More than half of insurtech MGAs — 59% — employ a direct-to-consumer distribution model. (Credit: yutthana/Adobe Stock)

Insurtech MGAs are developing innovative new products and reshaping the insurance industry’s distribution models, according to a new report from ReSource Pro and InsurTech NY.

The study of 50 MGAs found that 80% are creating their own unique products, including specialty lines, liability and emerging forms of coverage, such as parametric and on-demand insurance.

More than half — 59% — employ a direct-to-consumer distribution model, with two-thirds of that group also using retail agents and brokers.

“While significant attention has been given to advancements in insurance technology, the role of MGAs within this ecosystem has remained underexplored,” said Mark Breading, senior partner, ReSource Pro, in a statement. “Our findings reveal that insurtech MGAs are accelerating their impact, leveraging advanced technology, innovative insurance models and a growing recognition of their ability to drive meaningful change in the market.”

Other findings from the report include:

  • 53% of insurtech MGAs use custom-built systems.
  • Nearly 40% of insurtech MGAs manage claims internally, with specialized teams dedicated to triaging, investigating, processing and paying out claims. Slightly fewer leverage third-party administrators, and one-fourth tap carriers’ claims departments for support.
  • Nearly three out of four MGAs required external capital to get started, typically from angel investors, venture capitalists or private equity investors.
  • Insurtech MGAs achieve roughly a one-to-one relationship between capital raised and gross written premium.
  • 30% of MGAs created programs focused on specific lines of business or segments, such as commercial property, pet, flood and others.
  • 22% of MGAs say leveraging embedded or parametric insurance concepts is their primary approach to the market.
“MGAs today use technology to enable business models that were impossible in the last decade,” said Andrew Bate, CEO of Safely, an insurtech MGA, in the report. “For example, Safely allows homeowners and property managers to protect vacation rental properties with policies as short as daily and premiums as low as five dollars embedded directly into a rental transaction.”

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