Members of the UK’s Managing General Agents’ Association (MGAA) are “prioritizing the development of new business lines and products to drive organic growth over the next three years according to the first MGAA Matters survey,” the organization said.
The announcement explained that “MGAA Matters is a research-based partnership between the MGAA and MGA start-up specialists Castel Underwriting Agencies. It has been launched to identify and raise awareness of the issues currently impacting the growth and success of UK MGAs.
“In the first independent survey 59 percent of MGAs questioned identified the main strategic priority for business growth over the next three years as moving into new lines of business or products. Over half of the respondents also said they would be updating technology and increasing business development/marketing activities (54 percent each). The third equal strategic priority areas were identified as increasing or widening capacity base and increasing business efficiency (44 percent each).”
Plans for M&A activity, however, weren’t a priority, as “less than 18 percent of respondents said they would be looking to acquire another business, while just over 5 percent said securing external investment was a priority over the next three years.”
The main factor the MGA’s polled identified as affecting business growth is the influence of the “regulatory landscape with close to 70 percent of those responding sighting the cost and level of ‘red tape’ on their businesses as the key factor affecting growth plans over the next three years.
“In addition the MGAs highlighted the increasingly competitive market (56 percent) and softening marketing conditions (46 percent) as other significant factors affecting growth.”
Mark Birrell, CEO of Castel, commented: “The results of our MGA Matters survey show the majority of UK MGA business leaders are rightly focused on driving cost effective organic growth. For approximately half of the MGAs questioned the ability to deliver this strategy will, however, depend a great deal on updating technology and enhancing capacity, which clearly identifies the need to secure the best underwriting partners and most efficient infrastructure.”
Peter Staddon, Managing Director of the MGAA added: “While the regulatory environment, tough market conditions and growing competition remain at the top of our members’ agendas, they are clearly telling us that organic growth built on product innovation, an increased focus on business development and supported by efficient systems and process, is the important strategic priority.
“MGAs are attuned to these challenges and are taking decisive steps to deliver sustainable growth, which is very good news for the UK insurance market.”
Source: Managing General Agents’ Association (MGAA)