Even though responses to the questions on the perceived size of the PA/MGA market continue to reflect it as large, the respondents this year continued the trend begun last year. Historically, the results of our survey reflected a majority opinion (37 percent to 40 percent) that this market segment was in the USD30 billion to USD40 billion range. This year, only 15 percent reflected historical results, while 54 percent (up from 37 percent a year ago) believe it to be USD20 billion to USD30 billion.
While the majority of the respondents believe the PA/MGA marketplace today is smaller than it has been in prior years, they do believe change will occur and that it will grow. Sixty-five percent of respondents believe this segment will grow, while only 6 percent see it shrinking. These perceptions may be a result of the fact that 46 percent of the respondents are experiencing a greater number of new business opportunities in their pipelines, while 39 percent are holding steady year over year.
Program marketplace profitability was addressed again this year with 74 percent of the respondents believing the combined ratio for the PA/MGA market is greater than 95 percent and 15 percent believing it is over 100 percent. This represents a significant swing in opinion from last year when 32 percent of respondents felt the combined ratio was over 100 percent. So, while the program marketplace is expected to remain profitable, the perception of the extent of the profitability has changed.