The Canadian commercial insurance market may be loosening, but that doesn’t have to mean the role of managing general agents (MGAs) is fading.
Speaking on a panel at the National Insurance Conference of Canada, Pete Tessier (pictured left), president of CAMGA, noted that MGAs were pivotal through the recent hard cycle – but does their relevance continue even as conditions soften?
“Coming into the hard market, and through it, MGAs essentially propped up a lot of brokers, a lot of classes of business,” Tessier said. He added that the market conditions are changing and, depending on the type of offered products, “you could say the market is softer than a stick of butter on a back porch in July."
So he posed the question: What is the role of MGAs now?
For Stephen Stewart (pictured centre), president and CEO of Stewart Specialty Risk Underwriting, the answer lies in the fundamentals of the MGA model.
The value proposition for MGAs is not solely a safe harbor in a hard market where capacity isn’t otherwise available, he explained.
“It’s about skill, and it’s about ease of doing business, and it’s about quick turnaround. Those are all pillars of value proposition for MGAs, and that doesn’t change whether the market is hard or soft.”
Stewart cautioned that, in softer cycles, traditional carriers sometimes stretch into niche lines where they lack expertise – a dynamic that can create problems for brokers and clients down the road. In pursuit of market share, generalist insurers may start underwriting risks outside their usual comfort zones, entering specialty areas without the technical depth to price or manage them effectively.
“What we see in a softer market is generalists reaching up and down into specialty areas with which they have very little familiarity, because they’re trying to grab market share,” he said. “We all know how that goes ultimately.”
For Stewart, this underscores the long-term value of MGAs. While a soft market may temporarily make coverage more available, brokers still need to consider where expertise and consistency lie. “Different horses for different courses,” he remarked. “As a broker, you’re best to place the risk where it is best served for the long term. If that’s an MGA, so be it. If it’s a regular carrier, so be it.”
Sean Duggan (pictured centre right), SVP of special risks & claims at KRGinsure, agreed that MGAs are not just a fallback option when the traditional market pulls back. Instead, he said, they are increasingly positioning themselves as proactive partners for brokers navigating competitive dynamics.
“There’s definitely some proactive engagement with MGAs that’s happening,” Duggan noted. “I don’t even think MGAs are just another market or an alternative market or option for a client. I think more and more they’re being viewed as a potential strategic partner.”
In his view, this shift is tied to the challenges brokers face in a crowded market. With capacity more widely available, differentiation becomes harder – and MGAs are stepping up to help brokers stand out. “In such a crowded and competitive marketplace, from a broker's perspective, how do you differentiate yourself? How do you enhance value and strategic insights for your clients?” Duggan asked.
He pointed to data-driven insights, product innovation, and the ability to address unmet coverage gaps as key ways MGAs are adding value beyond simply placing risk. Some MGAs are also helping brokers mine their existing books of business for overlooked opportunities, strengthening the client relationship while creating new avenues for growth.
An audience member asked the panel whether Zurich’s recent investment in BOXX Insurance might signal a broader trend of carriers buying into MGA platforms, particularly given the appeal of their technology-driven models.
Stewart responded that acquisitions can make strategic sense in a softening cycle. “As the market softens, carriers look for different ways to bolster their book and to grow their book,” he said. “And the acquisition of an MGA is one way of doing that. You’re immediately putting a bunch of premium on the books.”
Duggan expanded on that point, suggesting the Zurich deal is part of a larger pattern. “I could see more examples of carriers acquiring the outsourced underwriting channel that they traditionally worked through before,” he said.
“I think it’s not just a product line, but it’s probably also the size and class of the client, where they can chase that business more efficiently.”
