Global insurtech market is entering a new phase as managing general agents (MGAs) move away from aggressive expansion and place greater emphasis on underwriting profitability, insurance expertise and sustainable portfolio performance.
Across North America, a group of technology-focused MGAs is combining automation and artificial intelligence with underwriting capacity provided by insurers and reinsurers. Their development reflects a change in how technology is used within insurance distribution and risk selection.
According to Munich Re Specialty’s report, the insurtech MGA sector has progressed through three waves. The first focused on automating insurance distribution and replacing elements of manual underwriting with digital tools. The second introduced businesses built around defined underwriting strategies, using technology to expand their operations.
Key highlights
- The insurtech MGA market is entering a third phase of development, with AI agents and advanced automation following earlier waves of digital distribution and technology-driven underwriting.
- MGAs, insurers, reinsurers and investors are placing greater emphasis on underwriting profitability, portfolio quality and sustainable growth rather than rapid expansion.
- Specialized insurance expertise, disciplined risk selection and established relationships with capacity providers are becoming more important competitive advantages than technology alone.
A third wave is now emerging, driven by AI agents and more advanced automation. Each phase has challenged aspects of the traditional insurance carrier model by moving more underwriting and risk-selection functions into technology platforms.
Insurtech MGAs prioritize underwriting profitability over growth
Technology has improved the operating efficiency of MGAs, although its financial benefits extend beyond reducing staffing requirements.
An MGA built around automation from the beginning can potentially manage a substantial insurance portfolio with fewer employees than a business dependent on manual underwriting and administrative processes.
Digital systems can also improve the customer experience. Insurance buyers increasingly expect immediate quotations and straightforward online transactions, creating pressure on providers to offer faster and more accessible services (see how InsurTech Shifts from Disruption Hype to Durable Insurance Tech Models).
These capabilities can reduce operating costs and improve service delivery. Yet efficiency alone does not guarantee profitable underwriting.
Three waves of insurtech MGA development
| Development stage | Primary focus | Key characteristics |
| First wave | Automation and digital distribution | Digital platforms, automated quotations and reduced manual underwriting |
| Second wave | Technology-driven underwriting | Defined underwriting strategies, scalable operations and technology-enabled risk selection |
| Third wave | AI agents and advanced automation | AI-powered workflows, intelligent underwriting processes and greater operational efficiency |
The emphasis among MGAs, capacity providers and venture capital investors has increasingly shifted toward bottom-line results and the financial health of insurance portfolios.
For insurers and reinsurers providing capacity, the priority is to establish sound underwriting performance from the outset rather than support growth without adequate risk controls.
This places greater importance on experienced underwriting teams, appropriate risk selection and consistent decision-making. Sales capabilities and technology remain relevant, but they cannot substitute for a sustainable underwriting strategy.
Underwriting expertise becomes a competitive advantage for MGAs
Automation and Enterprise AI Adoption allow smaller MGA teams to manage more business, but these technologies are becoming increasingly accessible across the insurance industry.
As a result, adopting AI or automation is no longer sufficient to distinguish one MGA from its competitors.
Proprietary technology may still provide operational advantages, particularly where it supports specific underwriting processes. A more durable competitive position, however, depends on combining those capabilities with specialist insurance knowledge.
MGAs must determine which risks to accept, establish appropriate underwriting guidelines, define exclusions and maintain consistent risk-selection standards.
Key success factors for insurtech MGAs
| Success factor | Strategic importance |
| Underwriting profitability | Sustainable portfolio performance and disciplined risk selection |
| AI and automation | Lower operating costs, faster processing and improved scalability |
| Insurance expertise | Appropriate pricing, underwriting guidelines and policy exclusions |
| Specialty market knowledge | Targeted insurance products and deeper understanding of specific risks |
| Carrier and reinsurer relationships | Access to underwriting capacity and alignment on portfolio objectives |
| Proven track record | Greater confidence among capacity providers and investors |
These decisions have direct consequences for portfolio profitability, although the financial effects of inadequate underwriting may take several years to become visible (see Global Insurance Brokerage Market: Top 20 Largest Brokers, Revenue, and M&A).
That delay makes disciplined underwriting particularly important for technology-driven businesses seeking rapid expansion.
Automation can accelerate quotations, processing and portfolio management, but underwriting expertise determines how effectively an MGA controls risk while increasing its capacity to operate at scale.
Specialty insurance and proven performance shape MGA capacity partnerships
The wider availability of insurance technology is also supporting greater specialization among MGAs.
Businesses focused on particular classes of insurance or customer segments can develop a more detailed understanding of their exposures, policyholders and underwriting requirements.
This specialization allows MGAs to design products for specific market needs. Brokers can consequently use specialist providers to place unusual or complex risks instead of depending on a single MGA offering a broad range of coverage.
Capacity providers are also becoming more selective when evaluating potential MGA partnerships.
Insurers and reinsurers increasingly favor disciplined growth and demonstrated underwriting capabilities over aggressive expansion plans.
How MGA investment and underwriting priorities are changing
| Business area | Earlier market emphasis | Emerging market priority |
| Growth strategy | Rapid expansion and business volume | Sustainable, profitable growth |
| Technology | Digital distribution and process automation | AI agents and advanced workflow automation |
| Competitive advantage | Proprietary technology | Insurance expertise combined with technology |
| Underwriting | Scaling insurance portfolios | Risk selection and portfolio profitability |
| Capital partnerships | Supporting business expansion | Demonstrated performance and disciplined growth |
| Market positioning | Broad digital insurance offerings | Specialized products and targeted risk segments |
Previous performance is particularly relevant for teams establishing new MGAs. Experience in developing and managing profitable insurance portfolios can provide capacity providers with greater confidence in a team’s ability to repeat that performance.
Successful partnerships also require agreement between the MGA and its capacity provider on fundamental underwriting objectives.
These include the pace of portfolio growth, risk appetite, product design and expected loss ratios. Differences in these areas can affect the sustainability of the relationship and the performance of the underlying insurance business.
AI agents and insurance expertise define the next generation of MGAs
The next generation of insurtech MGAs will need to combine AI-driven automation with established insurance capabilities, specialist market knowledge and disciplined underwriting.
Advanced technology may allow MGAs to automate additional processes and operate with smaller teams, but it does not eliminate the need for experienced underwriters or appropriate portfolio controls.
Strong carrier and reinsurance relationships will remain central, particularly as capacity providers place greater weight on underwriting results and the quality of business written.
The competitive distinction is therefore moving beyond the traditional technology startup model, where rapid customer acquisition and expansion often dominate performance measures.
For insurtech MGAs, sustainable success will depend on applying technology to clearly defined insurance strategies, supported by specialist expertise, sound risk selection and proven underwriting performance.
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EXPERTS: Claudia Carnevale – Head of North America Programs at Munich Re Specialty (North America), Ariana Richter – Broker Relationship Leader at Munich Re Specialty
by Peter Sonner, Lead Tech Editor at Beinsure
