Rapid growth of MGAs continues to lead the sector – AM Best – Global Reinsurance
AM Best, a prominent rating agency, continues to hold a positive outlook on the delegated underwriting authority enterprises (DUAE) segment and the global reinsurance business. Specifically focusing on managing general agents (MGAs), AM Best is optimistic about the sustained growth and niche expertise within the DUAE segment.
Despite potential challenges related to capacity and rapid growth, AM Best is encouraged by the growth in the excess and surplus (E&S) market, which has benefited the DUAE segment. The increase in premiums in surplus line businesses due to elevated catastrophe activity and regulatory factors has also contributed to the positive outlook.
The DUAE distribution channel is expanding its market share globally, driven by significant and consistent premium growth. AM Best uses the term DUAE broadly to encompass various entities like MGAs, managing general underwriters, Lloyd’s coverholders, program administrators, and more.
AM Best’s outlook is a forward-looking, independent assessment of a DUAE’s ability to perform on behalf of its insurance partners. In addition to the positive view on the DUAE segment, AM Best also maintains a favorable market outlook for the global reinsurance sector, which plays a vital role in supporting the MGA business and providing risk transfer capacity.
The positive reinsurance outlook is based on strong underwriting returns and the potential for solid results in 2024 despite an active Atlantic hurricane season. Overall, AM Best’s assessment underscores the resilience and growth potential of the DUAE segment and the global reinsurance market.
