MGA Nexus Asia expands business lines on offer and expects to be “largest MGA in the region” within two years, says CEO Egerton
Nexus Asia expects to be the largest managing general agency (MGA) in Asia by gross written premium, as well as commission income and earnings before interest, tax, depreciation and amortisation, in the next 12 months to two years.
“We are also looking to expand our footprint to include new territories with the opening of at least two offices in the region within six months.”
This is the view of Tony Egerton, CEO of Nexus Asia, who told SIRC Today that this top market position would be “consistent with the growth trajectory of our group and matches our aspirations in other markets”.
He said that performance in Asia in 2019 has been excellent year to date for Nexus Asia, with organic growth and recent acquisitions both contributing to the MGA’s best year yet in the region.
Nexus has plans to expand the lines of business on offer in Asia, Egerton explained, to include other lines that are currently underwritten by the group elsewhere in the world. These may include trade credit, accident reinsurance and warranty & indemnity.
“However, our focus will remain on specialty coverages or niche opportunities within more established lines of business,” he added.
“We are maintaining an active acquisition pipeline here in the region and expect to complete at least one significant transaction within the next six to 12 months.”
While he couldn’t divulge further details on the deal, it would fit neatly with the firm’s growth ambitions.
“We are also looking to expand our footprint to include new territories, with the opening of at least two offices in the region within six months.
“As previously mentioned, this geographical expansion will be matched by additional lines of business and underwriting capabilities.”
Tech growth
Egerton added that advances in technology will be important for the MGA in the next few years.
“The growth and availability of large datasets, plus accelerating developments within open source software and technology infrastructure, are transforming the efficiency of underwriting and claims processes.
“We are embracing these changes in order to improve decision-making and deliver further agility across the entire business life cycle,” he said.
Looking at the wider market, the CEO said he is seeing “significant hardening of rates across various lines of business elsewhere in the world, and expect some of these to filter into the region over the next six to 12 months”.
However, he added: “We recognise the continued abundance of capital in Asia and are realistic as to what may be achievable in terms of improved underwriting terms and conditions locally in the short term.”
In terms of pricing in the reinsurance sector, he said he was “neither disappointed nor satisfied as pricing is driven by supply and demand factors beyond our control”.
“It is our job as underwriters to maximise the opportunities available to us on behalf of our capital providers,” he said.
One trend that the MGA has been observing is that alternative capital sources “continue to explore opportunities within the global reinsurance sector”.
“We expect that this will begin to include non-catastrophic risks and less volatile structures, as well as lead to the disintermediation of certain parties within the traditional distribution chain,” he concluded.
