Best’s Market Segment Report: Managing General Agents Adapt to Changing Demands and Added Scrutiny

OLDWICK, N.J.--(BUSINESS WIRE)--As premium in the delegated underwriting authority enterprises (DUAE) sector continues to increase, the capacity being afforded this sector is becoming more selective and more dialed-in on long-term underwriting quality and greater stability on loss ratios rather than growth, according to a new AM Best report.

The Best’s Market Segment Report, titled, “Managing General Agents Adapt to Changing Demands and Added Scrutiny,” states that 2025 marked the fifth consecutive year of direct premium growth for managing general agents (MGAs) and their counterparts that comprise the overall DUAE segment. Total direct premiums written sourced from DUAEs reached $108.7 billion in 2025, up from $92.3 billion in 2024, according to data from the National Association of Insurance Commissioners.

While DUAEs have played a critical role in generating premium growth and developing coverage solutions, particularly for specialty products that cover evolving and emerging risks, the report described emerging headwinds that are materializing. “It’s not limited to capacity producers being more selective,” said David Blades, associate director, AM Best. “There is also a sense of heightened oversight that is becoming a more intentional focus of insurers seeking long-term success over short-term market share expansion. Additionally, tighter economics in renewal negotiations are presenting difficult challenges.” 

AM Best has maintained a stable outlook on the DUAE market segment, reflecting its important role as a go-to market for (re)insurers that continues to exhibit growth and resilience. Capacity for the DUAE segment has been buoyed by growth in the excess and surplus (E&S) lines market business, however, E&S premium growth has been moderating over the past 12-18 months. AM Best expects that going forward, surplus lines insurers will offer more tempered growth opportunities as heightened competition calls for the execution of more measured, opportunistic growth strategies. The growth drivers for the DUAE segment, such as diverse capital sources and the continued investment in talent and technology, will remain prevalent.

“The maturing MGA market will need greater discipline in building portfolios along with successfully adopting newer technologies to enhance workflow efficiency and improve responsiveness to emerging risks,” said Helen Andersen, industry research analyst, AM Best.

According to the report, AM Best’s performance assessment (PA) for DUAEs continue to provide insight that is consistent with its stable outlook for the segment and the overall tailwinds in terms of ongoing demand and the headwinds from a slowing growth in the surplus lines market and reinsurance market conditions. The PA is a forward-looking, independent, and objective opinion indicative of a DUAE’s relative ability to perform services on behalf of its insurance partners. 

Among the other highlights in the report:

• Compared to 2024, a slightly higher percentage of MGAs in 2025 were empowered to handle claims and underwrite risks for their carrier partners, including being granted underwriting authority in more than 75% of the contracts.
• The DUAE market continues to attract investment, but the composition of that investment activity has changed in recent years. Full acquisitions make up a minority of transactions, with more of an emphasis on strategic partnerships.

To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=366132. 

AM Best will hold a special analytical briefing with analytical staff and industry experts to explore developments within the delegated underwriting authority enterprises (DUAE) segment. The briefing is scheduled for today, June 30, 2026, at 10:00 a.m. EDT. Panelists include Matthew Jones, senior vice president, MS Transverse; Steven Nigro, managing partner, TAG Financial Institutions Group, LLC; and Jacqalene Lentz, senior director, AM Best. To register for the virtual briefing, please visit here.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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