What's Happening?
The managing general agent (MGA) sector is experiencing significant growth, with MGAs writing $109.2 billion in direct premiums globally in 2024, according to a report by Aon. This represents a 242% increase over the past four years. As MGAs become more
prominent in the global risk transfer chain, their ability to handle claims effectively is crucial for maintaining trust and credibility. The report highlights the importance of in-house claims expertise, which ensures consistency, accountability, and strengthens relationships across the insurance value chain. MGAs are increasingly recognized for their role in managing complex claims in areas such as marine and cyber insurance, where local jurisdiction knowledge and quick response are valued.
Why It's Important?
The growth of MGAs signifies a shift in the insurance industry, where these entities are no longer niche intermediaries but key players in risk management. Effective claims handling is essential for MGAs to be seen as trusted partners rather than mere distribution channels. The ability to manage claims in-house allows MGAs to provide better service, faster resolution, and valuable feedback to underwriters, enhancing risk selection and pricing strategies. This development is crucial for maintaining the sector's reputation and ensuring its continued growth and integration into the broader insurance market.
What's Next?
As MGAs continue to expand their role in the insurance industry, investments in in-house claims teams and technology are expected to increase. This will likely lead to improved claims processes and stronger partnerships with carriers and brokers. The sector's trajectory will depend on its ability to demonstrate that MGAs are both distributors and custodians of capacity, with claims management at the core of their operations. The focus will be on enhancing claims functions to cement MGAs' role as indispensable partners in the insurance value chain.
Beyond the Headlines
The emphasis on in-house claims functions highlights the evolving nature of the MGA sector, where technology and cultural expertise play a critical role. The ability to communicate effectively in local languages and understand cultural expectations around claims handling is increasingly important. This development underscores the need for MGAs to balance technological advancements with human expertise to build trust and ensure effective claims management.
