Building MGAs for the long term
By Emma Plush, Director, MGA & Broker Solutions
Managing General Agents (MGAs) have become one of the most dynamic forces in the insurance market. Once regarded primarily as a US-centric model, MGAs are now thriving across Europe, the Middle East, Asia, and offshore centres such as Bermuda and Guernsey. They appeal both to entrepreneurial underwriters who want to back their own judgement, and to investors who see MGAs as agile, innovative businesses capable of delivering strong returns.
The attraction is clear. MGAs combine the flexibility of a start-up with the credibility of underwriting expertise, allowing them to respond quickly to emerging risks and underserved customer groups. Yet for every MGA that scales successfully, there are others that falter. The challenge is not in starting an MGA, but in building one that lasts.
Underwriting skill is essential, but it is only one part of the equation. Long-term success requires foresight, discipline, strong governance, scalable infrastructure, and — above all — the right partners.
Identifying where you add value
The MGA model is at its strongest when it delivers something the market genuinely needs. The most successful ventures are not those chasing growth for growth’s sake, but those built around a clear purpose. That purpose may be to provide capacity in territories where insurance penetration remains low, to develop products for customers overlooked by traditional carriers, or to use innovative data and pricing techniques to bring cover to more complex or higher-risk segments.
This clarity of purpose matters for more than just customer acquisition. Carriers and investors are looking for MGAs that can complement their own strategies, not duplicate them. A well-defined proposition creates opportunities for all sides: founders establish a distinctive and sustainable niche, carriers gain access to business they might not otherwise write, and investors are reassured that growth is based on more than a passing trend.
By contrast, MGAs that cannot clearly explain how they add value often find themselves struggling to secure sustainable capacity or attract the investment needed to scale.
Seeing the journey ahead
Launching an MGA is often more complex than founders expect. While the initial idea may be simple, execution involves navigating a series of interdependent steps — securing regulatory permissions, arranging capital, negotiating capacity agreements, building infrastructure, and putting governance structures in place. Each step must be completed in order, and progress in one area is frequently dependent on the successful completion of another.
Some MGA launches can be achieved in as little as six months, but others — particularly those spanning multiple jurisdictions or requiring innovative product approvals — may take 12 to 18 months or more. The key is realistic planning and recognising that speed should never come at the expense of compliance.
Perhaps the most common mistake is to underestimate the difficulty of correcting errors later. Weaknesses in governance, data management, or compliance may not be visible in the first year, but they can quickly become critical as the business grows. Once embedded, these problems are difficult — sometimes impossible — to resolve without damaging momentum and credibility. Getting it right the first time is far more cost-effective than trying to unpick mistakes later.
Designing for scale
Many MGAs encounter challenges when early success outpaces their initial operating model. Systems that work well for a single-line start-up can quickly become inadequate when new products, geographies, or regulatory environments are added.
Founders who succeed are those who think beyond the immediate launch phase and design their business to grow. That means investing early in systems, compliance frameworks, and data infrastructure that can support increasing complexity.
Scaling is not just about expanding product offerings. Internationalisation is becoming a defining feature of the MGA market. We are seeing increasing demand for support in expanding across Europe, the Middle East, Asia, and Bermuda. Each new market represents an opportunity, but also a challenge. Local licensing rules, capital requirements, and cultural differences in how insurance is bought and sold must all be navigated. Businesses that prepare early for these demands are far better placed to sustain growth.
Partnering for growth
No MGA can succeed in isolation. From claims handling and compliance to actuarial support and analytics, external partnerships are essential. But the quality of those partnerships can make or break the business.
The strongest partners bring more than just operational support. They provide insight, perspective, and strategic flexibility. They understand that an MGA’s needs will change over time, and they are ready to flex with those changes.
For MGAs that aspire to become risk-bearing entities, the right partnership becomes even more critical. Options such as captive solutions or Lloyd’s entry points like the Syndicate in a box model offer exciting opportunities, but also add layers of complexity. Access to platforms that can provide governance, regulatory expertise, and capital solutions enables MGAs to take these steps securely, without undermining their core operations.
A trusted partner also plays a vital role in reducing execution risk. The lessons learned from previous MGA launches can be invaluable in anticipating challenges and helping founders avoid the pitfalls that others have encountered.
Defining what success looks like
There is no single definition of success in the MGA world. For some, it is about building a profitable, specialist business that is eventually acquired. For others, it is about retaining independence while diversifying into multiple product lines and geographies. As mentioned previously, we also see MGAs taking advantage of opportunities to expand into Lloyd’s, using structures such as the Syndicate in a box to broaden their market access and enhance their brand.
The important point is to decide early what success looks like and align every strategic decision with that vision. An MGA that is aiming for global expansion requires very different infrastructure and capital arrangements than one looking for a strategic exit within five years. Clarity of purpose, communicated effectively to partners and investors, is critical.
Preparing for global reach
International expansion is one of the strongest trends shaping the MGA sector today. Clients, carriers, and investors are all looking for businesses that can operate across borders. But going global is not without risk.
Every new market brings its own set of challenges. Licensing regimes vary widely. Capital requirements can differ dramatically. Regulatory cultures are not uniform, and neither are customer expectations. In some markets, personal relationships are vital; in others, digital distribution dominates. Successful MGAs are those that build the resilience and flexibility to adapt, while maintaining the consistency and oversight needed to reassure carriers and investors.
Internationalisation is not just about opportunity; it is also about responsibility. Founders must ensure they have the infrastructure, governance, and support to meet the obligations of every jurisdiction they enter. Without that, global growth can quickly stall or even threaten the sustainability of the core business.
Harnessing technology and innovation
Technology has become a central feature of the MGA proposition. From advanced analytics and telematics to digital distribution and automated claims, technology is enabling MGAs to operate more efficiently and target segments that traditional insurers struggle to serve.
For new entrants, this represents a major opportunity. Technology allows MGAs to make sharper underwriting decisions, respond faster to changes in risk profiles, and offer products that are better aligned to customer needs. It can also deliver significant operational efficiencies, keeping costs manageable while the business grows.
But technology is not a silver bullet. Its value depends on how well it is integrated into governance and day-to-day operations. Regulators, carriers, and investors all expect robust controls to be in place, ensuring that innovation does not come at the expense of compliance. The most successful MGAs are those that treat technology not as an add-on, but as an integral part of a disciplined, well-structured business model.
Final thoughts
MGAs have established themselves as one of the most flexible and innovative models in insurance. They combine entrepreneurial energy with specialist expertise, creating opportunities for founders, investors, and carriers alike. But turning that opportunity into sustainable success requires more than vision.
The MGAs that endure will be those that invest early in governance, build for scale, and surround themselves with partners who can flex with their evolving needs. They will be the ones who define success clearly, prepare properly for international expansion, and harness technology in a disciplined way.
In a market where the rewards are high but the risks are real, the difference between an MGA that fades and one that flourishes is rarely the idea itself. It is the ability to execute that idea with structure, resilience, and foresight — creating businesses built not just to launch, but to last.
If you would like to continue the conversation, get in touch with Director, MGA & Broker Services, Emma Plush at emma.plush@davies-group.com
