MGA Sector Revenue is Growing, Says Insuramore

According to an updated ranking and analysis completed by Insuramore (www.insuramore.com/rankings/mgas-mgus/revenues), the value of revenues earned worldwide by MGA, MGU and cover-holder groups (a.k.a. delegated underwriting authority groups) was around USD 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, as reported by Insuramore in a related press release on 7th June 2022, is believed to have advanced in value by almost 12.5% in 2021.

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. In descending order, it is likely to have been followed from second to fifth by Gallagher, Ryan Specialty Group, Amwins and Truist Insurance Holdings.

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, Insuramore judges that Munich Re generated the highest revenues from proprietary MGA business in 2021 while Hagerty was the largest independent group. Furthermore, 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.

As would be expected given the very high industry-wide growth rate, almost all MGA groups experienced an increase in their revenues in 2021 and over 20 of the top 300 are believed likely by Insuramore to have more than doubled their income relative to 2020. 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. Examples include Bestow and Ethos (in life insurance), LeaseLock and Rhino (in rental deposit insurance), Luko (in home insurance), Player’s Health (in sport-related insurance) and a handful of competitors in cyber insurance.

Worldwide, 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. On one hand, their number is being boosted by new launches that aspire to join the cohort of fast-growing disruptors. On the other, there is some downward pressure on the number of groups because of consolidation among them.

For instance, in addition to the purchases of Brown & Brown already referenced, other significant acquisitions in this field since the start of 2022 have seen Appalachian Underwriters taken out by Acrisure, Delta General Agency Corporation acquired by Jencap (itself a part of Galway Insurance Holdings), Insurance Brokers Incorporated bought by XPT, and the integration of both Pearl Insurance and PMC Insurance Group into One80 Intermediaries (itself a part of Risk Strategies). In contrast, Markel has divested its main MGA interests by selling Velocity Risk to Oaktree Capital Management and Volante Global to Acrisure.

Nevertheless, the MGA sector seems set to remain a hotbed of innovation with global revenues attributable to it likely to pass USD 20 billion by 2023 signifying premiums intermediated by it worth more than USD 160 billion by that year.

About alastair walker 8976 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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