This article is shared with the kind permission of Insurtech360.
The MGA sector is set for further notable expansion and innovation in 2025, with technology driving transformation across multiple dimensions. Expectations across the industry reflect increased demand for enhanced digital solutions that streamline operations, improve and expand distribution into new and niche sectors, and strengthen end-to-end underwriting and claims management. As a service provider and incubator for emerging and growth-stage MGAs, Pro MGA Global Solutions supports multiple MGA propositions launching and growing in the market, and there is substantial momentum around insurtech heading into 2025.
The ecosystem for insurtech-driven MGAs is expanding globally, with the U.S., Europe, Latin America and the Middle East at the forefront of this growth. The sector’s agility and entrepreneurial spirit make it a natural testing ground for new technologies globally, with MGAs functioning as innovation hubs where insurtech solutions can be implemented and refined.
MGAs are critical players in testing and validating new technologies, from AI and automation to customer-centric platforms. Lessons learned in the MGA space often cascade to the broader insurance industry, where MGAs serve as models for technology-driven efficiency and responsiveness. By deploying insurtech innovations, MGAs provide valuable insights and proven practices that other insurance entities can adopt to enhance their own offerings.
Enhanced Underwriting
The evolution of specialty risks at Lloyd’s has been significantly influenced by the adoption of Enhanced Underwriting practices, as highlighted in the Lloyd’s Market Association (LMA) report, The Growth of Enhanced Underwriting in the Lloyd’s Market: The New Normal? This comprehensive analysis sheds light on how digital tools, advanced data analytics, algorithmic underwriting and other technology-driven strategies are not only reshaping underwriting but also enabling the Lloyd’s market to address increasingly complex specialty risks.
The report underscores the shift toward more granular, data-informed underwriting processes, which are essential for managing emerging risks such as cyber threats, climate-related exposures, and geopolitical volatility. Enhanced Underwriting is far from full maturity, as the study notes – reflected in the estimated USD 5 billion in current premiums passing through Enhanced Underwriting models, accounting for c.7% of the USD 69.4bn premium written in Lloyd’s (2023).
However, the report flags that premium only tells a part of the story. “Through interviews and a market survey, we have identified at least 40 Enhanced Underwriting models being developed by carriers, MGAs and brokers, with many others considering build outs in the next 2 to 3 years.”
Certainly from an MGA incubator and broker facilitation perspective, we can see key benefits for brokers and insurers, such as simplifying placements, enhancing governance, and aligning capital risk more effectively.
In addition, the fresh thinking around Enhanced Underwriting, data standardisation and market interoperability helps strengthen compliance oversight and address concerns regarding regulatory inconsistencies.
Embedded Insurance Gains Scope and Relevance
Meanwhile, demand for embedded insurance is rising as non-insurance brands—such as retailers, peer-to-peer lending platforms, and automotive manufacturers—integrate insurance options at the point of sale, making coverage more accessible and convenient. The embedded insurance market is expected to exceed $70 billion in GWP by 2025, with MGAs poised to benefit and drive much of this growth.
In terms of tech deployment, low-code platforms are particularly appealing to MGAs in this space, as they enable quick, flexible product development and seamless integration with third-party systems. These platforms allow MGAs to respond to sector-specific demands with tailored, user-friendly products that align with consumer expectations for simplicity and relevance. Pro MGA Global Solutions anticipates that MGAs will play a pivotal role in expanding embedded insurance going forward.
AI and Automation Transforming the MGA Landscape
Pro MGA Global Solutions is seeing a growing number of MGAs embedding AI into their strategies to enhance product development, risk assessment, and back-office efficiencies. AI tools are increasingly applied in underwriting, pricing, and fraud detection, significantly boosting agility.
At the same time, automation remains a cornerstone of MGA development, offering end-to-end efficiencies across the insurance lifecycle—from underwriting and policy management to customer service and claims processing. As MGAs scale, automation provides a foundation for operational efficiency, allowing lean teams to handle increased business volumes without compromising service quality. With market expectations pointing to streamlined processes and rapid scalability, MGAs are deploying automation solutions that allow them to compete effectively by reducing manual work and repetitive tasks.
We forecast that process automation will play an increasingly significant role in MGA business plans in 2025, supporting sustainable expansion while reducing overhead.
The Vital Role of Talent in a Tech-Driven MGA Landscape
Talent remains a key driver of MGA success. As MGAs evolve, they require diverse expertise, not only in underwriting but also in technology development and digital strategy. Attracting and retaining skilled tech talent is essential to building scalable operations and optimising digital solutions. The MGA market is increasingly recognising the value of tech-oriented teams capable of leveraging AI, automation, and data analytics to unlock new growth opportunities.
In 2025, the MGA sector will likely see heightened competition for tech and coding talent, with a focus on roles that support digital transformation and innovation. Pro MGA Global Solutions is committed to fostering this talent, offering MGAs the resources and support to build teams capable of driving industry-leading results.
Keeping pace with rapid advancements
As the insurance industry seeks to keep pace with rapid technological advancements, MGAs stand out as the ideal proving ground for the latest in insurtech. Their flexible, agile business models enable them to quickly trial and adopt new tools, from AI-driven risk assessment and fraud detection to automated claims processing and embedded insurance offerings. By testing and refining these technologies in real-time, MGAs offer a low-risk route for innovation for the sector’s capacity providers to add capital backers, often yielding results that shape broader industry practices.
The test-and-learn approach MGAs bring allows them to bridge technology with real-world applications, driving insights that insurers can use to scale up solutions more confidently. In this way, MGAs do not just contribute to operational improvements but actively set the pace for a more responsive, customer-centred insurance ecosystem. As insurtech grows, MGAs will continue to play a critical role as accelerators, bringing advanced technology from concept to trusted industry standard. While initiatives like Enhanced Underwriting and full end-to-end automation are at the beginning of their journeys, they’re only heading one way for the global specialty insurance sector. Going forward, the intersection of compliance and algorithmic underwriting represents both a challenge and an opportunity for insurers in the face of regulatory evolution and technological transformation, but it’s an exciting space.
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