A roofing contractor in Florida buys a general liability policy. Between him and the capital that stands behind the policy sits a supply chain: a retail agent, a wholesale broker, an underwriter, a licensed carrier, a reinsurance panel and, increasingly, a pension fund or a credit manager who has never heard of the contractor.
The chain runs from the customer at one end to capital at the other, and its only job is to connect the two as efficiently as possible.
For about a hundred years, most of the ecosystem lived under one roof. A carrier underwrote the risk, issued the paper, paid the claims, held the data and put its own surplus behind the promise. Historically, the cheapest way to coordinate expensive, difficult work was to put all of it inside one company.
In 1999, insurance consultants notably predicted that would end: underwriting, distribution, administration and capital would separate, creating virtual insurance c
ompanies. They were not wrong; they were just early. The insurance value chain has been fragmenting for years, and AI is already accelerating the breakdown.
Carriers Embrace MGAs
A carrier is a bundle of underwriting, licensed paper, claims, data and capital. The components are slowly unbundling with the underwriters first. Conning’s 13th annual MGA study describes a “migration of underwriting expertise” from carriers to MGAs. MGAs wrote roughly $128 billion of U.S. pre
mium in 2025, up 12% in a year where the market only grew 5%. MGAs’ share of U.S. premium grew from 3.6% in 2012 to about 11.6% in 2025.
Watch More Image Part 2 >>>
Carriers are embracing MGAs, and momentum shows no signs of slowing. In Conning’s survey, 61% of insurers said they are expanding their use of MGAs and none said they plan to cut back. That growth is also fueling demand for fronti
ng carriers, which provide the licensed insurance capacity that connects underwriters with capital. Today, 78% of MGAs use a front to access capital.
Read more: MGAs: An All-Weather Distribution Channel for Soft and Hard Markets
The model is longstanding, but its scale is changing rapidly. Fronts grew almost 400% in five years from $6 billion in premium in 2020 to over $22 billion in 2025, according to Conning. (Editor’s note: Some of report’s findings, including the section of the growth of fronts, sit behind Conning’s paywall).
Large carriers like Chubb and Berkley will continue to manage everything under one roof, but the marginal dollar is being deployed through the new, intermediated model. While still a rounding error relative to the global insurance market, fronting is becoming commonplace.
What’s Left Is a Balance Sheet
When underwriting and paper is pulled out of a carrier, what remains is a balance sheet and investment portfolio. The carrier begins to look more like an investment manager than an insurance company.
In June, Howard Hughes Holdings, Bill Ackman’s new venture, closed its $2.1 billion acquisition of Vantage and handed the insurer’s investment portfolio to Pershing Square. In September, The Fidelis Partnership, described itself as the world’s largest independent MGA, reported $5.39 billion in prem
ium for 2025 while retaining almost none of the underlying risk on its own balance sheet. One is a capital manager that rents underwriting. The other is an underwriter that rents capital.
