How MGAs Drive Growth with Digital Insurance Payment Solutions

The combination of technology, agility, and a focus on customer experience is fueling growth and redefining expectations for the insurance industry. 

Managing General Agencies are rewriting the rules of the insurance industry. With their entrepreneurial mindset and niche expertise, MGAs have carved out an essential role in meeting demands that traditional insurers often overlook. 

Even more striking is how quickly they’re growing. MGAs are outpacing other segments of the insurance industry, thriving thanks to their agility, strategic focus, and willingness to adopt cutting-edge technology. From digital payment transformation to niche underwriting, MGAs have positioned themselves as resilient innovators in a dynamic and competitive market. 

Here’s a closer look at the forces driving MGA growth and what they mean for the future of insurance. 

Why MGAs Are Growing Faster Than Ever 

The surge in MGA success is evident in the numbers. The U.S. MGA market is currently valued at $102 billion, with U.S. MGAs alone sourcing $7.5 billion in premium for Lloyd’s, according to Conning’s “Managing General Agents Ahead of the Pack 2024” report. Even more impressive, MGA market growth reached 13% year-over-year in 2023, eclipsing the broader property and casualty (P&C) insurance sector's 10% growth rate. 

What’s Fueling This Growth? 

Several factors contribute to the meteoric rise of MGAs: 

• Specialized focus: MGAs excel at addressing underserved niches, such as cyber insurance, coastal properties, high-net-worth homeowners, and complex excess and surplus (E&S) risks. This expertise uniquely positions them to succeed where other insurers often fall short. 

• Strong E&S market growth: The E&S market, where many MGAs operate, has achieved remarkable premium growth. In the U.S., for all of 2023, E&S direct premiums written were $86.47 billion, compared to $75.51 billion in 2022, according to S&P Global’s “2024 US Excess & Surplus Market Report.” 

• A Symbiotic relationship with insurers: Hard market conditions and readily available underwriting capacity from fronting companies create mutual success. MGAs provide insurers access to specialized segments, while insurers support MGA operations. 

Combined, these factors have given MGAs a distinct competitive edge in an evolving landscape. 

New Tech and Relationships are Game Changers for MGAs 

One of the biggest reasons MGAs are outpacing competitors is their ability to adopt and integrate innovative technology. For MGAs, technology isn’t just an operational enhancer, it’s a strategic differentiator. 

Take, for example, non-affiliated MGAs, which are increasingly choosing their own core insurance platforms. Thanks to the falling costs of technology and the rise of cloud-based systems, these MGAs now have greater control over their data and faster time-to-market for new offerings. 

Further, many MGAs are essentially outsourcing claims and other cost centers to third-party administrators (TPAs). Also liberated from the limitations of legacy tech stacks and thinking, many TPAs are similarly tech savvy, data rich, and specialized. Such relationships between MGAs and TPAs allow for enhanced service quality, process efficiencies, and competitive differentiation. 

Even some affiliated MGAs, those owned by a carrier, are turning to new partners and independent technology platforms in search of competitive advantage. But regardless of affiliation, many MGAs have the technological agility to create efficiencies, seize opportunities, and stand out against the competition while many other insurers are burdened by the inherent limitations of legacy systems.  

The Role of Digital Payment Platforms 

Digital payment platforms are one area where technology adoption has genuinely transformed MGA success. These tools are changing the way insurers handle premiums and claims by prioritizing speed, simplicity, and convenience. 

Benefits of digital payment platforms include: 

• Accelerating premium payments and speed-to-revenue 

• Simplifying claims operations while reducing reliance on slow and costly paper checks 

• Delivering faster, more satisfying customer experiences and closing claims faster  

Spotlight on Success: NARS and ClaimsPay® 

North American Risk Services (NARS), a leading TPA, offers a compelling example of the impact digital payments can have. After implementing One Inc’s ClaimsPay® platform in March 2023, NARS achieved remarkable results, including: 

• 97% of claimants opting for digital payments when provided the option 

• $300,000 in cost savings per year from reduced paper check usage 

• A 70% increase in insurer volume, demonstrating the platform's operational efficiency 

Additionally, NARS experienced stronger vendor participation, with 74% of vendors now having stored payment preferences. With One Inc, NARS is able to receive claims, reconcile, and address all payment types and methods, streamlining claims processes, and underscoring how targeted technology investments can drive real-world business results. 

Navigating Challenges with the Right Tools 

While MGAs are thriving, their rapid growth comes with its share of challenges. For example, speed-to-market, meeting stricter regulatory requirements, and keeping up with the pace of technological advancements can strain resources, especially for small and mid-sized MGAs. 

When it comes to payment platforms, speed-to-market and speed-to-value are extremely important to MGAs. Look for a vendor partner with insurance and line-of-business specific experience. Pre-built integration accelerators, and even product-built accelerators may be available, slicing months off development and deployment time. And, because they’ve been previously validated, they allow insurers to quickly deliver contemporary payment experiences for customers, adjusters, agents, vendors, and everyone in the value chain. 

 Cloud-based deployments can also add substantial value, simplifying maintenance, updates, and upgrades. However, strategic solutions like One Inc’s payment platform, which has been designed specifically for the insurance industry, provide MGAs with the tools to succeed in these areas. Compliance benefits include: 

• Enhanced security: Advanced encryption and tokenization protect sensitive data and align with industry standards like PCI compliance 

• Regulatory adaptability: Continuous updates support adherence to evolving state and federal compliance requirements 

• Data transparency: Audit-friendly systems make documentation of payment activities simple, easing the burden during compliance checks 

These capabilities address common hurdles while boosting trust and credibility among insurers, vendors, and policyholders alike. 

What’s Next for MGAs? 

The future holds immense opportunity for MGAs willing to innovate and adapt. Trends shaping the landscape in 2025 and beyond include: 

• Private equity backing: Strong interest from investors is fueling mergers and acquisitions, enabling growth, innovation, and market expansion. 

• Emerging technologies: AI-powered risk analysis, workflow automation, and advanced policy management tools are becoming critical growth drivers. 

• Expanding market opportunities: Non-admitted lines and other underserved niches continue to prove lucrative. 

MGAs that lead the charge in adopting these technologies and targeting new opportunities will emerge as industry leaders. 

Setting the Stage for Tomorrow 

MGAs are demonstrating that success in the insurance industry comes from a winning blend of expertise, adaptability, and innovation. Their rapid growth and ability to adapt to changing market conditions show that agility and technology are more than buzzwords, they’re essential to staying ahead of the competition. 

The road ahead is paved with potential. MGAs are rising to the occasion, setting new standards for growth, efficiency, and customer satisfaction. The only question left is how much faster they will outpace the rest of the industry. 

Strong digital payments capabilities are quickly becoming baseline requirements for insurers of all sizes and types. As the leading digital payments network for the insurance industry, we’re here to help. Get in touch.