Working with managing general agents offers a “route to agility and innovation” in service and claims for insurers, according to a report published this week.

Global Insurance Law Connect’s report Innovation Abounds: Opportunities for growth in the global MGA market, suggests that, in certain markets, MGAs are used to fill capacity gaps and introduce niche underwriting ideas, while in others they can help larger insurers stay innovative or showcase and support outsourcing models for claims and distribution.

Gillian Davidson (pictured), chair of Global Insurance Law Connect and Partner at Sparke Helmore, commented: “Despite some recent predictions that the MGA market would soon become saturated, our research found that it continues to be a rapidly growing market that is increasingly providing solutions the commercial and consumer markets have struggled to fulfil.”

Offering insights from 18 countries into the proliferation of MGAs in the global insurance market and the distinct regulatory environments in each jurisdiction, GILC’s report found that in multiple different ways, MGAs are healthy for the insurance market and this is reflected in their ongoing growth and expanding geographical spread.

The US remains the largest market for MGAs, while the UK is also experiencing significant growth. Many markets are still in the early stages of development, providing opportunities for a future growth surge.

Asia-Pacific is expected to be a significant growth area for MGAs including in China where MGAs remain in their infancy but are gaining ground in key financial centres. Another secondary market poised for growth, according to GILC, is Latin America. While the maturity of the MGA sector varies greatly between markets, Brazil is leading the way with an increased relevance of MGAs in that country.

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