placements”.

Important role

Joe Hantson, deputy chief executive at DCL, said: “What this research shows is that pressures still exist in certain parts of the commercial motor market, particularly within more specialist or operationally complex fleet sectors.

“But it also highlights the increasingly important role specialist MGAs are playing in helping brokers secure viable solutions for clients where mainstream appetite may be more limited.

“At DCL, we continue to invest in specialist underwriting capability, tailored products and our in-house claims team because brokers increasingly need reliable markets that can support difficult placements consistently and over the long term.”