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, marking a 242% increase over four years. This expansion
has brought increased scrutiny, emphasizing the importance of effective claims handling. A report from Aon highlights that MGAs are now a substantial part of the global risk transfer chain, and their ability to manage claims effectively is crucial for maintaining trust and credibility. In-house claims expertise is becoming a key differentiator, ensuring consistency, accountability, and strengthening relationships across the insurance value chain. MGAs are increasingly recognizing the value of having dedicated claims teams to manage complex claims, particularly in specialty lines such as financial and marine sectors.
Why It's Important?
The growth of the MGA sector signifies a shift in the insurance industry, where MGAs are no longer niche players but major contributors to global 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 efficiently impacts the reputation of MGAs and their relationships with carriers, brokers, and clients. As MGAs continue to expand, their role in the insurance market becomes more critical, with claims management serving as a foundation for credibility and trust. This development has implications for the insurance industry, as it highlights the need for MGAs to invest in in-house claims functions to maintain their position as reliable stewards of capacity.
What's Next?
MGAs are expected to continue investing in in-house claims teams, supported by technology and cultural expertise, to enhance their claims handling capabilities. This investment will likely lead to improved claims processes and stronger partnerships with carriers and brokers. As the MGA sector grows, the focus on claims management will become increasingly important, with MGAs striving to demonstrate their role as custodians of capacity. The trajectory of the sector will be defined by these investments, ensuring that MGAs remain indispensable partners in the insurance industry.
Beyond the Headlines
The emphasis on in-house claims functions reflects a broader trend in the insurance industry towards greater accountability and transparency. MGAs are recognizing the importance of claims management not only for operational efficiency but also for building trust with stakeholders. This shift may lead to long-term changes in how MGAs operate, with a focus on integrating claims management into their core business model. The development also highlights the evolving role of technology in claims handling, as MGAs leverage tools for trend analysis and communication to enhance their capabilities.
