2020: Managing General Agents - Managing Through the Storm



Price : $1,750.00



The Conning study, “Managing General Agents: Managing Through the Storm” presents MGA marketplace dynamics, trends, players and outlook. It includes analysis of the growing fronting market, and findings from Conning’s 2020 proprietary survey of MGA executives. The survey uncovered valuable insights into the challenges and opportunities facing program business today. This years’ survey reached respondents during the height of the pandemic, thus capturing information on how MGAs are managing through the crisis. 

    1.     Introduction

    2.     Executive Summary

    3.     Confronting a Crisis

²     Where’s the Money?

²     Survival of the Nichiest

²     Rates

²     M&A

²     The Lloyd’s Factor

²     Who Wants My New Program?

²     Technology

²     Talent

²     Outlook for 2020

    4.     2019 MGA Market Landscape

²     Program Business Is a Sizable Market

²     Mix of Business by Affiliation Type

²     Premium Mix by Line of Business

²     Growing MGA Market Premium

²     MGA Count Growth

²     Growth to Stagnate in 2020

    5.     Program Market Insurer Trends

²     Significant Insurer Interest

²     MGA Premium Concentration

²     Insurers Using Nonaffiliated MGAs

²     Insurers Using Affiliated MGAs

²     Market Movement

    6.     MGA Premium Trends

²     Nonaffiliated MGAs

²     Affiliated MGAs

²     Crop

    7.     Conning’s 2020 MGA and Program Market Survey

²     Detailed Survey Findings

    8.     M&A in the Program Markets

²     MGAs and MGUs—Still a Hot Commodity

²     Red-Hot 2019 Acquisition Climate Slows Down in 2020

²     Private Equity Investment in MGA/MGU/PA Sector

²     Valuation Trends

²     M&A Outlook

    9.     Fronting Market Out in Front

²     MGA/PA Executive Views on Fronting

Appendices

A.    Methodology and Definition of MGA Premium Analysis

B.    Overview of the MGA Market

C.    Conning MGA Dataset

 

 

 

 


Introduction

This is Conning’s seventh annual study on the property-casualty program business market. Conning includes the following in its property-casualty program business universe: (1) MGAs (managing general agents), (2) MGUs (managing general underwriters), (3) PAs (program administrators), and (4) wholesalers. We analyze 2019 reported results for this group as well as related M&A (merger and acquisition) activity in 2020 through March.
 
The firming market of 2019 and early 2020 was a boost to the program markets. Program managers and wholesalers benefited from market conditions. Admitted insurers were able to achieve sufficient organic growth from rate increases to their standard property and liability accounts. This was a boon to top and bottom lines at MGAs, MGUs, and program administrators. The favorable environment lasted through March 2020, in the latter part of which the impact of the COVID-19 crisis began to be felt in insurance markets.
 
By the second quarter of 2020, many parts of the U.S. economy were in virtual freefall. Skyrocketing unemployment and cessation of business activity in multiple sectors served by the program market, including travel, entertainment, dining, and retail, put many programs under stress. This study explores the status of the MGA, MGU, and program administrator market in 2019 and how it is confronting new challenges brought by COVID-19. As in past Conning MGA market studies, the study is based on three research avenues:
 
  • detailed analysis of the 2019 data reported in statutory filings
  • this year’s proprietary MGA market survey, which was the most successful, measured by the quantity and completeness of the responses received
  • interviews with industry experts in the MGA world, including MGA principals and program insurers
 
Conning’s estimate of MGA annual premium volume represents the most consistent and verifiable baseline for program premium levels in this difficult-to-quantify market. However, the reader should be aware that public MGA and program data are somewhat limited by current industry reporting requirements. The NAIC (National Association of Insurance Commissioners) reporting regulations require that insurers report individual MGA premium only for those MGAs constituting 5% or more of an insurer’s surplus. Our analysis of premium should therefore be considered a floor or lower-end estimate of MGA-produced premium, because it does not include premium numbers for many smaller MGAs whose business volume does not meet the 5% premium threshold.
 
The program market serves a remarkably broad spectrum of property-casualty industry classes. It is also at the forefront of product development. Its underwriters are among the most talented and entrepreneurial in the property-casualty world. MGAs and program administrators have the nimble, creative spirit required to help the industry manage its way through the current crisis, while serving businesses with specialty risk solutions and keep the wheels of business turning.