Global Insurance Law Connect (GILC) has launched its report,
Innovation abounds: opportunities for growth in the global MGA
market, providing insights from 18 countries into the
proliferation of MGAs in the global insurance market and the
distinct regulatory environments in each jurisdiction.
The report found that the use of MGAs varies significantly around
the world. In certain markets, MGAs are used to fill capacity gaps
and introduce niche underwriting ideas, while in others they can
help larger insurers remain innovative or showcase and support
outsourcing models for claims and distribution.
MGAs expected to take-off in less developed
markets
The 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. The picture across Europe is more
variable, with most European markets hosting some type of MGA
ecosystem. Many markets are still in the early stages of
development, providing opportunities for a future growth
surge.
In less-developed markets, MGAs are also being recognised as a
useful innovation tool and in some places, growth could be
explosive. The wider Asia-Pacific market is expected to be a big
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 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.
Risk innovation
Although innovation is widespread, the growth curve for MGAs shows
two major themes. MGAs are used in almost every country to support
expansion into niche or emerging lines and to bring innovative and
cost-effective solutions to the consumer market.
Almost all countries see a growing role for MGAs in emerging and
developing markets including in the technology space, and in
providing cover for and assessing risks associated with climate
change. They also play a role in managing claims in the aftermath
of worsening natural catastrophes.
Filling niche capacity gaps
Many consider niche and emerging lines as a natural fit for MGAs to
provide insurance and reinsurance capacity. This is due to the
specialist underwriting knowledge available within underwriting
agencies, allowing them to respond to market demand more quickly
than traditional carriers.
BUREN has contributed the China insights to the report.
To download the report, please click here
Originally published 3 October 2024
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