he managing general agency model is attracting a number of ambitious underwriters keen to step away from established insu
rers to build nimble, specialized, and client-focused MGAs. For many, launching an MGA is a chance to offer a more tailored approach to fill
product and distribution gaps not prioritized by traditional insurers.
However, success in this sector involves more than just a solid business plan an
d securing capacity; it requires a robust culture, operational resilience, and agility.
What Makes a Successful MGA?
Thriving as an MGA demands three core elements: a keen eye for client success, a culture of innovation, and a focus on scalability. To
gether, these lay the groundwork for sustainable growth in a rapidly evolving market. So, what does it take to build an MGA that stands the test of time?
1. Client Centric Model
Client success is the epicenter of an MGA’s focus. With new niches becoming apparent every day, MGAs must be proactive in their own
niches and be mindful of their client’s insurance needs, sometimes, even
before the client is aware of any issues. By investing in data analytics and real-time monitoring tools, MGAs can st
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rengthen trust with both capacity providers and clients. By establishing themselves as
market leaders in their niches early on, MGAs can quickly build their reputations and client loyalty, which are essential in today’s market.
Crux Risk Services exemplifies this approach. Approved as a Lloyd’s coverholder in 2024, Crux specializes in delegated authority un
derwriting in the terrorism class. Crux’s modern cloud-base
d straight-through-processing system has the ability to deliver best-in-class user experience and efficiency to both its brokers and market
s, cutting the time taken to bind business from days to minutes.
(Editor’s Note: The specific MGAs referenced in this article are clients of DA Strategy).
2. Cultivate an Innovation-Driven Culture
An MGA’s success often hinges on its ability to innovate and respond quickly to market shifts. Unlike traditional insurers, MGAs have the flexibility to explore new ideas and adapt quickly to market trends within their expertise with pinpoint accuracy. Fostering a culture that encourages creativity and agility, requires bringing in people with fresh perspectives and a willingness to challenge norms.
This includes continually developing new products designed to address emerging risks, and incorporating regulatory shifts and technological advancements – empowering teams to take calculated risks, within a strong underwriting framework, they are developing a dynamic approach that is responsive to both opportunities and challenges.
3. Design for Scalability
Most MGAs start with a wireframe model, with scalability integral to their strategy. Investing in the right team, digital tools, and partners enhances operational efficiency and service quality, which are key drivers of growth. Partnering with capacity providers, delegated authority specialists and investors, which align with the MGA’s vision, provides the structure, support and stability needed to navigate market fluctuations. With a scalable model, MGAs can expand without compromising on the service their customers have become accustomed to.
Successful MGAs often launch with their second and subsequent growth phases “in sight.” For example, Crux grew its capacity from an initial $100 million to $400 million within just six months. Rapid growth is achievable when scalability is embedded in the business model from the outset. Proactive compliance measures and plans for expansion into new territories or classes of business are key parts of this, where experienced MGA incubators play a crucial role in delivering speed of execution.
HIVE Underwriters is another example of an MGA successfully building scalability into its foundations. Since its inception in 2017, HIVE has strategically expanded its portfolio from its original focus on airline hull war to include airline hull and liabilities, excess aviation war liabilities and general aviation hull and liabilities.
