George Bucur, MarshBerry Managing Director and Specialty Practice Co-Lead focuses on the growth of the specialty distribution marketplace, what large brokers are doing to grow, and asks “What can independent MGAs do to compete?”
To The Point: A MarshBerry Video Series
Evolving Dynamics in Specialty Distribution: Organic Growth Trends
March 16, 2023
George Bucur, MarshBerry Managing Director and Specialty Practice Co-Lead focuses on the growth of the specialty distribution marketplace, what large brokers are doing to grow, and asks “What can independent MGAs do to compete?”
Video Transcription
Hello, I’m George Bucur, managing director and co-head of MarshBerry specialty practice. Serving MGAs (managing general agent), MGUs (managing general underwriter), wholesale brokers and program managers, we’re here to talk about growth, and what firms are doing in the marketplace to achieve that growth, and what you might be able to do as an independent MGA or delegated authority organization.
In large, the specialty distribution segment has been on fire, going from 8% of the P&C (property and casualty) marketplace about a decade ago to 18% in 2022. Now, largely a lot of this growth is being realized by some of the large brokers in the marketplace. Keeping in mind a lot of those large brokers have a retail arm and a specialty arm. And what they’re doing is they’re acquiring MGAs where they can create centers of excellence on their retail side and drive that premium to that of their specialty acquired affiliates.
How do they capture more revenue? Well, they’re creating new products, they’re keeping the bigger piece of the commission pie as it goes through the insurance distribution chain, and they’re ultimately delivering a better experience for that of the end user, the retail brokers, and ultimately insureds. But how can you, as an independent MGA, compete? Largely, probably not having maybe the M&A (mergers and acquisition) prowess as some of the more experienced brokers in the marketplace that really make that part of their core business. You need to focus on organic growth. And what that means is enhancing your distribution channels, hiring internally to create and foster relationships, and ultimately translating that into more premium and higher quality experiences for your insureds. MarshBerry has a whole practice dedicated to just that. If you have questions around what you may do to help differentiate your organization in the marketplace and ultimately to allow it to grow and prosper, we encourage you to reach out. Until next time, be well.
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