Empowering the Future of European MGAs – A Data-Driven Paradigm Shift in Insurance Distribution

In the dynamic landscape of the European insurance market, Managing General Agents (MGAs) are emerging as pivotal players, reshaping the distribution of Property and Casualty (P&C) insurance. The MGA market in Europe is following the path of maturity seen in other markets such as the US and UK markets, with significant growth rates in the recent years and a very positive outlook for the ones to come​. 

More and more MGAs are driving innovation by embedding insurance products into customer journeys, but also extending their reach to the product definition, by hiring their own underwriters, and pricing experts, and taking over claims handling.  

Our recent white paper A blueprint for embedded insurance via European MGAs sheds light on how MGAs looking to distribute insurance products in the EU can leverage the capabilities of an insurer to access additional capacity, which will allow them to model, manage and deliver personalized customer solutions. 

A Growing Market in Need of Tech-Enabled and Reliable Strategic Allies for MGAs

Pioneering advancements in customer experience, particularly in small business and personal lines markets, have propelled the rise of MGAs and modern primary insurers. The European MGA market is on the lookout for reliable partners who can provide speed, flexibility, and a close client relationship. This article explores the driving forces behind MGA growth and the increasing need for data-driven capacity providers. 

What’s driving MGA growth? 

There are four current market trends that are driving MGA growth and the need for tech-savvy capacity providers like ELEMENT to support them: 

• Tech & innovation: Nowadays, more tech-first fronting carriers are showing up in the market with enhanced tech and data models to better underwrite and select risks at lower costs. Also, maturing insurtechs are seeking out new carriers to help them grow ​​that can match their established capabilities.​  

• Lack of capacity: In the current high-inflation and interest rates macroeconomic scenario, traditional insurance players are turning their backs on providing capacity to MGAs, as they’ve had bad experiences and are struggling to trust MGAs with handling parts of the value chain other than distribution.​ Profitability and transparency ​​onto the portfolio are key to succeed.​  

• M&A activity: Consolidation in the broker market is creating space for new players to gain prominence in the industry. Also, private equity tends to prefer lean capital models (= MGA) over traditional carrier models.​ 

• Diversification of product offerings. To meet evolving customer needs, MGAs have diversified their product offerings. This includes developing innovative insurance products and exploring new lines of business to stay relevant in the market. Extreme demand and focus on traditional products, such as motor insurance, is leaving the door open for the eager innovators​. 

ELEMENT role as a data-driven carrier  

ELEMENT stands out as a reliable partner for MGAs, addressing their needs and facilitating seamless insurance offerings for customers across Europe. As a primary insurer, ELEMENT serves as a dynamic risk transfer platform, enabling the exchange and management of risks among insurers, reinsurers, and MGAs. The pan-European license allows partners to utilize ELEMENT as their primary insurer in all 27 EU markets via Freedom of Service, overcoming language and regulatory hurdles. 

By forming partnerships with data-led enablers like ELEMENT, MGAs can focus on technology and sales, embedding insurance products while accessing substantial capacity and optimizing portfolios with data-driven insights. The expert management team at ELEMENT ensures steady and sustainable growth, coupled with compliance and licensing, making them a trustworthy strategic ally. The white-label products and a smooth onboarding process further position ELEMENT as a preferred partner, dedicated to the success of its MGA partners. 

Conclusion

In conclusion, the evolving European MGA market is witnessing a surge in demand for tech-enabled and reliable strategic allies. ELEMENT, with its innovative approach, expertise, and seamless solutions, emerges as a key player in supporting MGAs to navigate the complexities of the insurance landscape, driving growth, and ensuring a customer-centric approach. As MGAs continue to reshape the insurance distribution landscape, strategic partnerships with forward-thinking entities like ELEMENT will play a pivotal role in shaping the future of the industry.