Conning--Recent Troubles in the MGA Market Likely Isolated Incidents

HARTFORD, Conn., April 22, 2014 /PRNewswire/ -- Several insurers operating through the Managing General Agent (MGA) market have recently incurred financial challenges, and concerns exist that these cracks are signs of more problems to come.  Conning's research suggests that these are isolated incidents, and that the long-term outlook for the MGA market is favorable, according to a new study by Conning.

"Managing General Agencies are a key distribution resource for insurers focused on specialty markets," said Bill Broomall, analyst at Conning. "While the MGA market has endured periods of volatility due to their association with a number of insurer failures, the model now appears to be stable due to improvements in risk management practices. With almost ten percent of commercial premium in 2012, the MGA channel is critical to accessing specialty risks."

The Conning study, "Managing General Agents: A Look at the MGA Specialists" analyzes the MGAs, their relationship and business model with agents and insurers, as well as the leading insurers who participate in this market.

"Based on our research, insurers with meaningful relationships with MGAs have remained fairly consistent.  The market consists of large global insurers and those insurers with a business model primarily focused on writing or servicing program business," said Steve Webersen, director of research at Conning. "Insurers of all different sizes use MGAs to produce premium, often a more meaningful channel for the small and midsized insurers. Our analysis of MGA insurers indicated that as a group they generated direct premium growth above the commercial property-casualty industry in seven of the past ten years and have also outperformed the commercial market in loss ratio. The long-term outlook appears favorable, as the MGA market appears well positioned to grow from current levels. MGAs willing to incorporate technology and data analytics into their product offering can enhance their value proposition to insurers and hold a competitive advantage over the long term."

"Managing General Agents: A Look at the MGA Specialists" is available for purchase from Conning by calling (888) 707-1177 or by visiting the company's web site at www.conningresearch.com.

About Conning

Conning (www.conning.com) is a leading investment management company for the global insurance industry, with more than $85 billion in assets under management as of March 31, 2014 through Conning, Inc., Conning Asset Management Limited, Cathay Conning Asset Management Limited, and Goodwin Capital Advisers, Inc. The company's unique combination of asset management, risk and capital management solutions and insurance research helps clients achieve their financial goals through customized business and investment strategies. Founded in 1912, Conning is focused on the future, providing clients with innovative solutions, leveraging its global capabilities, investment experience, and proprietary research. The company is headquartered in Hartford, Connecticut, with additional offices in Purchase, London, Cologne, and Hong Kong.

SOURCE Conning

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