Howden Re’s Bertagna: European MGA market no longer trailing behind US and UK

With the European MGA sector growing by 20 percent year on year, it is now keeping pace with growth in the US and UK markets, according to Enrico Bertagna, who leads the MGA division of Howden’s reinsurance arm in Europe.

Speaking to The Insurer TV at the Monte Carlo Rendez-Vous, Bertagna said the barriers that previously caused the European market to lag behind the US and UK have been removed.

This shift was reflected in a recent survey sponsored by Howden which found that Europe tops the wish list for many carriers looking to do business with MGAs.

“Growth so far has come from the more sophisticated MGA markets, like Germany, the Netherlands, Italy and the Nordics. My expectation is that future growth will come from other territories, like France, Spain and even Eastern Europe,” Bertagna said.

He forecast that the $15bn European MGA market will continue to expand, driven by increased start-up activity and growth among existing players amid increased appetite from carriers.

Bertagna added that innovation, whether through new products, different distribution methods or technological advancements, was also spurring growth in the European MGA sector.

He said: “As long as they bring that innovation to market, there's always a space for MGAs, not only in the niche areas or the specialist areas. As long as they bring that innovation, I think there is a space for them.”

As a result, MGAs have a significant role in broader markets beyond their traditional niches. This is evident in conversations with carriers, which now consider MGAs as an option for entering new territories or product areas instead of developing their own underwriting capabilities, which is a lengthy process, he said.

“It's an expensive investment, by joining forces with MGAs that give them access to products that they don't necessarily understand or play with, they can fast track into the market. So there is absolutely a role for those MGAs to play there,” he added.

Issue of fronting arrangement availability remain

Despite ongoing growth in the European MGA market, Bertagna noted that one issue that remains is the availability of fronting arrangements. Unlike in the US, where MGAs have many options, Europe continues to trail in this area.

“Having more fronting options for Europe would unleash a lot of reinsurance capacity that at the moment is sitting there not being able to be deployed, simply because they don't have the licences and the infrastructure to go out to market,” he noted.

Watch the 9-minute interview with Howden Re’s Enrico Bertagna to learn more about: