Insurance Edge caught up with MGAA CEO Michael Keating recently, to learn more about how AI and tech is transforming insurance distribution.
IE: How would you sum up the MGA market right now?
MK: The MGA market is extremely buoyant at the moment, and as an association, we now have 70 insurer members and around 250 MGAs. What that growth tells us is there is a willingness to deploy capital to this sector and that, in turn, is a massive vote of confidence in Underwriting expertise and the capabilities of MGAs as a whole.
One of the interesting trends at BIBA 2025, for example, was seeing so many MGA members with their stands at the Conference. Again, it highlights the confidence in the sector, and MGAs have definitely become part of the fabric of the industry over the last few years, rather than a standalone segment – which is fantastic to see.
IE: There’s also been a flurry of venture capital-type investments in MGAs over the last few years, which shows how investors really understand this is a vital link in the insurance chain, and they want to help it grow?
MK: Yes, it is fundamentally about growth. Additionally, the traditional perception of MGAs as merely distribution channels for niche products or as markets of last resort is evolving rapidly. MGAs are now very much part of brokers’ growth strategy too, and that also has a knock-on effect when it comes to investment. People can see the partnership opportunities when it comes to investing in MGAs.
IE: Are there any headwinds this year, any areas of weaker pricing?
MK: You always have a few headwinds and maybe we are moving into a weakening rate environment now. MGAs usually do well in times of weaker rates and my take on it is that everyone in the chain, brokers, MGAs and carriers all have enough muscle memory to get things right, whatever the challenge is this year, or anytime in the future.
There’s also more emphasis now on training and webinars, which are all about helping MGAs meet any challenges that are coming down the track. That shared knowledge pool is another strength of the MGAA as an association.
IE: Recently, there has been more demand for embedded insurance products in the market, and new areas like crypto or digital assets coverage. Is that something your members are working on right now, meeting those Specialty digital product needs?
MK: One observation from the past regarding new technology and insurtech products is that there was a strong focus on the underlying technology and digital customer journey, but less emphasis on product distribution. That has now changed – there’s a growing recognition that even the most innovative solutions require robust distribution strategies to succeed
To be candid, there have been some excellent ideas in recent years that failed to gain traction in the market. It’s important that we learn from those missteps, particularly around distribution, and avoid repeating them. On a positive note, embedded insurance still holds significant untapped potential and continues to offer promising opportunities for growth
It can still take a long time for a big insurer to get a product to market and that’s why VC investment in the MGA or insurtech sector helps everyone, because speed to market is crucial and if you aren’t slowed down by legacy systems then you have a head start.
IE: Recently we have seen more online only brokers in the UK, do you think that can expand, or is there a need for the human touch in some broking niches?
MK: It’s a bit of both in some ways, and it does depend on the product. I have seen a Which? survey where around 80% of consumers said they didn’t want AI for everything, chatbots only and so on. They want human interaction as an option, for sure, but maybe the default setting?
There is a generational thing to consider too of course, maybe younger customers are happy with online only, but for me both brokers and MGAs have a competitive advantage if they are offering a human contact centre, it’s always going to be the best way of offering a more personalised service.
IE: Perhaps there are sectors like say Travel, where someone will have very detailed questions about pre-existing conditions, medicines taken, or someone in the party getting home if something happens etc? Hard to see how a chatbot can understand all those very detailed scenarios which worry people?
MK: I couldn’t agree more and I think the Regulator will have a view on this topic as well, because it ultimately comes down to understanding the actual insurance T&Cs. The broker or brand needs to prove that the customer has understood exactly what it is they are buying, so there’s work to do for sure when it comes to online sales.
Travel is a great example of a product where you can buy it very easily online, in a few seconds, at the point of sale, and then there is a high ratio of complaints after a claim. It’s easy to tick a box stating you have read the policy document, but is that the case for every customer?
IE: MGAs are a great product development team, or association, because they are also listening to feedback from the consumer market, as well as underwriters? They are seeing these issues in real time.
MK: Yes, they are very close to distribution and customer demand. There has been much more shared knowledge and development over the last few years between everyone in the insurance chain. MGAs are right at the centre of that learning process. As new capital comes in, that deeper market understanding will amplify too, so more growth, more fine-tuning when it comes to products as well.
IE: That can only be good news, Mike, thanks for your time.
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