There is no arguing about the strength of the managing general agent (MGA) market in 2023. MGAs’ agility, innovation, and focus on specialty and complex lines have positioned them for continuous year-over-year growth. Conning reported the MGA market grew by 24% in 2022, with associated premium volumes estimated to be more than $85 billion last year.
Much of MGAs’ success can be attributed to how versatile they can be. Over the last decade, ReSource Pro has identified and tracked well over 100 startup MGAs/MGUs deployed under various business models, including line- and segment-focused, digital platform, global specialty, and digital native MGAs. At the same time, incumbent MGAs are also leveraging advanced tech capabilities and new channel strategies to propel their growth in a market with increasing competition. The latter has become especially critical as MGAs have a broader role in the distribution landscape and seek to expand their market reach in an increasingly hardening market.
A new ReSource Pro research report examines the channel distribution plans of MGAs in 2023, including their current partnerships, how they expect distribution to change in the next few years, and their strategies to expand various channel partners over the next few years. Considering the many challenges in the market today, such as rapid technological advancements, evolving customer expectations, and a volatile economic environment, MGAs are exploring aggressive plans to grow certain distribution channels.
While MGAs continue to expand and add foundational channels, such as wholesalers and retail agents/brokers, there is an interesting shift in their approach to Insurtech. A third of MGAs are planning to add Insurtech partners over the next three years, and 40% expect to expand/grow their current partners in the space, such as distribution platforms or digital agencies. Affinity relationships and partnerships with other MGAs/MGUs are also likely to develop significantly among more than half of MGAs.
Regardless of the channel partner an MGA chooses, conducting thorough due diligence and ensuring strategic priorities align across parties is essential. Identifying partners that strengthen market position will be key to MGAs’ long-term success.
For more information on the channel strategies of MGAs and MGUs, including recommendations to enhance plans, read our recent research report, “Channel Strategies and Plans for MGAs: A View of MGAs’ Growing Footprint in 2023.” This report is part of ReSource Pro Consulting’s research series based on surveys and interviews of carriers, agencies, MGAs, and others in the distribution channel. To learn more about the capabilities we offer to underwriting organizations, visit our Consulting page.