July 13, 2017 by Canadian Underwriter
Growth in the managing general agent (MGA) market last year exceeded that of the total property and casualty market by 32%, according to a new study from global investment management firm Conning.
“In 2016, comparable firms in Conning’s MGA database grew by 4.9 per cent compared to 3.7 per cent for the property-casualty market overall,” Matt Sternat, vice president of insurance research at Conning, said in a press release on Thursday. “However, that growth is down significantly from prior year, as the ongoing soft market has affected the property-casualty industry, especially commercial lines. The new entrants to the market are exacerbating the issue, as they are aggressively pricing business and competing for attractive programs.”
The Conning study, titled Property-Casualty Managing General Agents: Growth Continues, but No Escape from the Soft Market, presents marketplace dynamics, trends, players and outlook in the MGA space. Conning’s proprietary MGA database includes information on almost 650 current and unique MGAs and more than 200 insurers that actively use the MGA channel.
Steve Webersen, Conning’s head of insurance research, noted in the release that in the past year, there have been “insurer exits from the market and reduced risk appetites, primarily due to the poor performance in certain lines, led by commercial auto. However, we have also seen the emergence of significant new insurer-MGA partnerships, new programs, and continued strong MGA mergers and acquisitions activity. Looking forward, there is no easing to either the soft pricing market or overcapacity, so seasoned MGAs and program market insurers that have managed through cycles in the past will be best positioned for success.”
Conning is a global investment management firm with almost US$113 billion in global assets under management as of March 31, 2017. The company supports institutional investors, including pension plans, with investment solutions and asset management offerings, risk modelling software and industry research. Founded in 1912, Conning has offices in Boston, Cologne, Hartford, Hong Kong, London, New York, and Tokyo.