MGA poll identifies organic growth through new product lines as main strategic priority
5 June 2014
Members of the Managing General Agents’ Association (MGAA) are prioritising the development of new business lines and products to drive organic growth over the next three years according to the first MGAA Matters survey.
MGAA Matters is a research-based partnership between the MGAA and MGA start-up specialists Castel Underwriting Agencies (Castel). It has been launched to identify and raise awareness of the issues currently impacting the growth and success of UK MGAs.
In the first independent survey1, 59% of MGAs questioned identified the main strategic priority for business growth over the next three years as moving into new lines of business or products. Over half of the respondents also said they would be updating technology and increasing business development/marketing activities (54% each). The third equal strategic priority areas were identified as increasing or widening capacity base and increasing business efficiency (44% each).
Less than 18% of respondents said they would be looking to acquire another business, while just over 5% said securing external investment was a priority over the next three years.
MGAs also identified factors they see as affecting business growth. The main influence was the regulatory landscape with close to 70% of those responding sighting the cost and level of ‘red tape’ on their businesses as the key factor affecting growth plans over the next three years.
In addition the MGAs highlighted the increasingly competitive market (56%) and softening marketing conditions (46%) as other significant factors affecting growth.
Commenting on the results of the first MGA Matter survey, Mark Birrell, Chief Executive Officer of Castel said: The results of our MGA Matters survey show the majority of UK MGA business leaders are rightly focused on driving cost effective organic growth. For approximately half of the MGAs questioned the ability to deliver this strategy will, however, depend a great deal on updating technology and enhancing capacity, which clearly identifies the need to secure the best underwriting partners and most efficient infrastructure.”
Peter Staddon, Managing Director of the MGAA said: “While the regulatory environment, tough market conditions and growing competition remain at the top of our members’ agendas, they are clearly telling us that organic growth built on product innovation, an increased focus on business development and supported by efficient systems and process, is the important strategic priority.
“MGAs are attuned to these challenges and are taking decisive steps to deliver sustainable growth, which is very good news for the UK insurance market.”
For further information, please contact:
Alex Wise, Concise PR
M 07710 665 615
T 020 7100 3960
Ian Barrett, Concise PR
M 07949 422257
T 020 7100 3960
1 The first MGAA Matters survey focused on MGA business growth challenges over the next three years. It looked at those areas presenting a real challenge to growth potential and how they plan or believe they should be tackled.
A total of 39 MGAs responded to the online survey conducted amongst MGAA Full Members during April and May 2014.
Full survey responses are below (statistics highlighted in the press release have been rounded up or down to the nearest decimal place):
The main factors seen as affecting business growth are:
- Regulation and compliance (69.23%)
- Increased competition (56.41%)
- Softening market conditions (46.15%)
- Availability of underwriting capital (35.90%)
- Recruitment and retention of talent (33.33%)
- Availability of investment capital (23.08%)
- Lack of understanding of the MGA’s role (20.50%)
- Out of date technology (17.95%)
The main strategic priorities are:
- Moving into new line of business/products (58.97%)
- Updating technology (53.85%)
- Increasing business development/marketing (53.85%)
- Increasing or widening capacity base (43.59%)
- Increasing business efficiency (43.59%)
- Staff training and development (23.08%)
- Buying other businesses (17.95%)
- Securing external investment (5.13%)
The Managing General Agents’ Association (MGAA) is a UK based not for profit organisation dedicated to representing true MGAs.
Formed in 2011, the MGAA also aims to provide a better understanding of what MGAs are and the contribution they make to the insurance industry.
The MGAA currently has 70 full members representing over £2.75bn of underwriting capacity. They are joined by 29 market practitioner members and 24 supplier members.
A board of directors have been elected to lead the organisation. In addition, five separate committees deliver benefits for members with a clear aim of shaping the future of delegated underwriting.
Castel Underwriting Agencies Limited, a member of the Barbican Insurance Group of companies, is a managing general agent (MGA) and club-style MGA formation platform focused on achieving success and driving innovation through collaboration. It provides experienced and entrepreneurial underwriters with stable capacity and a fast-track route to creating their own businesses. Castel is authorised and regulated by the Financial Conduct Authority.