Private investment has fueled the consolidation of the global insurance brokerage industry, producing some of the most remarkable value-creation stories in financial services. Would the next chapter be the rise of Managing General Agent (MGA) aggregators?
Executive Summary
For more than a decade, Private Equity led the consolidation of the global insurance brokerage industry. Firms such as Acrisure, Hub International, and Assured Partners turned fragmented intermediaries into billion-dollar platforms, combining operational scale, recurring commission income, and cross-sell synergies to deliver exceptional compounding returns. Yet as that model matures, valuations have risen, organic growth has slowed, and the levers of margin expansion are largely exhausted. The next chapter of investing in insurance will not be written in distribution but in underwriting — specifically, in the rise of Managing General Agent (MGA) aggregators, which are quietly becoming one of the most compelling, capital-efficient opportunities for private equity in the decade ahead.
Why MGAs are an attractive opportunity
An MGA, or Managing General Agent, is an insurance producer with delegated authority from an insurer to manage all or part of the insurer's business in a specific area. This can include underwriting and binding policies, managing claims, and marketing, MGA acts as a middleman between the insurer and retail agents or insured (Exhibit 1). Unlike a traditional broker who does not have underwriting authority, an MGA can create specialized products and make underwriting decisions within the insurer's guidelines.
Exhibit 1 – Role of MGA in Insurance Eco-system
The shift is already measurable. The U.S. MGA market surpassed $90 billion in direct written premium in 2024, expanding by roughly 7% YoY, while the broader P&C market grew only about 4%. Depending on methodology, some estimates place total U.S. MGA premiums as high as $114 billion, implying 16% annual growth and confirming that MGAs have outpaced nearly every other distribution segment. Even the hybrid fronting composite sector, which blends underwriting authority with capital facilitation, has surged from $10 billion in 2022 to $17.6 billion in 2024 — a 76% increase in just two years. These are not boutique agencies nibbling at the edges of the market; they are increasingly central to how insurance capacity is deployed and risk is priced.
Exhibit 2 – Growth of U.S. MGA Direct Written Premium, $B [Source: Conning Research]
Another attractive quality is that the market fragmentation is striking. The top 10 MGAs control only about 17% of the market, while entities ranked 11 through 50 represent another 27%. This long tail of specialty writers creates the perfect environment for disciplined roll-up strategies. The economics are equally appealing. MGAs regularly deliver EBITDA margins of 20 to 30%, reflecting their fee-based income, lean operations, and minimal capital requirements. Renewal rates in commercial lines approach 90%, providing stability and predictability that Private Equity funds value. Moreover, nearly half of the top 100 U.S. P&C carriers now maintain at least one MGA relationship, a clear signal that delegated underwriting authority has become an integral component of carrier distribution strategy rather than a peripheral experiment.
Exhibit 3 – Sector thesis of MGA vs Retail Brokerage
The Aggregator Advantage
The investment logic is straightforward. MGAs combine the recurring revenue profile of brokers with the analytical depth of underwriters, all while avoiding the capital intensity of carriers. They are asset-light businesses that expand through expertise, data, and access to capacity rather than through balance-sheet growth (something that Private Equity dislikes). Their income comes from commissions, profit-shares, and policy fees rather than underwriting gains or losses, which makes cash flows comparatively stable and easier to model. Because they operate in niche, knowledge-intensive markets such as Collector Car, Marinas, Energy, and Parametric Climate Solutions, they can achieve pricing power through specialization rather than scale. The best of the MGAs are also becoming technology companies — deploying predictive analytics, automated submissions, and API-based workflows that allow underwriting volume to grow faster than headcount or expense base (Exhibit 4). It is no surprise, then, that private equity already owns roughly 30% of all U.S. MGA entities, underscoring how rapidly institutional capital has embraced the model.
Exhibit 4 – Digital and Data & Analytics Investment by MGAs to bolster Underwriting and Prospecting
The aggregation of these entities into coherent platforms represents the next level of opportunity. A single MGA, however successful, remains exposed to concentration risk, limited diversification, and dependence on a few carrier partners. An MGA aggregator, by contrast, creates a portfolio effect. It can pool data across programs, identify emerging loss trends, negotiate more favorable carrier and reinsurance terms, and centralize compliance, finance, and technology infrastructure. This allows local underwriting units to remain entrepreneurial while benefiting from shared analytics and capital access. The analogy to broker roll-ups is apt but incomplete: whereas broker consolidation achieved scale in distribution, MGA aggregation achieves scale in underwriting intelligence.
Yet the model is not without its risks. Rapid aggregation can erode underwriting discipline if cultural integration or portfolio governance is weak. MGAs remain dependent on carrier capacity, and the loss of a single major fronting partner can derail growth. Multi-jurisdiction operations face regulatory complexity, particularly across admitted and non-admitted markets. The talent pool for experienced underwriters and data scientists is limited and expensive, creating bottlenecks for scale. The winners will be those who invest early in portfolio-level analytics, transparent governance frameworks, and capital-partner diversification.
Conclusion: The Decade Ahead
As these dynamics unfold, the very structure of the insurance value chain is being reshaped. Brokers who once dominated customer relationships are finding that underwriting expertise increasingly commands the margin. Carriers that traditionally housed underwriting talent within their walls are relying more heavily on delegated specialists. Underwriters find the lack of bureaucracy at an MGA refreshing and appreciate the upside they can get in a transaction. Private-equity firms, long accustomed to extracting value from distribution synergies, are discovering a new form of leverage: underwriting leverage — the ability to compound returns through disciplined risk selection, not just cost optimization. The implications extend beyond investment returns. As underwriting moves closer to data-driven ecosystems and capital becomes modular, MGAs are effectively becoming the 'operating system' of specialty insurance.
The next decade is likely to witness the institutionalization of MGA aggregation. Today’s patchwork of boutique agencies will evolve into global platforms backed by sophisticated investors, supported by reinsurance capital, and powered by technology that transforms how risk is priced and managed. Fronting carriers and alternative capital providers will compete to partner with the most data-intelligent aggregators. The lesson from the broker roll-up era is that scale, data, and discipline can turn a fragmented industry into a compounding machine. The same forces are now converging in underwriting. The next ten-billion-dollar insurance platform will not be a retail broker; it will be a data-driven MGA aggregator — a platform that fuses underwriting craftsmanship with capital agility and digital infrastructure to create enduring, fee-like growth. In a world where capital seeks durability and differentiation, underwriting, not intermediation, will define the next frontier of private-equity value creation.
Sources and References:
Aon (2024). MGA Market and Carrier Analysis 2024. https://www.aon.com/reinsurance/getmedia/8ef821e2-3cc2-45f1-85a1-e1b23257c9e3/20240822-mga-market-and-carrier-analysis-2024.pdf
Artemis (2024). ILS capital increasingly prevalent in growing U.S. MGA market. https://www.artemis.bm/news/ils-capital-increasingly-prevalent-in-growing-us-mga-market-conning/
Conning (2024). Managing General Agents: Growth and Transformation Continue. https://www.conning.com/about-us/news/ir-pr---mga-2024
Deloitte (2024). Why MGAs Are the Next Big Opportunity for Private-Equity Investors. https://www.deloitte.com/us/en/industries/financial-services/articles/why-mgas-next-big-opportunity-for-private-equity-investors.html
Gallagher Re (2024). A Mature MGA Market: Rising Premiums, Shifting Risks. https://www.ajg.com/gallagherre/news-and-insights/a-mature-mga-market-rising-premiums-shifting-risks/
EY (2025). Private Equity Pulse: Q2 2025 Report. https://www.ey.com/en_us/insights/private-equity/pulse
West Monroe (2024). Insurance M&A: Private-Equity Firms and Insurers Are Betting on Different Futures. https://www.westmonroe.com/insights/insurance-m-a-private-equity-firms-and-insurers-are-betting-on-different-futures
