Posts Tagged ‘MGA’



October 23rd, 2017

Challenging Market Is Fueling MGA M&A – GC@BB Commentary

Posted at 6:15 AM ET

andrew-beecroft-smjohn-rowlands-final-16-smAndrew Beecroft, Managing Director, GC Securities and John Rowlands, Senior Vice President, GC Securities

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  • Challenging market conditions are fueling growth and merger and acquisition (M&A) activity in the managing general agent (MGA) space
  • Recent acquisition multiples have been extremely high compared to historic values
  • Should markets harden, MGAs will need to continue to prove their value through differentiation

Challenging insurance market conditions will continue to drive growth and M&A activity in the MGA market, according to John Rowlands, Senior Vice President, and Andrew Beecroft, Head of M&A Advisory, GC Securities*.

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October 9th, 2017

Economic Pressures Fueling the Course Taken By Decision Makers

Posted at 4:00 AM ET

Here we review recent GC Capital Ideas posts discussing the economic pressures that are fueling the course decision makers take to maintain growth.

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September 10th, 2017

Challenging Market is Fueling MGA M&A - GC@MC Commentary

Posted at 5:30 AM ET

andrew-beecroft-smjohn-rowlands-final-16-smAndrew Beecroft, Managing Director, GC Securities and John Rowlands, Senior Vice President, GC Securities

Contact

  • Challenging market conditions are fueling growth and merger and acquisition (M&A) activity in the managing general agent (MGA) space
  • Recent acquisition multiples have been extremely high compared to historic values
  • Should markets harden, MGAs will need to continue to prove their value through differentiation

Continue reading…

August 24th, 2015

PA/MGA Growth Through Acquisitions, Part II

Posted at 1:00 AM ET

The vast majority of the respondents to Guy Carpenter’s survey of managing general agents intend to use company funds or company stock (if applicable) to make acquisitions (81 percent this year versus 47 percent in 2012). Despite access to bank financing, private equity and venture capital options, respondents showed no interest in employing those financial vehicles. It appears insurance companies continue to have ample capital and would use their own resources rather than go to outside sources.

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August 20th, 2015

PA/MGA Growth Through Acquisitions, Part I

Posted at 1:00 AM ET

The survey indicates a dramatic shift in the percent of program carriers interested in making acquisitions, following a couple of years of steady decline. This year, 69 percent of respondents indicated an interest in growing through acquisitions (up from 44 percent in 2012). When queried on the types of acquisitions they are seeking, most respondents’ interests appear to be acquiring either MGA/PA firms (63 percent) or teams of people (32 percent). This year none of the respondents was interested in acquiring third party administrators or wholesalers. Interest in carriers buying other insurance carriers remained relatively unchanged at 19 percent.

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August 19th, 2015

PA/MGA Reinsurance Purchasing

Posted at 1:00 AM ET

Reinsurance continues to play an important role for program issuing carriers. Sixty-nine percent of respondents to the survey this year indicated the use of both direct reinsurers and intermediaries, down slightly from 76 percent in 2012. Those managing their purchase through intermediaries exclusively increased to 25 percent of respondents from 18 percent in the prior year.

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August 18th, 2015

PA/MGA Risk Sharing

Posted at 1:00 AM ET

Program managers may also manage the performance of their programs through the pursuit of risk sharing on behalf of their PA/MGA partners. As we saw in past surveys, not all respondents require risk sharing. This year, a significant number of respondents said they utilize a sliding scale commission structure (92 percent versus 76 percent for the prior survey year). The percent of respondents utilizing some type of captive structure fell this year to 8 percent from 24 percent in the prior year. Alternately, 19 percent of the respondents will still pay flat commissions, a sizeable drop from 36 percent in 2012.

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August 17th, 2015

PA/MGA Performance Management

Posted at 1:00 AM ET

A carrier’s need for growth and profitability has to be closely monitored and controlled in the PA/MGA space. Every respondent in this year’s survey indicated that they had audit procedures in place to assure adherence to established risk selection and underwriting guidelines, financial billing, collection, remittance and banking guidelines, claim reporting, adjusting and settlement guidelines. Even though some changes have taken place in the number of audits conducted each year, including a notable increase in the percent of respondents doing four or more audits, rising to its highest level since 2008, this year’s results reflect the current and historical importance of the carriers’ PA/MGA management process. 

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August 13th, 2015

PA/MGA Operating Platform

Posted at 1:00 AM ET

Carriers continue to maintain flexibility regarding their requirements for the services they expect their PA/MGA partners to perform and what they feel they need to control. As in the 2012 survey, respondent carriers expect their PAs/MGAs to underwrite (100 percent of respondents), rate, quote, bind business (100 percent) and issue and service policies (94 percent). The survey indicates carriers expect their PAs/MGAs to perform premium audits (56 percent) and loss control services (69 percent). Most of the other services, even though not required or expected of PAs/MGAs, are often performed by them, a third party, or in many cases, the carriers’ themselves.

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August 12th, 2015

PA/MGA Personal Lines Appetite

Posted at 1:00 AM ET

On the personal lines appetite side of Guy Carpenter’s MGA survey, auto grew by 13 percentage points and umbrella grew by 6 percentage points over the previous survey in terms of pursuing growth. Both homeowners and medical were unchanged.

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