Executive Outlook 2022: Steve Masnyk, Canadian Association of Managing General Agents

Steve Masnyk, Managing Director, Canadian Association of Managing General Agents

MGAs, the fastest-growing segment of Canada’s insurance industry, will write about $4 billion in premium in 2021. And that’s on track to increase in 2022. Canadian Association of Managing General Agents (CAMGA) members, which represent over 80% of all MGAs, are seeing their books grow anywhere from 20%-to-60% year over year in premium. Most of that is new business.

Looking inwardly, the sector is becoming more structured. National business operating standards were adopted by MGAs in 2021. A code of ethics oversees this framework, and the CMGA designation/course is educating and providing tools for those working in the delegated underwriting marketplace.

Looking outwardly, carriers are realizing the growing potential and value in outsourcing underwriting to MGAs. Historically, MGAs deliver combined loss ratios between five and 15 points lower than the industry as a whole; those results make it very attractive for carriers in deploying their capital.

The past few years have seen many less profitable classes of risks being outsourced to MGAs by carriers, making it harder for brokers to find coverages with their primary carriers. This is especially true in the following classes: professional indemnity, CGL, commercial property, marine, small commercial, cyber, transportation, construction and farming. Brokers are now finding a home for these risks with MGAs. One misconception among brokers is that MGAs are competitors to their primary carriers; in fact MGAs complement these carriers in providing underwriting expertise that is backed by the capital insurers provide them. CAMGA members offer brokers an additional 50-plus markets to choose from.

Should Canada follow the path of similar markets like the U.K., Australia and the U.S., our MGA sector is poised to double in size and entrench itself as the premier underwriters for specialty and niche risks. More choice for expertise-specialized underwriting is very good news for the insurance consumer.

See all the 2022 Outlooks here.