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MGAs package multiple specialist programs into larger capacity blocks
Gallagher Re’s Geoffrey Lubert said the shift is being driven by softer market conditions and growing difficulty securing capacity as the market contracts.
MGAs are increasingly bundling multiple specialist insurance programs into larger blocks of annual capacity, a move that is changing how brokers structure placements, according to Insurance Business.
Geoffrey Lubert, global head of Program Solutions at Gallagher Re, said the industry is moving toward what he called “programs of programs,” where larger distributors group multiple niche books and negotiate broader relationships with capacity providers rather than placing each program separately.
Lubert added that as capacity becomes harder to obtain and the market contracts, risk is being unbundled, with stakeholders seeking to insure pockets of exposure individually.
Insurance Business also notes that bundling can deliver scale efficiencies as insurers and reinsurers face greater competitive pressure on pricing and terms.