At the recent Target Markets annual meeting in Scottsdale, Arizona, a gathering of 2,000 MGAs, program administrators and career executives, Insurance Journal sat down with Abby Taylor, executive vice president and chief operating officer of Jacksonville, Florida-based. Here is an edited transcript of the conversation.
Insurance Journal: What can you tell us about the MGA space in terms of its size and the factors driving its growth?
Abby Taylor: It’s always great to get back to target markets and get a broader sense of the MGA market. Today’s market is over $110 billion in the US. There are over 1,100 MGAs and program administrators working at this location, and we are seeing strong growth for MGAs in the UK and Europe.
One thing I particularly enjoy about getting into target markets is meeting agents and hearing the deep expertise they bring to their niche markets. Over the years, we’ve seen talented professionals leave big careers to hang out their shingle, and there are a number of reasons why. They have the skills, the talent is available to help them, and technology has made it easier than ever to build their agencies. MGAs today can move with agility and make decisions faster than traditional insurance companies. Part of what makes these conversations so valuable is understanding the businesses they’re trying to build and how we can help them.
IJ: On the flip side, what challenges does MGA face?
at: MGA needs to constantly adapt to the evolving insurance landscape. Some of the emerging challenges include changing segment-dependent rate dynamics. Ongoing technology investments, which are necessary to remain competitive. increased regulatory complexity; And with higher submission volume as well as lower conversion rates. They are also working to understand how to effectively leverage AI and automation in their business.
IJ: What can you tell us about the state of the E&S market?
at: The market for additional and additional lines continues to expand as the need for specialized, complex risk solutions increases. MGAs are seizing this opportunity by designing products designed for unique and tight space risks, with specialty insurance companies like Fotegra acting as essential partners by providing the capacity needed for this expansion.
The underwriting opportunities and regulatory framework in the E&S market make it highly attractive for innovation. When we look at the insurance market today, there is an increasing complexity of risk. Consider the cyber landscape 15 years ago—it’s dramatically different than it is today. Environmental risk is another example. These caricatures will continue to grow as the E&S market allows for the underwriting agility and speed required to address emerging and complex threats. This is where we see great innovation from MGA. As an insurer focused on niche underwriting, Forgra is uniquely positioned to support MGA in scaling efficiently and profitably in this evolving landscape. When our agents succeed, we succeed.
IJ: Fortegra recently announced a couple of UK developments. What is the rationale behind them?
at: As Forgra consolidates its position as a leading global specialty insurance company, it represents an important next step in our long-term expansion strategy. Lloyd’s is at the heart of the global specialty insurance market, and our presence in the underwriting room greatly enhances our ability to provide reliable insurance solutions and seamless market access to our partners.
It is based on our established insurance companies in the UK and Belgium. We have also recently been admitted to the NAIC Quarterly Listing of Alien Insurance Companies, enabling UK MGA to access US surplus lines business. Combined with our strong presence in the London market, this is a powerful combination as we can build on these natural relationships with brokers and agents on the ground while providing the ability to handle complex risks on both sides of the Atlantic.
IJ: It was announced that there is an agreement to acquire Fortegra by the Korean company DB Insurance. What is the strategic value of this transaction?
at: This agreement represents a significant milestone in Forgra’s evolution as the underwriter of choice for trusted agents and distribution partners. The partnership will combine Forgra’s proven expertise in specialty insurance underwriting with DB’s substantial capital base and global expansion strategy.
As part of its goal to become a leading insurance group by 2033, DB has sought to establish a broader presence in the US specialty insurance market and to enter European specialty markets. Forgra’s established market presence, proven track record of underwriting consistency, and long-standing distribution relationships make it an ideal partner to achieve these strategic objectives.
IJ: It’s a competitive space. How does Forgra stack up?
at: At Fortegra, we lead by creating value through partnership and collaboration. We provide more than just capacity.
Our strategy is built on five core themes: strong relationships with quality distributors, consistently underwriting excellence, disciplined claims management, focused balance sheet management, and leveraging AI and data science for better decision-making.
Let me highlight some differentiators. The US MGA market is set to hit $114.1 billion in 2024, growing at double-digit rates for four consecutive years. But growth without discipline is just volatility. Our data science systematic insights are applied to underinvesting excellence – we continuously analyze millions of data points to identify emerging trends, pricing opportunities and concentrations of risk before they impact results.
On claims, our philosophy is to ‘keep small claims small’ through proactive containment. We continuously integrate claims, underwriting and actuarial data into a continuous feedback loop. For complex claims, our Tiger team handles specialized claims, and we maintain direct oversight by our internal claims team, supplemented by selected TPAs.
We can write on an entered or surplus lines basis in all 50 states, support both ISO-based and proprietary formats, and offer insurance solutions. Our compliance team collaborates on functions throughout the program lifecycle to improve underwriting outcomes.
We are true program partners, and we look for similar focus areas to our MGA. When evaluating a colleague, we are assessing their writing skills and how they value technology. Will they collaborate with us on claims trends? These factors are important to our partnership, and we see them as differentiators for Fortegra as well in how we add value to our partners.
IJ: What are you doing to develop new talent for your company?
at: Recruiting and developing talent for the future is a major focus for Fortegra. As we approach $3.5 billion in top-line revenue, we recognize that we need to continue building infrastructure for the future. We have a great base of talent with deep insurance expertise, but the wider industry faces a significant challenge. The Bureau of Labor Statistics projects that by 2039, 50% of the insurance workforce will retire. We need to recruit new talent and develop our middle management ranks, and this is something we have prioritized at Forgra.
We have a leadership development program. A two-year rotational program for emerging professionals that provides diverse business experiences and focused training to launch their careers. We recruit from certain target schools, with multiple business or insurance expertise, and each year we have a cohort of leadership development candidates. They move into areas such as underwriting, compliance, marketing, HR or finance. Our goal is for them to gain a comprehensive understanding of how insurance works and develop their business skills. Today, we have program alumni in all these functions, and we are also about to launch a program in our London office.
But it’s not just about new talent – it’s also about investing in our existing talent, going beyond traditional coaching and mentoring. We are now developing our platform for continuous learning, the Fortegra Institute. This initiative equips our future leaders with expertise in underwriting, actuarial science and other insurance specialties. Many of our senior leaders will teach these courses, and there will also be a track for essential leadership skills.
The insurance industry is at a crossroads. A generation of seasoned professionals is nearing retirement, while a new wave of young professionals is looking for careers driven by purpose and values, and technology is fundamentally reshaping how we work. This imperative, recognizing Fortegra’s forward thinking, serves as a powerful differentiator in attracting the next generation of business vision talent. By fostering a culture that encourages innovation and creative problem solving, the company appeals to professionals seeking a career in a dynamic, growth-oriented environment. Its focus and focus on impact positions Forcegra as a compelling destination for professionals motivated to influence the future of specialty insurance.
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