Europe ‘ripe’ for MGA/MGU model given innovation gap & consolidation
The European insurance market is “ripe” for a major expansion of the delegated authority business, a fact which US wholesale brokerage and MGA group Ryan Specialty hopes to leverage for foreign growth via its pending purchase of MGU platform Castel Underwriting Agencies, a top officials has claimed.
“We look at the international market as very much being ripe for delegated authority expansion,” founder and CEO Pat Ryan told his company’s fourth quarter earnings call.
Recent carrier consolidation and a lingering shortfall of innovation has driven the opportunity on the European market, Ryan believes.
“A lot of that comes from consolidation of carriers over last number of years, but also a need for innovation in the European market,” Ryan said. “We bring innovation.”
Conviction on the European market's pending MGA/MGU turn helped drive the recently announced purchase of MGU platform Castel Underwriting Agencies from global re/insurance group Arch Capital and minority shareholders, Ryan said. Castell brings $44 million of top-line to the Ryan group via its 13 niche MGUs with product offer across transactional liability, renewable energy, construction, marine, and other specialty lines operating out of offices in London, the Netherlands and Belgium. The deal, announced in January, is expected to close in the first half.
Ambitions appear to go well beyond onboarding $44 million in revenue plus the organic growth which those MGAs might already have plotted.
“We’ll get quick materialisation of productivity improvements and bring innovative products to various European markets,” the CEO said.
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