Over the past decade, the MGA market has continued to grow globally, defying predictions of market saturation. Insurers appreciate the agility and innovation opportunities that MGAs offer.

The growth of MGAs has been primarily driven by the US and UK, with most major global insurance markets following the trend over the past decade. Recently, less developed insurance markets have observed the innovation that MGAs can bring to end customers and some have taken steps to encourage their own MGA ecosystem to develop.

Although innovation is widespread, the growth curve for MGAs can be summarised by two key themes. Firstly, MGAs are used in almost every country to support expansion into niche or emerging lines of insurance. Secondly, they provide innovative and cost-effective solutions to the consumer market.

Technology is a driving force behind these innovative solutions. MGAs are leveraging advanced tools like artificial intelligence and data analytics to improve underwriting processes, streamline claims management, and enhance customer engagement.

Most regions are recognising the expanding role for MGAs in the technology sector. This growth is not only about using technology to improve processes; MGAs are also becoming an effective route to market for insurtech developers, or as a digital distribution platform for traditional market players. This model provides a cost-effective option for technology entrepreneurs to establish insurance platforms that distribute innovative insurance solutions.

It also fosters partnerships between the technology industry and brokers/insurers to develop new products using cutting-edge technology.

Niche and emerging lines of insurance are increasingly seen as a natural fit for MGAs, both in an insurance and reinsurance capacity. This specialised underwriting expertise found within underwriting agencies allows them to respond to market demands more quickly than traditional carriers.

Additionally, the ongoing commoditisation of personal lines combined with rising property values and premiums, is motivating insurers to outsource the marketing and distribution of specialised insurance lines to MGAs.

Cyber insurance is recognised as one of the leading growth areas where MGAs are introducing innovative concepts to a global market that has faced a persistent lack of capacity and a gradual tightening of terms from major insurers. Cyber is also one of many insurance lines where the flexibility of the MGA model can adapt to various underwriting approaches.

MGAs can also quickly launch or pivot to meet emerging local demands. For example, in regions like the UAE, where sovereign wealth funds are investing heavily in large infrastructure projects, there is an increasing need for specialised construction coverage. This demand is likely to benefit the MGA market, with the industry regarded as ‘low-hanging fruit’.

New ideas can reach the market more rapidly through the MGA distribution model, posing a lower risk to large carriers that wish to experiment with these concepts. MGAs serve as an excellent innovation funnel, providing significant value to our industry.

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