MGAs – An Area of Continued Growth

Michael Forman, Co-Head of North America Capital Markets & Advisory, spoke with Meg Green at the Insurance Insider’s inaugural Program Partners Business Club.

Meg asked Michael about the strong growth in the MGA space. “This trend is here to stay” he said. “It’s certainly not cyclical. We see MGAs as a huge part of the insurance industry going forward, as they are today.

“Specialisation is key…” said Michael. “The capital light model where carriers can outsource specialised services to these MGAs has become more and more valuable. We’re seeing teams leave larger companies to join more entrepreneurial environments, valuations continue to hold, so it’s an area where we see continued growth.

Asked about M&A in the space, Michael pointed out that despite conventional wisdom suggesting that challenges including high Interest rates and challenging reinsurance conditions, there’s no slowdown in valuations. “For high quality assets, valuations have held” he said. “It’s really a supply demand equation. There’s a lot of capital, a lot of buyers chasing very few assets”