’There is an inevitable pressure on firms to demonstrate how they can better manage their underwriting portfolios,’ says managing director
The availability of capacity for MGAs in a soft market can be a “very real challenge” as these firms face pressure “to demonstrate how they can better manage their underwriting portfolios”.
That was according to Nick Grazier, managing director at Bspoke Commercial, who told Insurance Times that the change in market cycle “will bring pressure on MGAs to stand out”.
A soft market refers to when the insurance marketplace has more potential sellers than buyers, meaning there is increased competition and coverages are more readily available.
As a result of this environment, rates are likely to be flat or decrease, which could affect the profitability of an insurance firm. And should this happen, it raises the question as to what affect this will have on the availability of capacity for MGAs.
Essentially, capacity is capital provided to an MGA by its insurer partners and determines the amount of risk an MGA can underwrite on behalf of these insurers – without it, an MGA would not be able to function.
Although Grazier is confident that Bspoke Commercial’s “long-term partnerships” for capacity offer ”a certain level of security” amid softer market conditions, he acknowledged that across the broader market, not all MGAs may be feeling quite so comfortable.
He explained: “While we haven’t really seen any fundamental changes for us in the availability of capacity, it’s a very real challenge as the market softens that we remain cognisant of and can see in the wider market.
“Irrespective of where a business is, as rates come down and margins are inevitably suppressed with increased competition, there is an inevitable pressure on firms to demonstrate how they can better manage their underwriting portfolios.”
Competition for business
Brokers revealed their concerns about MGA capacity in Insurance Times’ Five Star Rating Report: MGA market 2023/24, which was published in January 2024.
Read: More brokers drawn to MGAs with emerging talent and innovation commitment
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When commenting on how important the underlying capacity arrangements of an MGA were, 45% of the 1,850 brokers surveyed said this was very important, while 24% said it was somewhat or extremely important.
In addition, 40% of respondents stated that they were moderately worried about the possible removal of capacity from an MGA, compared to 24% of broker respondents who noted they were very concerned about this prospect.
However, Clyde and Co’s 2025 MGA Opinion report, published on 3 July 2025, revealed that 46% of insurance carriers had increased capacity to MGAs in the past 12 months, with 57% expecting to increase their MGA capacity over the next two years.
Derek Coles, chief executive at UGL, said it “is essential” for MGAs “to have a trusted relationship with capacity providers” and stressed that capacity is very much available.
He told Insurance Times: “Performance matters and MGAs like ourselves, with strong underwriting results and good claims metrics, will be attractive to capacity providers no matter what stage the cycle is in.”
However, amid softer market conditions, he warned that there is more competition for business. He added: “In consumer products, capacity has become harder in recent years and that has led to MGAs writing more in this space.
“What is currently being witnessed, however, is an increased level of competition for new business. Continued insurer consolidation is likely to mean competition across all classes is going to be tougher in a softening market.”
Standing out to capacity providers
Grazier believes the change in market cycle “will bring pressure on MGAs to stand out” to capacity providers ”and this challenge goes to the heart of what makes a successful MGA”.
He continued: “To stand out, we need to continue to invest in our underwriting governance and processes, including risk data capture and individual risk selection.
“Our ability to have the granularity of data to understand rating strength and identify, predict and address trends within the portfolio will be key.”
New figures from Insurance DataLab confirmed that productivity has been the standout story for MGAs this year. Published on 3 July 2025, the data showed that the average productivity rating rose by 1.5 percentage points year-on-year to 57.6% – the highest level recorded since the market intelligence firm began this annual analysis four years ago.
This improvement was driven by an 8% increase in turnover per employee, which now stands at more than £180,000. Staff costs held steady at 41% of revenue – a level that has remained consistent in each of the last three years.
Andrew Charlton, managing director at Phoenix Specialty UK, said that “consistency is key” when it comes to delivering in a soft market. He continued: “We are going to be relying on the fact that being able to deliver something consistent is what’s going to keep us in the game.
“It’s going to be able to keep us being competitive. It may change the outcomes of our targets over the next little while, but we understand that the cycle will turn and as long as we maintain a responsible approach to underwriting, it’s just coming through it.”
Coles added: “Our insurers see us as experts and we are proactive, open and transparent with them, which is a policy that has worked well for us and earned us a good reputation. We always have our insurers’ interests at heart and making their return on capital and a return for ourselves is at the core of the way we operate.
“We are steady, reliable and stable. We are not an MGA to knee jerk in response to market conditions. Our experience has shown us that transparency and openness to both our insurers and brokers are key differentiators.”
Growth
However, while MGAs are working to stand out and deliver consistency, Insurance DataLab’s figures also revealed that growth has softened slightly across the MGA market.
Its data showed that the average growth rating for MGAs fell to 55.4% from 55.9% in 2024.
But this headline figure masked a more positive picture at the aggregate level, with overall revenues across the report’s MGA cohort growing by 17.1% – up from 10% the previous year – as several firms reported exceptional top line performance.
Grazier said: “Against a backdrop of lower prices, more favourable policy conditions and potentially more lenient underwriting strategies, it is vital that MGAs have the infrastructure and tools to maintain an underwriting discipline while staying relevant and competitive.
“Our commitment to delivering niche and specialist products and services is core to us winning this battle. Not an easy challenge, but one that the MGA market has to rise to.”

His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
He took up the position of deputy news editor at Insurance Times in March 2023, before being promoted to his current role in May 2024.View full Profile
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