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Size, Segmentation, Growth and Competitive Structure of the Global MGA/MGU Sector

  • In 2023, revenues earned globally by MGAs, MGUs and cover-holders surged to around USD 23.9 billion
  • Combined market share of the top five groups is less than 20% of worldwide MGA revenues
  • Over 1,650 individual enterprises in this sector are on course to write premiums of more than USD 10 million in 2024

According to an updated ranking and analysis completed by Insuramore (www.insuramore.com/rankings/mgas-mgus/revenues), the value of revenues earned worldwide by MGA, MGU and cover-holder groups (a.k.a. delegated underwriting authority / underwriting agency groups) was around USD 23.9 billion in 2023 with between 70% and 75% of this due to direct commercial P&C (non-life) insurance and the rest to direct private P&C, life and health insurance plus reinsurance.

The market value in 2023 signifies annual growth in this sector of over 20% relative to 2022 before adjusting for inflation. This is close to double the growth rate of world’s insurance broking sector which, as reported by Insuramore in a related press release on 4th June 2024, is believed to have advanced in value by over 11% in 2022. Moreover, it also indicates that, globally, over USD 200 billion in premiums across all classes are likely to have been written by MGAs in 2023.

As a consolidated group, Brown & Brown was again ranked first globally in this arena in 2023; it had worldwide MGA revenues of around twice those of the group ranked second, namely Amwins. Then, following from third to fifth in the ranking were Ryan Specialty Group, TIH – itself divested by Truist to private equity owners during the first half of 2024 – and Gallagher. Collectively, the top five groups accounted for around 17.6% of global MGA revenues in 2023 with the equivalent shares of the top 50, top 100 and top 300 groups working out at a respective 55.4%, 67.5% and 84.4% in what remains a fragmented yet highly dynamic sector. Indeed, there are around 3,000 individual enterprises involved in MGA activity worldwide among which over 1,650 are on course to write premiums of more than USD 10 million in 2024 (www.insuramore.com/globalvista).

By ownership, 58 of the top 300 groups in this space in 2023 are classifiable as broker-owned, 31 as insurer-owned and the remaining 211 as independent (albeit many of these are backed by private equity firms). Among insurer-owned groups, Insuramore judges that Munich Re generated the highest revenues from proprietary MGA business in 2023 while NSM Insurance Group was the largest independent group. Furthermore, by location of headquarters, with 163 in total and benefiting from the strength of the US dollar against most other global currencies, the US played host to the most MGA groups in the top 300 in 2023 with the UK (42), Canada (16), the Netherlands (12) and Germany (11) coming next on this count.

As would be expected given the very high industry-wide growth rate, almost all MGA groups experienced an increase in their revenues in 2023 and 12 of the top 300 are believed likely by Insuramore to have more than doubled their income relative to 2022 with both organic growth and M&A activity influential in this respect.

However, the wider sector has experienced mixed fortunes with several MGA enterprises that launched in recent years having ceased to trade during 2023 (or the first half of 2024) and with a few fields of activity having seemingly attracted more competing MGAs than they will be able to support. Arguably, in the wake of the sharp slowdown in its growth in recent months, these include cyber insurance as well as “fun” segments with comparatively low barriers to entry such as cannabis and pet insurance. Nevertheless, despite a few isolated headwinds, the increasing demand for more bespoke and innovative insurance cover supported by appropriate technologies means that the outlook for the global MGA market remains highly favourable.

Definition of MGA / MGU / cover-holder revenues

MGA (managing general agency), MGU (managing general underwriter) and cover-holder revenues are defined as fees and commissions earned from underwriting / program administration (and related activities) by entities with the authority to underwrite or bind insurance (or reinsurance) risk in any class and that do this exclusively or mainly on behalf of unaffiliated carrier partners. Such entities that are insurer-owned and that are believed to place risks exclusively or mainly with parent or sister underwriters (i.e. affiliated entities) are excluded from the analysis. Revenues from wholesale or other broking / agency activities that do not meet this definition of MGA, MGU or cover-holder business are also not in scope. However, MGA, MGU and cover-holder groups that have set up their own underwriters remain in scope unless they can be said to place risks exclusively or mainly with those underwriters.

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Cigna

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