DUAE premium volume grew 14.5% in 2024 to $89.9 billion, AM Best report shows

By Chris Munro

June 4 - (The Insurer) - MGAs and other delegated underwriting authority enterprises (DUAEs) once again booked double-digit growth in 2024, with new figures from AM Best showing the segment generated $89.9 billion in direct premiums written (DPW).

That figure, based solely on data sourced from the U.S. National Association of Insurance Commissioners, was up 14.5% from 2023’s $78.6 billion and marked the fourth consecutive year in which growth exceeded 10%.

AM Best said the increase came about despite average account pricing moderating or even declining in some lines of business, including workers’ compensation, professional liability, D&O, employment practices liability and cyber.

“The premium momentum that is owed to MGAs writing specialty commercial lines of coverage shows no sign of slowing down,” the rating agency said in a market update.

However, the report also said certain market segments are experiencing moderated pricing, which could affect future growth rates, especially for newer or less capitalised MGAs.

At the same time, new market entrants that have knowledge and expertise in niche, highly specialised markets remain attractive to insurers that have both the capacity and appetite to assume specialty risk.

AM Best said its DPW data "does not represent the entire universe of MGAs since many MGAs generate annual premiums for insurance companies that fall below the minimum threshold … required for the MGA’s premium to be reported via Note 19 in the annual NAIC statement".

The rating agency said it counted more than 700 U.S. MGAs that met that threshold in 2024, up from more than 600 in 2023.

However, market research indicates that the total number of MGAs operating in the U.S. market currently totals more than 1,000, AM Best said.

DUAE FOCUS

The number of insurers that generated $500 million or more in DPW through exclusive partnerships with MGAs grew to 19 in 2024, compared with 12 in the previous year. Six booked more than $1 billion, AM Best’s report said, compared with three in 2023. Eighteen of the top 20 grew their DPW in 2024, including 12 with double-digit premium growth.

“While increased premium totals point to general market trends, it also reflects that insurers are directing increased resources and placing a heightened level of strategic importance on their exclusive MGA relationships to help achieve business plan goals,” the agency said.

For the top 20 insurers generating DPW through non-exclusive MGA partnerships, DPW totalled $24.1 billion, which accounted for 26.8% of the total MGA-produced premium for 2024.

In 2024, there were 11 insurers that generated more than $1 billion of DPW through non-exclusive MGA partnerships, up from six the year before.