At nearly 12% of commercial lines premiums, managing generalagents are an ever-growing distribution channel that bears morewatching, according to a new study and survey findings from globalmanagement investment firm Conning. Part of the proof: MGA-sourcedpremium exceeded $33 billion in 2014, an increase from the nearly$26 billion for 2012.

|

In fact, the study, “ManagingGeneral Agents: Superior Growth in Specialty Markets,” saysthat MGA growth has outpaced that of the commercial lines sector in2014, despite softening rates in several lines.

|

Several factors mitigate rate-induced weakening of premiumgrowth, including a continued shift by insurers towardspecialization and their demand for alternative distributionsources to access the customer, says Bill Broomall, assistant vicepresident, Insurance Research.

|

Conning says that this continued growth is sustainable, asspecialty markets are attractive revenue opportunities forinsurers. However, they will assume certain risks as part of theirrelationships with MGAs—most notably, granting underwritingauthority (“giving away the pen”). Premiums sourced through MGAsalso come with certain expenses, such as commissions or profitshare.

|

Conning's database reports that 70% of MGAs underwritecommercial risks. General Liability, Commercial Multiperil, Marine(Inland and Ocean), and Commercial Auto are frequently offeredcoverages.

|

Both the number of MGAs and the number of relationships thatthey enjoy with insurers increased in 2013 and 2014. Conningattributes this increase to the non-affiliated (MGAs not ownedprimarily by an insurer) market.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.