Annual growth of approximately 21.7% has been achieved by using technology to create new and disruptive offers
According to analysis by Insuramore, the value of revenues earned worldwide by MGA, MGU and cover-holder groups (aka delegated underwriting authority groups) was around $15.23 billion in 2021, signifying annual growth in this sector of approximately 21.7% before adjusting for inflation.
This is substantially ahead of the growth rate of world’s insurance broking sector which is believed to have advanced in value by almost 12.5% in 2021.
While this growth has been caused in a few cases by M&A activity, most MGA groups with triple-digit annual growth have achieved this through applying innovative technology to come up with genuinely new and disruptive offers in specific insurance categories.
As a group, Brown & Brown was ranked first globally in this arena in 2021 and has been building on that position during 2022 through the subsequent acquisitions of UK-based intermediary Global Risk Partners (GRP) and Orchid Underwriters.
Munich Re generated highest MGA returns in 2021
By ownership, 59 of the top 300 groups in this space in 2021 are classifiable as broker-owned, 26 as insurer-owned and the remaining 215 as independent (albeit many of these are backed by private equity firms).
Among insurer-owned groups, Munich Re generated the highest revenues from proprietary MGA business in 2021 while Hagerty was the largest independent group.
By location of headquarters, and with 165 in total, the US played host to the most MGA groups in the top 300 with the UK (54), the Netherlands (12), South Africa (11) and Germany (11) coming next on this count.
Globally, there are approximately 1,150 enterprises that are active in the MGA sector and for most of them it is their exclusive focus of activity.
The MGA sector seems set to remain a hotbed of innovation with global revenues attributable to it likely to pass $20 billion by 2023 signifying premiums intermediated by it worth more than $160 billion by that year.