While some managing general agencies are thriving, others are being negatively affected as insurers seeking greater controls in a tightening market pull back from their use, say observers.
Some MGAs “are having difficulty getting their programs renewed, and the carriers are being much more selective in whom they want to do business with,” said Joel Cavaness, president of Rolling Meadows, Illinois-based Risk Placement Services Inc., a unit of Arthur J. Gallagher & Co.
Some insurers “are talking to us about just making sure they have what they feel are adequate controls as they continue to refine their risk appetite,” said David Blades, senior financial analyst at Oldwick, New Jersey-based A.M. Best Co. Inc.
Timothy Turner, Chicago-based president and CEO of R-T Specialty LLC, a division of Ryan Specialty Group LLC, said while his firm has 26 MGAs, all profitable, “It’s getting tougher and tougher to get capacity” for these managing general underwriters, “especially if you’re not profitable.”
However, Eric Blecker, Hartford, Connecticut-based president of Northfield Excess & Surplus lines, a Travelers Cos. Inc. unit, said, “We do a fair amount of contract binding business, and it remains, I think, a robust and competitive field, although there certainly could be carriers that may be pulling back.”
MGAs with long-term experience in niche areas such as antique cars “still make for a very compelling proposition,” said Matthew Dolan, Simsbury, Connecticut-based president of North American specialty for Liberty Mutual Insurance Co.
