A new report by investment management firm Conning shows that the managing general agent (MGA) and program market continued its upward trajectory in 2020 with premium growth outpacing the overall property-casualty market.
Despite the pandemic’s challenges and associated uncertainties, Conning found that many MGAs and program administrators continued to thrive last year.
Some of the COVID-19 stresses were mitigated by the firming market conditions which started in 2019 and continued throughout 2020 and into 2021.
Insurers were thus able to achieve organic growth with the help of improved pricing across most lines of business, while MGAs, MGUs, and program administrators continued to adapt and grow in an environment where many businesses were shutting down.
What’s more, the US economy is starting to regain momentum after a COVID-induced dip last year, which should promote organic growth in 2021.
“The Covid-19-related economic, health, and employment challenges that emerged in 2020 were tough on those MGAs and program administrators that focused on the most affected sectors of the economy,” said Alyssa Gittleman, a Vice President in Insurance Research at Conning.
“It appears, however, that the concerns relating to cash flow, new business production, and lost programs were somewhat mitigated by a hard market that had a favorable impact on almost every line of business,” Gittleman continued.
“The fronting market continued its double-digit growth pace in 2020, with new fronting insurers launched even as the pandemic was taking hold,” said Steve Webersen, Head of Insurance Research at Conning. “We expect new formations and M&A will be an interesting feature to track in this market for years to come.”
