From capacity to capability: what’s next for MGAs in Australia and New Zealand?

Managing general agents (MGAs) have become an increasingly important part of the insurance market in Australia and New Zealand. But with capacity now abundant and regulatory expectations rising, the question facing MGAs is shifting from whether they can access capacity to how the capacity provider is appropriately supporting the MGA’s strategic objectives.

Ahead of SIRC 2026 in Singapore, Adam Matteson, Managing Director, MGA, and Rupert Whicker, Managing Director, Head of MGA & Facultative, Howden Re ANZ, discuss how the region’s MGA market has matured, and the implications for continued development across the region.

How has the MGA landscape in ANZ changed over the last year?

The ANZ MGA market has moved from expansion to institutionalisation. Whilst there remains an increase in the number of propositions and more capacity using the ANZ MGA channel, the threshold for credibility has risen. Carriers now expect an MGA to demonstrate not only distribution and underwriting expertise, but also data quality, claims governance, operational resilience and a sustainable path to profitability. 

That shift has been driven by MGAs now being a significant part of the insurance ecosystem. MGAs are now viewed by regulators as material service providers to insurance companies. As a result, the level of operational maturity expected of MGAs is now mirroring the capabilities of their insurer capacity providers.

Industry estimates suggest there are now more than 300 MGAs and underwriting agencies operating across Australia and New Zealand, collectively writing approximately AUD 10 billion of gross written premium.

What is driving MGA growth in the region?

MGA growth is continuing to be driven by demand gaps, specialist talent looking to improve the economic value they can create for themselves, insurer appetite for variable-cost distribution, and the ability of technology to make segmentation economically viable.

Demand gaps are most visible in specialty areas of the construction, credit, agricultural, motor and personal lines markets, where traditional carriers have reduced appetite. At the same time, experienced underwriters are leaving carrier roles to build their own businesses, where they share directly in the value of the portfolios they create. 

Which lines or segments are seeing the most MGA activity?

Property and liability remain key product segments, including expansion of specialty lines within these sectors. A theme that is emerging is for segments or channels such as consumer-related propositions, embedded insurance (e.g. affinity products) and emerging technology risks.

How are relationships between MGAs and insurers evolving?

The relationship is becoming more institutional and more integrated. Carriers are looking to develop deeper relationships with MGAs than solely individual product relationships. The investment in understanding an MGA’s underwriting, technology, claims, compliance and distribution models means that being a third-party service provider to an insurer takes time and cost. Developing a broader product MGA relationship with a carrier allows those costs to be more easily diluted.

The successful MGAs are treating carriers as a strategic capital partner, rather than a replaceable source of paper. MGAs are ensuring diversity of their business offerings either through the producer range or within a product range as well. The single-carrier, single-product model is giving way to multi-carrier arrangements.

In practice, a deeper relationship can provide long-term benefits such as longer binder tenures, multi-year capacity commitments, profit commissions or carrier equity stakes. Reinsurance is playing a growing role, with varied structures including quota share reinsurance of fronting arrangements allowing carriers to support MGA portfolios while managing their own net exposure.

What impact is the softening market having on MGAs?

A softening market exposes whether the MGA has a real franchise. If its only advantage is access to scarce capacity, that advantage erodes. If it has genuine distribution, specialist underwriting, superior service and good data, it has value.

Currently, capacity is abundant, and carriers are increasingly prepared to deploy larger lines at lower pricing, creating pressure on both rate and achievable signed share for MGAs with smaller deployable line sizes. As a result, smaller MGAs are having to rethink strategies around accessing business, whether via expanded distribution streams or niche product offerings.

How is regulation shaping the MGA market in ANZ?

Whilst regulation is not suppressing the MGA model, it is professionalising it. MGAs are increasingly sitting inside the carrier’s regulatory and operational-risk perimeter, meaning that insurer-grade governance is becoming a condition of obtaining and retaining capacity.

In Australia, APRA’s CPS 230 operational risk standard, in force since July 2025, requires insurers to manage material service providers, including coverholders, within their own operational risk framework. In New Zealand, the Conduct of Financial Institutions (CoFI) regime has raised expectations of fair customer outcomes across the distribution chain. For existing MGAs, this potentially means more frequent audits, enhanced reporting, investment in systems and compliance resource. The cost of meeting these standards is also raising the barrier to entry for start-up and/or single-product MGAs.

What role are M&A and consolidation playing?

We look at M&A in two parts: existing MGAs and start-ups.

Existing MGAs are in a dynamic ‘scale or sale’ period; there is no shortage of buyers and sellers.

Buyers are becoming more selective. They are looking for sustainable earnings, defensible distribution, strong carrier relationships and management depth. An MGA with premium but weak controls is not the same asset as an MGA with a transferable underwriting franchise. 

Start-ups are becoming more creative around how they raise both risk and working capital. For risk capital, the role of an MGA broker/adviser is to allow broader carrier connectivity and multi-carrier binder options. For working capital, a more thoughtful model of sourcing ‘financial plus’ partners for the MGA is providing optionality. This includes joint ventures, vendor finance, debt instruments, and incubator models.

What should the wider Asian market take from the ANZ experience?

Whilst there are significant differences between how individual Asian markets view MGAs, key macro points mirror the requisite qualities of local ANZ MGAs in order to be successful. In particular, such qualities continue to be the need for local demand, specialist distribution, appropriate legislative and regulatory support and carrier desire to commit capacity.

What’s next for ANZ MGAs in 2027?

In 2027, the market will reward MGAs that combine demand pull, specialist underwriting, disciplined capacity and insurer-grade governance. We will see more consolidation, more data-led portfolio management and more integration between insurance and reinsurance, with reinsurers continuing to take a more direct role in MGA programmes via dedicated MGA facilities and structured quota share reinsurance. However, growth will be selective. The winners will be businesses that can show why brokers need them, why carriers should support them and why their economics remain sustainable through the cycle.

Carriers will also start to develop thoughts around how in-house MGA-style models can act as a source of alternative capital to broaden their own risk appetite without increasing volatility or diluting returns.