The combined effect of Lloyd’s remediation work, Covid-19 and a contraction in capacity in the European MGA space has accelerated an already hardening marketplace for MGA capacity in the region, leading to a flight to underwriting quality.


The theme permeated the latest virtual panel debate hosted by Program Manager, with Dual Group’s global CEO Richard Clapham highlighting that disciplined underwriting was at “the core” of a successful MGA. 

“We need to ensure at all times that our underwriting discipline is maintained, and that we make that key profit,” Clapham said.

“Then I think we can demonstrate the real value to both insurers and reinsurers and therefore I think the market is very much there for us,” he added. 

Richard Clapham, Global CEO, Dual Group

With capacity providers being more selective in 2020 – a trend expected to continue into 2021 – Martyn Glover, a partner at Gallagher Re, said that for MGAs to be successful and continue to thrive “they’ve got to remember their core underwriting discipline”. 

The panel identified the need for MGAs to add value rather than building on existing carrier capabilities, with such traits highly regarded. Konrad Babl, EMEA market unit head at MS Amlin AG, outlined that MGAs also need a strong track record and the ability to add value in niche markets.

“As a reinsurer, what we would like to see is that the MGA has the capability of underwriting, they differentiate from their peers, they provide certain value-add,” Babl said.

Konrad Babl, Market Unit Head EMEA, MS Amlin AG

Babl added that from a risk carrier perspective, it was also beneficial if a MGA was willing to have some “skin in the game”.

“Ideally we would like to see the risk carrier to have some flesh or some participation let’s say in the risk, not to act purely as a fronter but really to have some skin in the game,” Babl continued.

This panel debate is brought to you by Program Manager – the free-to-read monthly ezine from The Insurer. Each month we deliver in-depth coverage of the sector from our team of experienced journalists on the ground in North America and Europe.

This virtual debate – focused on the European MGA and program management sector – follows our recent US panel, where panelists discussed the US program market and drivers of growth, the E&S effect and impact of Covid-19, hybrid program fronting carriers and new tech opportunities. 

Click the link below to watch the debate in full…

Accredited Insurance Europe’s chief executive Colin Johnson said that to be successful in the MGA European space, there needs to be a partnership between the MGA, the fronting carrier or the risk carrier, and the reinsurer.  

“We believe in that model where we share the journey, we want long-term partnerships,” Johnson said.

Colin Johnson, CEO, Accredited Insurance (Europe) Limited

He reiterated that disciplined underwriting and being a specialist in a chosen line of business were also central to this.

“We’re looking for the best-in-class MGAs in their own environments and their own fields. MGAs with great systems, underwriting experience and knowledge of their particular classes,” Johnson added.

As quality capacity contracts in the MGA market, Mark Bacon, chief product officer at Kingfisher Holdings, stressed that it was imperative for an MGA to “stick to the basics”, which in addition to underwriting discipline includes claims management, financial discipline, governance and financial stability.

“For me, it’s always been about us demonstrating that we do the basics of our industry well and continue to do it,” Bacon said.

Mark Bacon, Chief Product Officer, Kingfisher Holdings Limited

“If we can deliver those things, then there will always be capacity providers that support us. It’s when we stop doing the basics well that MGAs have a questionable future.

Building upon Bacon’s point, Mike Palmer, CEO of Palm Re, said that for MGAs to weather the storm and to continue to be “popular and well-used” it was important to focus on tech, talent and alignment space, as well as quality underwriting.

“[MGA] have got to continue to really grasp the talent and combine that with the underwriting discipline, they need to keep that alignment,” he concluded.

Opportunities in the European MGA market

Despite the challenges the market faces outlined above, Europe remains a fertile ground for MGAs to grow and develop business.

A recent survey by Clyde and Co highlighted that in 2019, London was the preferred market for growing and developing MGA businesses, followed by Lloyd’s. But in 2020, while the London company market continued to dominate, fewer carriers and to a lesser extent MGAs identified Lloyd’s as the preferred route for growth.

Conversely, Europe as a market for MGA business increased in popularity – from the perspective of both carriers and MGAs (see chart).

Which environment will provide the best opportunity to grow and develop MGA business in 2020?

In 2019, no MGAs participating in the study identified Europe as a market where they would chose to base and develop a business. A year on and 11 percent of participants said it would be their preferred location.

The picture was similar amongst carriers surveyed by Clyde and Co, with the European market jumping from 0 percent to 6 percent in popularity year on year.

The MGA market in 2020