The ongoing wave of consolidation across the insurance industry, coupled with an entrepreneurial spirit of some underwriters, is resulting in a growing number of Managing General Agents (MGAs) in the UK insurance sector, according to the Chairman of The Managing General Agents’ Association (MGAA), Charles Manchester.
Addressing an audience at the opening of the MGAA’s fourth annual conference, which focused on the future of insurance, Manchester explained that insurance industry consolidation was forcing some underwriters away from large companies, while others have found themselves surplus to requirements when mergers take place.
“It’s difficult to be an entrepreneur in a giant company but it’s not difficult for a giant company to recognise this and support entrepreneurial talent,” said Manchester. Adding that entrepreneurial talent is being drawn towards MGAs as an easier “path to access profitable underwriting niches.”
He continued to explain that an increasing number of underwriting InsurTech entities are evolving towards the MGA model, which is contributed to the fact the MGAA has expanded to include nearly 140 MGAs in 2018, writing a combined gross written premium well above £5 billion.
But while growth in the sector is promising, Manchester warned against wishing for what might be “the shortest hard market in history”, explaining that during a hard market, people lose jobs and poor performing MGAs lose their paper.
Finally, Manchester said the MGAA is to launch the MGA training tool, called MGA Assist, in association with the Chartered Insurance Institute (CII).