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.”