It is increasingly becoming apparent that the MGA will be the route to market for many new startups that have innovated in distribution, process, and often product, but lack the critical mass (or motivation) to be able to justify full regulatory status of their own backs. With so many 'MGA incubators' offering the compliance, and back office solution necessary, there is huge support for this in the market.
looking to establish an InsurTech business that will originate insurance risk and match it with low-return money. It has been suggested that the executive’s plan is to find ways to eliminate links in an over-extended value chain that comprises retail brokers, wholesale brokers, MGAs, insurers, reinsurance brokers, reinsurers and capital providers. The London market is currently taking around 40 cents on the dollar to deliver the insurance product, leaving the incumbents wide open to the threat of disruption. By eliminating links in this chain through technology-enabled distribution and more direct access to capital, there is scope for cost to be eliminated and the model repurposed. Sources have suggested that Cavanagh is looking to line up low-return money with long time horizons from pension or sovereign wealth funds to provide the underwriting capital.