Understanding the Explosive Growth of the MGA Market: Key Insights and Strategic Opportunities for MGAs and Carriers
- Adam Sharf
- Mar 31
- 4 min read
Updated: Apr 2
The managing general agent (MGA) market is undergoing significant transformation and rapid expansion, reshaping the insurance industry's landscape. The "2024 MGA Market and Carrier Analysis" by Aon provides an extensive look into these shifts, revealing critical insights and strategic opportunities for MGAs, MGUs, and carriers. This article consolidates the Aon report into clear, actionable insights to help industry stakeholders make informed strategic decisions in an increasingly competitive environment.
Table of Contents
The Rise of MGAs: A Market Snapshot
According to Aon's comprehensive analysis, the MGA model has shown steadfast growth, with MGAs capturing increasingly larger shares of the property and casualty (P&C) market. Between 2016 and 2023, the direct written premium (DWP) attributed to MGAs surged by an astounding 229%, highlighting the robustness and resilience of this business model.
In 2023 alone, MGAs generated $94.1 billion in direct written premiums, a substantial increase from $76.9 billion in 2022. This impressive growth is propelled by several factors:
Increased formation of new MGAs: A continual influx of new entrants introducing innovative products tailored to niche markets.
Market specialization: Expansion into specialized segments such as cyber insurance and professional liability, which traditional carriers sometimes overlook or underserve.
Rate adjustments: Strategic rate increases, particularly in admitted lines, further boosting premium growth.
Tighter admitted market conditions: MGAs are capitalizing on gaps in coverage left by more cautious, traditional carriers, especially in complex and specialty risks.
Specialty Insurance Lines Drive Growth
One of the most notable drivers of MGA market expansion is the growth of specialty lines. Aon's report particularly emphasizes cyber insurance as an essential area of growth, with issuing carriers writing $320 million in cyber premiums alone in 2023. This specialty represents approximately 6.5% of the entire market, reflecting the rising importance and complexity of managing cyber risks.
Strategic Advantages for Carriers Partnering with MGAs
For carriers, partnerships with MGAs offer strategic advantages such as enhanced distribution capabilities, access to specialized underwriting expertise, and entry into emerging risk markets. Carriers specifically dedicated to the MGA market experienced a remarkable 22% DWP growth from 2022 to 2023. The Aon report underscores that these dedicated carriers significantly outperform their broader industry counterparts, often due to their focused approach and strong MGA relationships.
Interestingly, dedicated MGA carriers display a vastly different portfolio composition compared to the general P&C market. For instance, excess and surplus (E&S) lines constitute 91% of their portfolios, significantly contrasting the general industry, where admitted lines and E&S lines are almost evenly split.
Navigating the MGA Landscape: Practical Insights
Carriers and MGAs can strategically position themselves for sustained profitability by understanding the following market dynamics highlighted by the report:
Geographic Trends
The Southern U.S., particularly Florida and Texas, remains the dominant region for MGA-generated premiums, contributing approximately 50% of total MGA premiums. However, growth in the Western U.S. is becoming increasingly significant. MGAs and carriers may find strategic opportunities by expanding or reinforcing their presence in these rapidly growing regions.
Size Matters: Opportunities for Smaller MGAs
Contrary to some expectations, the Aon report identifies smaller MGAs (those writing less than $500 million in premiums) as collectively dominant, comprising 63.7% of total premiums. These smaller entities often specialize deeply, offering targeted expertise and agility that can swiftly adapt to changing market conditions.
Carriers seeking to diversify their portfolios or explore niche opportunities may consider partnering with these agile and specialized smaller MGAs.
Operational Efficiency and Technological Innovation
In an industry driven by rapid growth and increasing complexity, operational efficiency is paramount. Technologies like Pigeon, which automates the collection and management of underwriting subjectivities, play a critical role in increasing margin. For MGAs, automation streamlines processes, reduces manual errors, and significantly accelerates decision-making, allowing firms to capitalize quickly on new market opportunities. Leveraging tools like Pigeon can provide competitive advantages by enhancing productivity and responsiveness.
Automating Subjectivity Management with Pigeon
Specialty MGAs and carriers spend an average of 90 minutes per policy collecting and managing subjectivities—a costly, manual process that slows down binding and strains underwriting teams.
Pigeon automates this workflow, eliminating email chains, reducing errors, and accelerating time to revenue. Subjectivity checklists are generated instantly and shared through a seamless, branded experience—giving underwriters full visibility while making it easy for brokers and insureds to respond.
Whether you're working with a handful of carriers or hundreds, Pigeon adapts to your process and delivers high leverage at scale, saving hours per policy and dramatically improving broker satisfaction.
In a market where operational efficiency is a competitive edge, Pigeon turns subjectivity collection from a drag on growth into a strategic advantage.
Learn more today by scheduling a demo of Pigeon now!
Loss Ratios and Profitability Insights
The MGA-focused carriers achieved better-than-average loss ratios compared to the broader P&C market in 2023, primarily driven by favorable outcomes in commercial property, including lower catastrophe losses. This highlights the potential profitability of carefully structured MGA partnerships, especially when leveraging specialized underwriting expertise and robust risk management practices.
Strategic Recommendations
To capitalize on these insights, MGAs, MGUs, and carriers should:
Focus on specialization: Develop or deepen expertise in niche markets where traditional insurers are cautious or underserve.
Evaluate MGA partnerships thoroughly: Prioritize relationships with MGAs demonstrating specialized expertise, sound underwriting judgment, and proven profitability.
Leverage data analytics and emerging technology: Adopt advanced data analytics and emerging technologies to improve operational efficiency and underwriting accuracy, enhance risk assessment capabilities, and drive more informed decision-making.
Conclusion
The robust growth and evolution of the MGA market present abundant opportunities for savvy MGAs, MGUs, and carriers. Understanding the underlying market drivers, capitalizing on geographic trends, strategically leveraging specialization, and adopting technological innovations are critical factors that will shape success in the evolving landscape.
Get started with Pigeon today—schedule a demo or start your free trial now!