Rapid growth of MGAs continues to lead the sector – AM Best – Global Reinsurance
AM Best, the rating agency, recently announced its positive outlook for the managing general agents’ (MGA) business. Specifically, they are optimistic about the growth and niche expertise of the delegated underwriting authority enterprise (DUAE) segment.
Despite potential challenges like capacity issues and rapid growth, AM Best believes that the DUAE segment will continue to benefit from the growth in the excess and surplus (E&S) market. This growth is driven by increased premiums in surplus line businesses due to elevated catastrophe activities and regulatory changes.
The DUAE distribution channel is expanding its market share globally, supported by strong premium growth. AM Best uses DUAE as an umbrella term for various entities like MGAs, managing general underwriters, Lloyd’s coverholders, and others.
AM Best’s positive outlook for the DUAE segment aligns with their positive market segment outlook for the global reinsurance segment. The reinsurance industry is significantly involved in the MGA business and provides capacity for risk transfer. Despite challenges like an active Atlantic hurricane season, AM Best anticipates solid full-year results for 2024 in the reinsurance sector.
In conclusion, AM Best’s positive view on the DUAE and global reinsurance segments reflects the ongoing growth and opportunities present in the market, despite potential challenges.
