MGAs drive innovation and growth in emerging insurance markets: GILC

Managing General Agents (MGAs) are becoming increasingly vital in emerging and developing markets, offering insurers greater flexibility, innovation, and niche underwriting solutions, a recent Global Insurance Law Connect (GILC) report has highlighted.

It revealed that MGAs are utilised differently across the globe. In some regions, they help fill capacity gaps or introduce niche underwriting ideas, while in others, they assist larger insurers in staying innovative and support outsourcing for claims and distribution.

Gillian Davidson, Chair of Global Insurance Law Connect and Partner at Sparke Helmore, noted: “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.”

MGAs are proving to be an asset to the insurance industry, as demonstrated by their continued growth and expanding global presence.

The U.S. remains the largest market for MGAs, with the UK also experiencing notable growth. In Europe, MGA presence varies, with most markets hosting some form of MGA ecosystem. Many of these markets are still developing, offering potential for significant future growth.

In less developed regions, MGAs are seen as key drivers of innovation, with certain areas expected to experience rapid growth. The wider Asia-Pacific region, including China, is expected to be a significant growth area for MGAs, and Latin America is also showing potential, with Brazil leading the way.

While innovation is widespread, two major themes stand out in MGA growth: they are used across nearly every country to expand into niche or emerging sectors, and they provide innovative, cost-effective solutions to the consumer market.

Many countries see MGAs playing an increasing role in emerging and developing markets, particularly in technology and addressing risks related to climate change. They also help manage claims following natural disasters.

Niche and emerging markets are considered a natural fit for MGAs due to their specialised underwriting expertise, which allows them to respond to market needs faster than traditional insurers.

Davidson concluded: “Essentially, MGAs serve as an informal zone for more experimental products and ideas worldwide. Their backing by recognised capacity gives them credibility, while their independent management and underwriting allows them to think differently about how to service clients and solve new risk problems, such as how to insure vulnerable properties in the era of climate change. These attributes make them a valuable part of the global insurance ecosystem, attracting an increasing amount of GWP and interest from investors, including private equity.”

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