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The combination of technology, agility, and a focus on customer experience is fueling growth and redefining expectations for the insurance industry.
Managing General Agents are rewriting the rules of the insurance industry. With their entrepreneurial mindset and niche expertise, MGAs have carved out an essential role in meeting demands that traditional insurers often overlook.
Even more striking is how quickly they’re growing. MGAs are outpacing other segments of the insurance industry, thriving thanks to their agility, strategic focus, and willingness to adopt cutting-edge technology. From digital payment transformation to niche underwriting, MGAs have positioned themselves as resilient innovators in a dynamic and competitive market.
Here’s a closer look at the forces driving MGA growth and what they mean for the future of insurance.
The surge in MGA success is evident in the numbers. In 2024, MGAs and other delegated underwriting authority enterprises (DUAEs) generated $89.9 billion in premiums, a 15% increase over 2023, according to AM Best.1 In addition, it was the fourth consecutive year of double-digit growth. The number of unique MGAs that met the threshold for their premium to be reported and considered for this report exceeded 700, roughly 100 more than the previous year. However, market research indicates that the total number of MGAs operating in the U.S. market exceeds 1,000.
“The premium momentum by MGAs writing specialty commercial lines of coverage shows no sign of slowing down despite average account pricing moderating or even declining in certain lines such as workers’ compensation, professional liability — particularly directors and officers and employment practices liability — and cyber liability,” said AM Best’s David Blades, associate director of industry research and analytics, in a press release.
Several factors contribute to the meteoric rise of MGAs. according to Conning’s “Managing General Agents Ahead of the Pack 2024” report2:
Combined, these factors have given MGAs a distinct competitive edge in an evolving landscape.
One of the biggest reasons MGAs are outpacing competitors is their ability to adopt and integrate innovative technology. For MGAs, technology isn’t just an operational enhancer, it’s a strategic differentiator.
Take, for example, non-affiliated MGAs, which are increasingly choosing their own core insurance platforms. Thanks to the falling costs of technology and the rise of cloud-based systems, these MGAs now have greater control over their data and faster time-to-market for new offerings.
Further, many MGAs are essentially outsourcing claims and other cost centers to third-party administrators (TPAs). Also liberated from the limitations of legacy tech stacks and thinking, many TPAs are similarly tech savvy, data rich, and specialized. Such relationships between MGAs and TPAs allow for enhanced service quality, process efficiencies, and competitive differentiation.
Even some affiliated MGAs, those owned by a carrier, are turning to new partners and independent technology platforms in search of competitive advantage. But regardless of affiliation, many MGAs have the technological agility to create efficiencies, seize opportunities, and stand out against the competition while many other insurers are burdened by the inherent limitations of legacy systems.
Digital payment platforms are one area where technology adoption has genuinely transformed MGA success. These tools are changing the way insurers handle premiums and claims by prioritizing speed, simplicity, and convenience.
Benefits of digital payment platforms include:
North American Risk Services (NARS), a leading TPA, offers a compelling example of the impact digital payments can have. After implementing One Inc’s ClaimsPay® platform in March 2023, NARS achieved remarkable results4, including:
Additionally, NARS experienced stronger vendor participation, with 74% of vendors now having stored payment preferences. With One Inc, NARS is able to receive claims, reconcile, and address all payment types and methods, streamlining claims processes, and underscoring how targeted technology investments can drive real-world business results.
While MGAs are thriving, their rapid growth comes with its share of challenges. For example, speed-to-market, meeting stricter regulatory requirements, and keeping up with the pace of technological advancements can strain resources, especially for small and mid-sized MGAs.
When it comes to payment platforms, speed-to-market and speed-to-value are extremely important to MGAs. Look for a vendor partner with insurance and line-of-business specific experience. Pre-built integration accelerators, and even product-built accelerators may be available, slicing months off development and deployment time. And, because they’ve been previously validated, they allow insurers to quickly deliver contemporary payment experiences for customers, adjusters, agents, vendors, and everyone in the value chain.
Cloud-based deployments can also add substantial value, simplifying maintenance, updates, and upgrades. However, strategic solutions like One Inc’s payment platform, which has been designed specifically for the insurance industry, provide MGAs with the tools to succeed in these areas. Compliance benefits include:
These capabilities address common hurdles while boosting trust and credibility among insurers, vendors, and policyholders alike.
The future holds immense opportunity for MGAs willing to innovate and adapt. Trends shaping the landscape in 2025 and beyond include:
MGAs that lead the charge in adopting these technologies and targeting new opportunities will emerge as industry leaders.
MGAs are demonstrating that success in the insurance industry comes from a winning blend of expertise, adaptability, and innovation. Their rapid growth and ability to adapt to changing market conditions show that agility and technology are more than buzzwords, they’re essential to staying ahead of the competition.
The road ahead is paved with potential. MGAs are rising to the occasion, setting new standards for growth, efficiency, and customer satisfaction. The only question left is how much faster they will outpace the rest of the industry.
Strong digital payments capabilities are quickly becoming baseline requirements for insurers of all sizes and types. As the leading digital payments network for the insurance industry, we’re here to help. Get in touch.
Tags: Digital Payments, MGA
The One Inc Content Team strives to provide valuable insights about digital trends and payments innovation for the insurance community.
