Conning: Premium volume in US MGA market grows 16% in 2024 to $114.1 billion
(The Insurer) - Direct premiums written (DPW) in the U.S. MGA market increased 16% in 2024 to $114.1 billion, with fronting carriers playing an increasingly prominent role in the sector and Lloyd's also showing strong growth, Conning’s latest report on the fast-growing industry segment has found.
The study, the 12th that Conning has conducted on the specialist market, found that in 2024 MGAs sustained their strong recent growth momentum with the sector once again outpacing the broader P&C industry.
As Conning highlighted, the 16% top line growth generated by the U.S. MGA market in 2024 was ahead of the 10% in the broader P&C space.
Through its analysis of insurer statutory filings, Conning identified $91.8 billion of P&C DPW in 2024 that was produced by MGAs.
There was 15.4% growth in MGA premium from 2023 to 2024, based on an “apples-to-apples” comparison of the same insurers and MGAs in each year. That growth rate was slightly higher than the 14.3% expansion seen in 2023.
That $91.8 billion of DPW includes only the premium that is required to be reported in statutory filings.
However, as Conning noted, this does not provide a full picture of the total premium flowing through the MGA channel.
That is because premium volume must be reported by insurers for those MGAs responsible for producing 5% or more of the carrier’s surplus, and there are many smaller delegated underwriting authority enterprises that produce less than that threshold for their capacity partners.
“We estimate that the premium identified through required statutory reporting represents approximately 85% of total MGA premium,” said Conning.
“The total MGA market is therefore estimated to be in the region of $114 billion, including $8.5 billion of premium sourced by U.S. MGAs for Lloyd’s,” it added.
NON-AFFFILIATED MGAS NOW DOMINATE
Conning’s study showed that there has been in a shift in the makeup of the U.S. MGA market.
While affiliated MGAs, or those owned by insurance companies, have historically represented the greatest share of market premium, that is now no longer the case.
Over the past three years, non-affiliated MGAs have become more dominant, supported by strong relationships with fronting carriers.
Conning’s report found that in 2024, non-affiliated MGAs accounted for 46.6% of reported premium, compared with 45.3% for affiliated MGAs.
Crop MGAs represented the remaining 8.1%.
Through its analysis, Conning identified over 850 MGAs, while it estimates there are approximately 250 smaller delegated underwriting authority enterprises whose business production does not meet the 5% insurer surplus threshold.
FRONTING CARRIERS OUTPACE LLOYD’S
When it comes to who is supporting the MGA space, Conning noted that business written for Lloyd’s syndicates by coverholders increased by 14% year on year to $8.5 billion.
Premiums written by fronting companies in the MGA space had significantly stronger growth, Conning found.
As per its study, Conning’s estimate of fronting premiums was more than $18 billion in 2024, growth of 26% when compared with 2023.
Four of those fronting companies – Accelerant, Sutton, MS Transverse and State National – booked significant growth in 2024, said Conning, with the first three expanding their DPW by over 80%.
“While State National’s percentage growth was lower, its premium increase of more than $700 million earns it a place among the top performers,” said Conning.
“Notably, all four companies wrote more than $1 billion in premium while still achieving outsized growth, collectively accounting for 43% of the fronting market,” the report added.
The report, called Managing General Agents; Built for What’s Next, can be accessed by clicking this link.
