In conversation with ReInsurance Business, Paul Jewell (pictured), CEO at Bridgehaven - the UK’s first hybrid fronting company – shone a spotlight on some of the key capacity trends shaping the re/insurance market in the early days of 2025. “There’s a lot of talk at the moment about the market cycle,” he said. “You hear a lot of noise and most of it comes out of the cat market in the US. To some extent, that seems to dictate the noise in the UK MGA market.
“But I think that’s a bit unfair. I think our MGA partners have opportunity in whatever cycle we’re talking about. Cycle management – or managing profitability through the cycle – is important for capacity, for profitability, for reinsurers. But actually, I think MGAs are well placed to do that because they have such a deep understanding of their customers.”
For most MGAs, he said, their place in the market is founded on a concrete basis – be that their knowledge of their customers, their service, their product offering, their chosen methodology, their technology delivery – or some combination of those factors. The reality is that MGAs are close to policyholders, and so they are in tune with them. What is becoming clearer is that this is actually a much more effective way not just of retaining high-quality customers but also identifying new ones.
“A lot of MGAs are well positioned to manage through the cycle and continue to grow,” he said. “There are lots of niche opportunities. I think sometimes the commentary from the bigger placements and the market dynamics of what's happening, particularly in the US while it does influence us, doesn’t actually reflect what’s happening with our MGAs as a broad brush. I think it’s much more nuanced than that.”
Identifying some of the other challenges impacting the marketplace, Jewell noted that these are new considerations but they remain areas of concern in 2025. New regulation, including the rollout of Consumer Duty, is one such concern. “I was pleased to hear that the regulator is being asked to consider competitive advantage higher up the priority list.” There’s good noise in the market about reconsidering some of the red tape that wraps around larger commercial clients, or the duplication of certain requirements across the insurance ecosystem; from brokers, to insurers, to MGAs.
Another trend is the flight to certain segments of the market, with renewables standing out as a key niche. “And we’ve certainly seen that the M&A activity in certain sectors has dropped while there’s a push into other sectors,” Jewell said. “Transaction liability, legal liability, after-the-event (ATE) and before-the-event (BTE) – we’ve seen a mixture and we've seen a lot of interest and a lot of growth in those sorts of business areas.
“If you look at the obvious ones, such as cyber, that’s a growing product class. We're also seeing ATE and other transactional liability and legal liability lines deliver significant growth. I think, for MGAs in 2025, a key theme is that of capacity and where it goes next.”
Jewell said he expects 2025 to bring increased competition for Bridgehaven, which has seen significantly increased interest in the hybrid fronting model in the UK market. “There’s now more focus on MGAs,” he said. “I think capacity was being constrained and I hope, over time in 2025, there will be more solutions for MGAs because we’re not able to solve everything. I’m hopeful that MGAs will continue to flourish and be supported by more companies.”
“A number of MGAs have said to us that they have identified a single product or single class of business that could be vulnerable to a systemic challenge,” Jewell said. “A lot of them are looking at how to expand their product offering, both to extract more from their existing customers but also to reduce the interdependency of the systemic risk from that product line.”
For some that means expanding their product lines, he said, while for others it means looking at geographical expansion. Meanwhile, the opportunity presented by a diversification of the capacity itself is getting more airtime in the UK now. “We talk about providing higher limits, increasing the opportunity for MGAs dealing with a particular demographic group or a particular region.
“The challenge for MGAs is how they can broaden out and diversify. Diversification takes many forms, but I think that those are the things that, from a risk perspective, MGAs are getting more ‘grown up’ about as they get greater scale and capability. They’re actively addressing how to take advantage of all these elements. I do believe geographical expansion will probably be more pronounced this year than it was when I started looking at this marketplace in 2022 and 2023.”
