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MGA and program specialty business gains ground in US insurance market
Insurance Business TV highlights how specialization and shifting carrier focus are creating capacity gaps that MGAs and program businesses can target.
Insurance Business TV spoke with SageSure VP of Commercial Sales and Marketing Trey Shipp about why managing general agents, or MGAs, and program specialty business are expanding in the US insurance market. Shipp said much of the momentum is tied to specialization, as larger traditional carriers concentrate on less complex risks and exit certain parts of the market.
He added that as those national carriers prioritize areas they can manage more easily and target for margins, the gaps left behind are opening doors for MGAs. Shipp said he expects the trend to continue while carriers keep focusing on what he called the easier places to hit margins and manage portfolios.
Shipp also described how MGAs choose which niches to build capacity for, saying the decision depends on finding demand that warrants investment and on whether the niche can be delivered profitably and sustainably. He said Sage looks for a point where producers want the solution and where it can add value for carrier partners, producers, reinsurers, and the MGA itself.
On relationships with capacity providers, Shipp said the most difficult issue is ensuring alignment on the strategy for growth. He noted that all parties want growth, but clear agreement on what growth is sought, and how it will be achieved, is critical.