0:00
What is the outlook for the sector from
0:02
your perspective over the next couple of
0:04
Okay. So, there's two things on this.
0:06
So, so first of all, I'll do the this is
0:08
the great news and then I and then I'll
0:10
do the cautionary stuff. So, so the
0:11
great news is is that the MGA sector uh
0:14
is the fastest growing segment PNC both
0:17
in the UK uh Europe and internationally.
0:20
You know, it has enormous amount of
0:22
investment going into it from PE firms.
0:25
There are more MGA starting up than
0:27
there are brokers. uh and this is
0:29
fantastic because it's delivering really
0:31
niche underwriting expertise for the
0:33
right for consumers. So that that the
0:35
buoyancy of the sector and the muscle
0:37
memory of the sector about the need to a
0:39
ensure it looks after its capital I the
0:41
insurer but b actually deliver uh
0:44
consistent underwriting profits I think
0:46
is very important. The the sort of note
0:49
of caution is that over the next two
0:51
years we're we are certainly heading
0:53
into a reducing rate adequacy
0:56
environment. So premiums are going to
0:58
come down. MGA business is a margin
1:01
business. So effectively MGA margins may
1:04
actually sort of slightly drop or be or
1:06
or be flat. And of course if the MGA's
1:09
operational costs haven't got the
1:13
there's always the danger that MGOS's
1:16
will look to grow their business to meet
1:19
their fixed costs in a market which is
1:22
actually sort of against them. Yeah.
1:24
And when we've seen that before in
1:26
softening markets, for one of a better
1:28
phrase, some MJS have got in distress
1:30
because it hurts their capital. And if
1:32
it hurts their capital and therefore
1:34
you're not looking after your capital,
1:36
you won't have a business because you're
1:38
using third party capital to actually
1:39
run an MGA. So that's the note of
1:41
caution. But I am very very confident
1:43
that you know the MGA community UK,
1:46
Ireland and internationally and in
1:49
Europe importantly has got the tools and
1:52
ability to navigate this sort of next 24
1:56
months where there's a a rating adequacy
