The Strategic Shift in MGA Partnerships: What It Means for P&C Insurance

P&C insurance is witnessing a fundamental transformation in how carriers approach Managing General Agent (MGA) partnerships. This shift from volume-driven expansion to disciplined specialization carries significant implications for the entire insurance ecosystem, according to a recent article by Dawn Walker, associate director of industry relations (DUAE) at AM Best. 

Performance Accountability Replaces Legacy Relationships

The traditional reliance on longstanding relationships is giving way to performance-based partnerships. Walker highlights how major carriers like RenaissanceRe, Ascot Group, and Axis Capital are actively restructuring their MGA panels, exiting underperforming programs and reallocating capital toward specialized, profitable partnerships. This recalibration reflects broader market pressures: softening rates in some lines, mounting catastrophe losses, and the imperative to deliver sustainable returns over market share.

Transparency Becomes a Competitive Advantage

Walker emphasizes that AM Best's introduction of Performance Assessments for Delegated Underwriting Authority Enterprises (DUAEs) in 2022 signals the industry's demand for greater transparency. For MGAs, obtaining such assessments is no longer optional, it's a strategic asset that demonstrates market readiness and credibility. These independent evaluations of underwriting capabilities, governance, and financial condition provide carriers with the confidence needed to commit significant capacity.

Strategic Implications for the Industry

This evolution creates a bifurcated market. Top-tier MGAs with robust data infrastructure, proven underwriting discipline, and transparent operations will secure preferred capacity partnerships. Meanwhile, MGAs lacking these capabilities will face increasing difficulty accessing capacity or may be forced to exit the market entirely.

For carriers, this disciplined approach offers a path to sustainable profitability in volatile conditions. By concentrating on specialized MGAs with aligned interests and mutual performance metrics, they can maintain distribution flexibility while managing risk exposure more effectively.

The MGA channel remains vital to P&C insurance distribution, but success now requires demonstrable operational excellence, not just market presence.