The Potential for Growth
The MGA market is showing promise, remaining buoyant despite capacity restraints in a hard market.
In fact, MGA premiums worldwide reached a record $60bm (£53bn) in 2021, up from $51bn (£45bn) the year before , whilst “revenues earned globally by MGAs amounted to more than $15bn in 2021, up by around 21.7% relative to 2020″.
Build to be nimble, MGAs have the agility and speed to market needed to weather tough conditions, such as those arising from Brexit, COVID and the war in Ukraine. As Modern Insurance Magazine states: “MGAs are becoming an increasingly significant part of the global insurance market, and sector revenue is growing at an improessing clip despite the challenging economic environment .
MGAs: The Current Picture
Market commentators around the world paint a rosy picture regarding the potential for growth in the future of the MGA Markets:
“In the United Kingdom, there are more than 300 MGAs placing more than 10 percent of the United Kingdom’s £47 billion in general insurance premiums .”
According to McKinsey: “In the United States, there are about 600 MGAs, which collectively place $47 billion in premiums—equivalent to roughly 7 percent of the overall commercial and personal insurance markets.”
Meanwhile, “All the runes are suggesting that the early part of this decade is going to see a surge in interest in managing general agents around the globe but particularly in Asia.”
And “The MGA model is still proving popular in … Australia, especially where insurers want to penetrate further into markets where they lack the appropriate depth or breadth of underwriting expertise.”
But is all as it seems?
Growing too Fast?
With numerous positive reports surfacing about the prospects for the MGA market, there comes a risk of over-confidence, particularly in a difficult market. Not all new businesses succeed, after all.
In spite of the promising outlook, there are a number of significant challenges for the industry to overcome to really succeed in uncertain economic times. From the financial (such as securing capacity, managing potentially volatile relationships with insurers, profitability concerns, etc.) to the operational (e.g. securing the investment required to get a new business off the ground, claims inflation, implementing innovative technology, obtaining quality talent, etc.)
Taking a pragmatic approach, Insurance Business UK offers this advice to those in the market: “A streetwise MGA knows not to go too broadly, too quickly … but rather to focus on its core product and on making that really work for all relevant stakeholders.”
Interested in Starting an MGA?
If you’re thinking about building your own MGA and are looking for practical advice/support, speak with NuVenture: email@example.com
 Insurance Times: In Focus: MGAs are Undoubtedly ‘the Sexy Side’ of Insurance – But What is Driving their Increasing Relevance (7th November 2022)
 &  Modern Insurance Magazine: MGAs: The Global Outlook (Issue 55; 22nd September 2022)
 &  McKinsey: “Insurance MGAs: Opportunities and Considerations for Investors” (August 30, 2022)
 Asia Insurance Review – https://www.asiainsurancereview.com/Magazine/ReadMagazineArticle?aid=44441 (April 2021)
 Clyde & Co Insurance Growth Report – February 2023
 Insurance Business UK: Director on Why it’s “now more difficult to launch an MGA than it was a year ago” (Feb 13, 2023)