Introduction

Managing General Agents (MGAs) play a pivotal role in the UK insurance industry. MGAs have a justified reputation for unlocking new opportunities, and are often associated with new products, concentration of specialised expertise, leveraging new technologies and seeking emerging opportunities rapidly and efficiently.

For large established insurance companies, MGAs can offer access to untapped segments to drive strategic growth. For startups, MGAs can provide an efficient scalable business operating model. MGAs can also exist as enduring, profitable entities as insurance niche specialists and sometimes grow to significant size. Success is frequently followed by focus for acquisition by companies seeking to grow their portfolios or expand into new markets.

With lighter regulatory obligations and capital requirements, MGAs maintain lower operating costs compared to traditional insurers. However, MGAs don’t have the full permissions enjoyed by an insurance company and therefore must partner with one or more insurance carriers (often just called ‘insurer’ or ‘carrier’) to underwrite business. This partnership creates an essential dynamic where MGAs must consistently satisfy carriers of their value, and be subject to ongoing oversight and regular audits by carrier partners and their investors.

The unique potential of MGAs attracts a wide audience, including those interested in partnering with, investing in or servicing these important dynamic insurance intermediaries. In this paper, we provide an introduction to MGAs and explore their place in the insurance market, examining both the opportunities they offer and challenges they face.

What is an MGA?

An MGA is generally defined as an entity that acts on behalf of an insurance company and performs a range of functions insurers typically handle. These functions predominantly include underwriting, issuing policies, managing claims, distributing and marketing.

Importantly, an MGA must partner with a carrier or carriers, as they tend not to have the regulatory authority to issue policies independently. This relationship is fundamental to the operation of the business model. Typically, the front-end, customer-facing activities sit with the MGA whilst back-office functions, such as second- and third-line risk management and regulatory compliance, are managed by the insurance carrier.

The specific scope of an MGA is defined within its contractual agreement with the insurer, allowing the MGA to make decisions and operate somewhat independently from the insurer within the bounds of the agreement. The main contract between an MGA and an insurance company is called the Binding Authority, and this document defines exactly what functions the MGA is authorised to carry out. The Binding Authority will also set out the commercial arrangements between the parties detailing how the MGA will earn commission. There are also frequently loss-sharing commercial arrangements to align interests around loss ratios, such as profit shares or sliding commission scales.

The involvement of brokers in the MGA model depends on the market and type of business written. For example, brokers are essential in the value chain for Lloyd’s business, but in personal lines many MGAs sell direct to consumers.

A Managing General Underwriter (MGU) is similar to an MGA, but the scope of responsibility is generally less. The primary focus of an MGU is underwriting, whereas an MGA’s responsibilities are frequently far broader.

Strengths of the MGA operating model?^1,2,3,4

The MGA model offers a unique combination of cost-effectiveness, operational agility and access to specialised products. These advantages make MGAs an attractive option for businesses seeking to compete and grow in the dynamic insurance landscape.

1. Cost effectiveness

• Focus on core competencies: The MGA-carrier partnership model can allow each party to concentrate on streamlining and creating efficiencies within their core competencies. MGAs handle functions such as underwriting, policy issuance and claims management, focusing on product innovation and customer relationships. They can dedicate effort to insurance niches which might otherwise be de-prioritised or avoided due to high complexity. On the other hand, insurers bring efficiency of scale and specialism to the regulatory, financial and actuarial obligations of the insurance products. Insurers can also access a lower cost of capital and reinsurance through their overall size and diversification of portfolio.
• Fewer regulatory requirements: MGA regulatory oversight is less onerous than for a full insurance company, significantly reducing setup costs and demands. For example, insurance companies have a minimum regulatory capital requirement, but MGAs do not. MGAs are also not required to maintain as many specified roles (e.g., chief actuary, chief risk officer), helping reduce overheads and complexity. Although some MGAs do choose to recruit these specialist roles at the appropriate time, an MGA can start with a lean permanent team that focuses on their core areas of differentiation, whilst outsourcing specialist functions and scaling in line with business growth.

2. Agility and innovation

• Faster time to market: Setting up an insurance carrier can take one to two years, depending on jurisdiction and regulatory requirements. MGAs can typically launch operations much more quickly, allowing them to respond rapidly to market opportunities and customer needs. As a result, MGAs can offer a cost-effective and rapid way for insurers to expand into a new geographic region or product niche without requiring significant investment in local or specialised infrastructure.
• Data and technology: The best MGAs can deliver quality data and analysis, investing in technology such as AI and machine learning to aid the insurer in understanding the health of the book and get ahead of pricing and underwriting trends. Startup MGAs can avoid legacy systems, capitalising on modern systems integration capabilities, and may seek ready-made solutions in the market that dovetail with their existing infrastructure.
• Greater control of product: Unlike brokers, who sell products designed by insurance carriers, MGAs have the flexibility to design, price and manage their own insurance products, subject to their carrier’s risk appetite and guidelines. This enables MGAs to innovate and be customer-centric, tailoring offerings to specific market segments and adapting quickly to changes in customer demand, claim events or technology. MGAs will also use this control over their product to manage loss ratios, monitor performance and implement policy wording.

3. Specialised distribution

• Access to insurance niches: An MGA partner can provide an effective distribution channel for insurers to reach customers where they lack expertise without having to build or change the insurers’ own distribution infrastructure. Given the specialised nature of MGA business, this can also provide diversification to portfolios which may be difficult to source elsewhere.
• Expertise: Partnering with an MGA can be a strategic way for insurers to innovate, grow and stay competitive in a rapidly evolving insurance landscape. MGAs offer deep expertise in niche markets and specific insurance products. MGAs are home to hard-to-access talent, surrounded by other enthusiasts for their passion—it isn’t a coincidence that ManyPets is full of animal lovers and Laka employees love to cycle. This kind of alignment of understanding between employees and target customers enables authenticity in marketing and branding, as well as tailored customer journeys and business partnerships.

Key considerations and challenges for MGAs

Following is a discussion of some key characteristics for the MGA operating model.

Carrier relationship and capacity

The continued provision of capacity is critical to the ongoing operations of the MGA. The most successful MGAs secure longer-term deals that give them stability, avoiding the typical annual cycle of trying to secure capacity. This is a particular advantage if the market hardens amidst rising prices and competition.

MGAs can also partner with multiple carriers, which can unlock greater scope for expansion whilst simultaneously de-risking the threats associated with one carrier partnership ending. For carriers, knowing that the MGA is scrutinised by another carrier may provide them comfort of further risk management, although some still prefer an exclusive partnership for greater control or segment targeting. MGAs shoulder significant expense and effort in managing and servicing a carrier relationship, which they will consider in balancing the number of carriers they choose to partner with.

To secure ongoing capacity, MGAs will need to provide high-quality data and information to carriers. Demonstrating strength in processes, including robust and transparent pricing as well as effective governance and decision-making, will help build trust. Where performance has been variable or for new and untested innovations, commercial arrangements such as profit-sharing can support alignment of interest. MGAs that can demonstrate strong loss ratios, market-leading expertise and adherence to regulatory best practice will be able to secure high-quality capacity providers.

Licensing requirements

While setup requirements for MGAs are less complex compared to traditional insurance companies, they do need to be licensed as insurance intermediaries or agents in the jurisdictions where they operate. The licensing requirements will depend on the insurance products they plan to sell and the regions where they plan to operate. A line of business specialist MGA who wishes to scale internationally may need to partner with multiple carriers to facilitate this strategy.

Economic environment and insurance cycle

The UK insurance market is highly competitive, and competition for MGA capacity is strong. New and existing MGAs will need to differentiate themselves through market expertise or specialised products.

As with traditional insurance companies, MGAs are also impacted by the economic environment. Downturns in the economy can lead to reduced demand for insurance products as customers re-prioritise their spending, and hence less revenue for the MGA. The specialism of MGAs means they can be particularly vulnerable to shocks in their area of focus (e.g., during the pandemic lockdown, travel-specialised MGAs were badly affected). Carriers may pass on challenges from the insurance cycle to their MGAs by restricting the volume of business that MGAs are allowed to write or negotiating more challenging commercial arrangements.

Branding and talent

New MGAs will need to build their brand to establish themselves and succeed in their chosen market. Building a brand in a crowded market with established players can be challenging.

Smaller businesses may struggle to gain attention from the right talent or pay the required costs of highly specialised skills. Conversely, joining a focused, innovative business with the ability to directly affect the outcome is highly attractive for some. Leaning into consultant support in these instances is a cost-effective solution for many.

Why do some MGAs become Lloyd’s coverholders?

Some MGAs become Lloyd’s coverholders,⁵ allowing them to underwrite risks and issue insurance policies on behalf of a Lloyd’s syndicate. The MGA coverholder operates under delegated authority of a Lloyd’s Managing Agent,⁶ and the scope of the coverholder’s authority, including classes of business, territories and limits, is defined in the Binding Authority agreement.

The following section discusses some considerations for MGAs considering this route.

Access to the Lloyds global network and licensing

By becoming a Lloyd’s coverholder, an MGA has the potential to write insurance business in over 200 countries, leveraging Lloyd’s extensive global network and licensing arrangements. This can lower barriers for international growth, allowing MGAs to offer products across multiple jurisdictions. Licensing scope varies by the type of business and country, so MGAs should assess how licensing aligns to their strategic aims.

Affiliation with Lloyd’s also brings a globally recognised and respected brand, along with Lloyd’s reputation for financial strength, innovation and robust oversight. This brand strength is likely to be particularly relevant to MGAs writing commercial and specialty lines. Further, Lloyd’s comprises a network of experienced underwriters, brokers and industry specialists with wide-ranging expertise, providing access to opportunities for collaboration and in forming strategic relationships.

Regulatory consistency and clarity

Coverholders are subject to rigorous oversight, and must comply with Lloyd’s standards and compliance requirements, including high standards of financial security and risk management. However, an MGA set up as a Lloyd’s coverholder would have only one central set of regulations to comply with, providing clarity and efficiency. This holds true especially for MGAs looking to write in many separate jurisdictions, where they would benefit from a centralised regulatory framework set up by Lloyd’s. This can streamline compliance, reduce administrative burdens and accelerate time to market in multiple regions.

Lloyd’s unique capital structure may also be a key consideration for potential partners. Lloyd’s Chain of Security, as well as its central oversight and governance, provides adequate protection for MGAs and their commercial partners.

Case studies

Following we highlight some examples of MGAs that have partnered with insurance companies, brokers and private equity firms.

Bridgehaven and Criterion Underwriting

In July 2024, the hybrid fronting insurer Bridgehaven Specialty UK Limited formed a new collaboration with the Australian MGA Criterion Underwriting (Criterion). The new collaboration has meant that Criterion has secured a new capacity deal which will enable them to underwrite waste management and recycling risks.⁷

Cinven and Policy Expert

In September 2024, the private equity company Cinven acquired 50% of the MGA Policy Expert, citing that their market position, business model and growth over time made it a ‘highly attractive investment opportunity.’⁸

Qlaims AND Partners&

In May 2025, broker Partners& entered into a partnership with the MGA Qlaims to enhance the claims support for the broker’s clients.⁹

MGA market statistics

MGAs exist globally, underwriting an estimated $200 billion in premiums in 2023 across all classes.¹⁰ Between 2018 to 2023, premiums written through MGAs experienced annual growth rates in excess of 20%. The USA has the largest MGA market, with the total size of this market, including business written by Lloyd’s syndicates, exceeding $102 billion in written premiums in 2023.¹¹

Markets for MGAs are also present and growing in the Netherlands ($4.62 billion), Australia ($3.8 billion) and Canada ($3 billion).¹² There are approximately 500 MGAs operating across Europe, highlighting the growing international reach of the MGA market.

Other key UK MGA market statistics:

• There are over 300 MGAs underwriting more than 10% of the £47 billion UK general insurance market premiums.¹³
• Markerstudy and Policy Expert were named the largest MGAs in the UK in 2023, with revenues between £80 million and £100 million from non-life risks in 2022.¹⁴
• In the UK, 23 specialty transactions involving MGAs were registered in 2023, representing another record high of 16% of the total 148 all-sector deals registered.
• In 2023, fronting companies accounted for more than $14 billion in MGA written premiums, representing a 27% increase from 2022.¹⁵ Of the $14 billion in written premiums, $7.5 billion was written by Lloyd’s syndicates through binder business.
• In 2023, premiums for MGAs backed by Lloyd’s syndicates grew by 1%.¹⁶
• In 2023, 58 of the top 300 MGAs were owned by brokers, 31 were owned by insurers and the rest were privately owned.¹⁷

The Managing General Agents’ Association (MGAA) is a representative trade body for all those working within the MGA community in the UK and Republic of Ireland. In the MGAA’s 2024 annual report,¹⁸ its membership has grown to 233 members, from 206 in 2023 and 187 in 2022. Collectively, the 233 MGA members underwrite more than £13.2 billion of premiums in the UK and ROI, offering more than 250 product lines.

Charlotte Halkett leads insurtech and innovation consulting services for Milliman in the UK P&C market. To learn more about MGAs, their role in the UK insurance market and Milliman’s offerings in this space, contact Charlotte.

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¹ Wallace, M. (7 April 2025). What makes a successful MGA? Insurance Business. Retrieved 23 July 2025 from https://www.insurancebusinessmag.com/uk/news/breaking-news/what-makes-a-successful-mga-531193.aspx.

² Reid, S. (26 September 2024). Briefing: The MGA market is navigating a perfect storm on its growth journey. Insurance Times. Retrieved 23 July 2025 from https://www.insurancetimes.co.uk/analysis/briefing-the-mga-market-is-navigating-a-perfect-storm-on-its-growth-journey/1453129.article.

³ How, A. (24 March 2025). Why MGAs are facing an insurance capacity crisis—and what comes next. Earnix. Retrieved 23 July 2025 from https://earnix.com/blog/why-mgas-are-facing-a-capacity-crisis-and-what-comes-next/.

⁴ Avid (9 September 2021). Avid’s Stephen Gibson on the five criteria that will define a successful MGA. Retrieved 23 July 2025 from https://www.avidinsurance.co.uk/news/the-four-criteria-that-will-define-a-successful-mga.php#:~:text=There%20are%20four%20key%20criteria%20separating%20the%20good,deep%20and%20lasting%20relationships%20with%20their%20insurer%20partners.

⁵ Lloyd’s defines a coverholder as ‘a company or partnership authorised by a Managing Agent to enter into a contract or contracts of insurance to be underwritten by the members of a syndicate managed by it in accordance with the terms of a Binding Authority.’ Lloyd’s. About Coverholders. Retrieved 22 July 2025 from https://www.lloyds.com/conducting-business/delegated-authorities/coverholders.

⁶ A Lloyd's Managing Agent is responsible for managing the underwriting business of a Lloyd's syndicate.

⁷ Cowan, J. (23 July 2024). Specialist MGA secures new capacity deal. Insurance Times. Retrieved 23 July 2025 from https://www.insurancetimes.co.uk/news/specialist-mga-secures-new-capacity-deal/1452524.article.

⁸ Ruel, C. (11 September 2024). PE firm acquires 50% stake in home and motor MGA. Insurance Times. Retrieved 23 July 2025 from https://www.insurancetimes.co.uk/news/pe-firm-acquires-50-stake-in-home-and-motor-mga/1453008.article.

⁹ McNeil, H. (12 May 2025). MGA partners with Partners& to enhance claims services. Insurance Times. Retrieved 23 July 2025 from https://www.insurancetimes.co.uk/news/mga-partners-with-partnersand-to-enhance-claims-services/1455198.article.

¹⁰ Hoftjizer, A. & Bucur, J. (1 July 2024). The evolution of the managing general agent in Europe. Retrieved 22 July 2025 from https://www.marshberry.com/eu/blog/the-evolution-of-the-managing-general-agent-mga-in-europe-2/#:~:text=Traditionally%2C%20the%20U.S.%20and%20the,Europe%20is%20varied%20and%20diverse.

¹¹ Conning (11 July 2024). U.S. MGA market grows swiftly. Retrieved 22 July 2025 from https://www.conning.com/about-us/news/ir-pr---mga-2024#:~:text=HARTFORD%2C%20CT%20%E2%80%93%20July%2011%2C,direct%20premiums%20written%20in%202023.

¹² Global Insurance Law Connect (October 2024). Innovation abounds: Opportunities for growth in the global MGA market. Retrieved 22 July 2025 from https://www.actuarialpost.co.uk/downloads/cat_1/GILC%20MGA%20report_FINAL%202024.pdf.

¹³ Managing General Agents’ Association (9 February 2024). London market today—UK MGA’s update. Retrieved 22 July 2025 from https://mgaa.co.uk/technical-library/london-market-today-uk-mgas-update/#:~:text=Managing%20General%20Agents%20(MGAs)%20are,billion%20general%20insurance%20market%20premiums.

¹⁴ Hughes, E.A. (4 October 2023). Insurance Post’s top 75 MGAs revealed. Insurance Post. Retrieved 22 July 2025 from https://www.postonline.co.uk/personal/7953982/insurance-posts-top-75-mgas-revealed.

¹⁵ Conning (11 July 2024). U.S. MGA market grows swiftly. Retrieved 22 July 2025 from https://www.conning.com/about-us/news/ir-pr---mga-2024#:~:text=HARTFORD%2C%20CT%20%E2%80%93%20July%2011%2C,direct%20premiums%20written%20in%202023.

¹⁶ Conning (2024). 2024: Managing general agents—ahead of the pack. Retrieved 22 July 2025 from https://www.conning.com/insurance-expertise/purchase-reports/article/2024%20Managing%20General%20Agents%20%20Ahead%20of%20the%20Pack/PDUM0724.

¹⁷ Gangcuango, T. (June 2024). How did MGAs perform in 2023? Insurance Business. Retrieved 22 July 2025 from https://www.insurancebusinessmag.com/uk/news/breaking-news/how-did-mgas-perform-in-2023-492895.aspx#:~:text=By%20ownership%2C%20the%20top%20300,backed%20by%20private%20equity%20firms.

¹⁸ Managing General Agents’ Association (2024). Annual report 2024. Retrieved 22 July 2025 from https://mgaa.co.uk/wp-content/uploads/2024/10/MGAA-Annual-Report-2024.pdf.