“Asset Light” insurance providers such as managing general agents (MGA) are burgeoning in the US and are growing in importance globally, a report by Howden Tiger and research group Conning says. 

Premiums underwritten by non-insurer affiliated US MGAs, have more than doubled since 2018, rising to $US33 billion ($51 billion) last year. 

Fronting companies wrote more than $US13 billion ($20 billion) in total premium last year, more than double the business written in 2021.   

“Asset-light entities are delivering for brokers and insureds, developing new products for some of the most challenging exposures in today’s market, including cyber risks and property perils impacted by climate change,” Conning Insurance Research Director William Pitt said. 

“At a time when data analytics are increasingly pivotal, these agile entities can often move faster than traditional carriers, identifying and developing attractive niche markets and offering speedier submission turnarounds”. 

More broadly, the growth of asset-light businesses reflects increasing dependence of large sections of the market on technology skills that have not historically played a large role in insurance, according to the report. 

“Traditional carriers have often found it hard to recruit talented individuals in fields such as software development and data science, whereas these individuals are often attracted to the entrepreneurial opportunities presented by MGAs,” the report says. 

MGAs, which are known as underwriting agencies in Australia, are described as “arguably the most versatile insurance structure ever invented” in the report, which identifies that they play an important role notably in the UK, Australia, Canada and the Netherlands, as well as in the US. 

Click here for the report.