Editor Yannick Guerry cherry picks some of the central insurance themes arising this month, particularly around capacity within the MGA market
One of the main themes to emerge from the Insurance Times MGA survey, released last month, is brokers’ concerns about constricting MGA capacity.
A third of brokers were “very concerned” about the effect on narrowing cover and spiralling rates.
A hardening market is also pushing some MGAs to the brink of insolvency. And the FCA test case has not helped matters, with brokers now fearing that insurers will tighten their wordings and capacity in certain areas as a result.
One of the first casualties of this tightening capacity could be a greater reluctance for insurers to delegate authority or ’give away the pen’. In the current climate, insurers are looking to cut poorly performing lines, and that can mean reducing relationships with MGAs.
The challenge facing MGAs is being compounded by increasing limits of coverage. Combined with hardening markets - where rates are trebling in some cases - certain MGAs are facing a particularly trying period.
Not all lines are badly affected, of course. Financial and professional lines appear to be facing greater difficulties when it comes to capacity. Professional indemnity is thought to be among the most challenged.
But high net worth, waste and recycling and property investors’ are also in a difficult place at the moment, Insurance Times has heard.
It’s not the first time Insurance Times has written about this topic, and I’m sure it will not be the last.
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