How MGA Insurance Software Enables Success For MGAs Operating in Surplus Markets

The surplus lines market in the United States is expanding at a remarkable pace. According to AM Best, direct written premiums grew by 12.3% in 2023, reaching nearly 130 billion USD. This surge is a direct result of admitted markets becoming more selective, pushing cases with unique loss exposures into non-admitted markets where capacity providers are prepared to take on higher-risk profiles. 

This market shift creates a substantial opportunity for Managing General Agents. MGAs operating in surplus lines excel at pricing complex exposures and possess the flexibility to offer specialized coverages, limits, and terms rarely found in admitted lines. With the growing availability of non-traditional carrier structures, MGAs can secure risk capacity from hybrid and fronting carriers. This allows them to meet the increasing demand for coverage that protects unique and challenging risks. 

MGA's Central Role in the Surplus Lines Ecosystem 

MGAs are a natural fit for underwriting surplus lines because of their specialization in unique risks and niche insurance products. Their success hinges on balancing two critical functions. They must maintain speed-to-market when developing new insurance products for emerging loss exposures. At the same time, they need to provide a rapid turnaround for the agents and brokers who are their primary source of business. 

AM Best highlights that an MGA's commitment to high underwriting discipline is a key reason for their success in a market that traditional carriers often avoid. This expertise is matched with a vital distribution network of wholesale and retail brokers. Carriers frequently tap into these partnerships to distribute surplus line products. Effective communication and access to underwriting teams are essential for these relationships, as they allow brokers to secure personalized terms for their clients' unique risk profiles. 

Bridging the Gap with MGA Insurance Software 

This growth has also captured the attention of investors. Many are looking to acquire the next generation of MGAs that demonstrate specialized knowledge, a strong network of P&C distribution partners, and a competitive edge achieved through advanced technology. To build on the current market momentum, MGAs must invest in solutions that accelerate their operations rather than hinder innovation. This is where a modern MGA insurance software becomes essential. 

Stronger MGA-Broker Relationships 

Wholesale and retail brokers provide MGAs with deep access to the surplus lines market, making the MGA-broker relationship critical. To keep these partnerships strong, MGAs need to provide a seamless and efficient experience. This includes user-friendly portals for uploading customer details, quick responses on submissions, and clear education on the MGA's products. An effective MGA distribution software solution often includes out-of-the-box agent portals and automated submission intake. These features make it easier for underwriters to focus on priority cases and reduce time spent on manual data entry, strengthening broker loyalty. 

Driving Underwriting Efficiency and Consistency 

To ensure underwriting remains consistent and profitable, MGAs need an Insurance Underwriting Workbench. This solution can  

• Apply predefined underwriting rules to all incoming submissions, quickly assessing if they fall within the MGA's risk appetite.  
• Immediately notify brokers about out-of-scope submissions, preventing backlogs and delays.  
• Integrates with third-party data providers to enrich the underwriting process  
• Automate standard submissions with straight-through processing. 

Many of these platforms use low-code configuration, allowing MGAs to adjust underwriting rules and standardize workflows without custom coding. 

Flexible Forms & Rating

MGAs in the surplus lines market have the unique advantage of being able to adjust rates and forms to meet specific risks. To capitalize on this, they need software that places control directly in the hands of their business users and IT Teams. Modern rating engines achieve this by using low-code configuration, which allows underwriters and product managers to modify rates and apply rate modifiers on a granular level without needing to write custom code.  

For form creation, instead of complex HTML coding, MGA management systems allow teams to use simple DocX-based templates. Insurance rating software can then transform these Word documents into branded policy documents automatically. By simplifying both rate and form management, MGA insurance software makes it possible for MGAs to operate with lean, effective teams that can respond quickly to market changes and new requirements. 

Scalable MGA Technology 

A rapidly growing MGA needs technology that can scale alongside its business as it expands into new states or launches new products. MGAs can partner with vendors offering commercial off-the-shelf platforms that combine an underwriting workbench, distribution portals, and a rating engine into one system. This approach allows the MGA to concentrate on its core strengths of underwriting and product creation, confident that its technology will keep pace with its growth. 

Conclusion

As the nature of risk grows more intricate due to market volatility and climate-related events, the demand for coverage protecting niche exposures will only increase. MGAs in surplus lines who can effectively understand and price this risk will be highly valued by both customers and capacity providers. For these MGAs to sustain their growth and lead the market, investing in the right mga insurance software is the key to their future success.