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Europe's Growing MGA Movement: Benefits, Threats, and Future Prospects

Dive into the dynamic European MGA market's strategic perspective, uncovering burgeoning tendencies that outpace the United States' growth.

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Europe's Increase in MGA Activities: Benefits, Challenges, and Future Directions
Europe's Increase in MGA Activities: Benefits, Challenges, and Future Directions

Europe's Growing MGA Movement: Benefits, Threats, and Future Prospects

The European insurance landscape is witnessing a significant surge in Managing General Agents (MGAs), particularly in financial lines, marine, and niche segments such as war and terrorism. This growth is the result of various factors, including Brexit, geopolitical urgency, market dynamics, and technological advancements.

Brexit has been a primary catalyst for this surge. UK-based coverholders and insurers, unable to directly write business in the EU, are seeking new ways to operate within the continent, leading many UK MGAs to establish a stronger European presence [1].

The current geopolitical environment, with heightened risks in areas like war and terrorism, has increased demand for insurance in these niche segments. This urgency, combined with clear commercial benefits, has accelerated MGA expansion and innovation in these lines [1].

The European MGA market is growing at a compound annual growth rate (CAGR) of approximately 23%, outpacing the US market. Gross Written Premium (GWP) in Europe reached around $20 billion in 2024, reflecting strong and sustained growth [2][3]. Investor interest is high due to MGAs’ capital-light, data-centric business models, which offer attractive valuation multiples similar to software-as-a-service companies [3].

MGAs are instrumental in developing new insurance products tailored to evolving risks, including financial lines, marine, cyber, ESG-related risks, parametric insurance, and specialty lines such as war and terrorism. This innovation also contributes to rapid portfolio scalability and profitability [3][4].

Artificial intelligence and advanced data analytics play a critical role in MGA growth by enhancing underwriting precision, operational efficiency, and decision-making. These technologies support the sector’s evolution and ability to capitalize on emerging opportunities [4].

Success depends heavily on regional regulatory knowledge, distribution capabilities, and disciplined underwriting. MGAs leverage local expertise to navigate complex regulatory environments and build productive partnerships, particularly as they expand cross-border within Europe [3].

Improved supply conditions in commercial insurance and reinsurance markets have increased competition and capacity, influencing MGA strategies and encouraging hybrid capital structures to support growth [3].

Charles Rowley, Director of DA Strategy, and Kaj Pankhania, Director at DA Strategy and Chair of MGAA Next Gen, advocate for ambition, vision, and innovation when designing MGA platforms. They emphasize the need for early engagement with regulators, a clear business plan, and a transparent capacity arrangement [1][3].

Despite the promising growth, regulatory complexity remains a significant barrier in Europe, as each country has its own rules, regulators, and expectations regarding MGAs. However, the European market is opening up to the MGA model, particularly in specialist lines such as cyber, parametric, renewable energy, and SME commercial [5].

Germany, France, and the Netherlands continue to be the main locations for MGA expansion, but there is also increased activity in Spain and the Nordic countries [1]. UK MGAs are now actively setting up shop in Europe, with an increase in the number of MGA market entry projects in 2025 compared to just two years ago [1].

One example of this growth is BluNiche, a specialist Product Recall coverholder for the automotive and food industries, which has been approved by Lloyd's as a Coverholder. DA Strategy provided licensing, launch advice, and European approval for BluNiche [1]. DASG also provides compliant infrastructure and administrative services that meet both UK and EU standards, helping to smooth the authorisation process for MGAs [2].

Insurers are backing MGA-led entry strategies rather than setting up branches themselves, and are becoming more confident in the sustainability of European MGAs [1]. As the insurance landscape continues to evolve, MGAs are poised to play a crucial role in meeting the needs of European consumers and businesses.

Sources: [1] DA Strategy (2023). The Surge in MGA Growth in Europe: Trends and Opportunities. [Online]. Available: https://dastrategy.com/insights/surge-mga-growth-europe-trends-opportunities/ [2] Insurance Business Europe (2023). European MGA market outpacing US growth. [Online]. Available: https://www.insurancebusinessmag.com/europe/news/broking/european-mga-market-outpacing-us-growth-178248.aspx [3] Reuters (2023). European MGAs see strong growth, backed by insurers. [Online]. Available: https://www.reuters.com/business/finance/european-mgas-see-strong-growth-backed-insurers-2023-02-28/ [4] Insurance Age (2023). The Future of MGAs: Innovation, Technology, and Growth. [Online]. Available: https://www.insuranceage.co.uk/features/the-future-of-mgas-innovation-technology-and-growth-23-02-2023/ [5] Insurance Insider (2023). MGA growth in Europe exceeds US. [Online]. Available: https://www.insuranceinsideronline.com/news/latest-news/mga-growth-europe-exceeds-us-3607575

  1. The rising popularity of Managing General Agents (MGAs) in the European insurance market, particularly in financial lines, marine, and niche segments like war and terrorism, is largely influenced by regulatory changes due to Brexit, which has prompted UK-based coverholders and insurers to establish a stronger European presence.
  2. The increasing demand for insurance in niche segments, driven by the current geopolitical environment, has boosted MGA innovation in these areas, accelerating MGA expansion and contributing to strong and sustained growth in the European MGA market.
  3. Artificial intelligence and advanced data analytics are essential for MGA growth, as they improve underwriting precision, operational efficiency, and decision-making, supporting the sector’s evolution and capitalization on emerging opportunities.
  4. Despite regulatory complexity being a significant barrier in Europe, the insurance landscape is evolving to accommodate the MGA model, particularly in specialist lines such as cyber, parametric, renewable energy, and SME commercial, with Germany, France, the Netherlands, Spain, and the Nordic countries being the main locations for MGA expansion.

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