It is a good time to be an MGA. There has been significant growth amongst both new and traditional agencies. Inevitably, many MGAs are looking at the potential next stage of their evolution – becoming a full-stack insurer.
According to an Insurtech UK survey, 57% of its MGA members would transition to a full-stack insurer if possible. In the UK the Prudential Regulation Authority (PRA) and the the Financial Conduct Authority (FCA) both have to agree to authorise this change in status. However, there are very few companies which have made this transition.
Earlier this year, PKF sponsored an InsTech event deep-diving into what deters those who want to transition, investigating the implications of an MGA becoming a full-stack insurer. This included a discussion of the regulatory and compliance implications, how much capital is needed and where to go for the relevant expert guidance and some alternative approaches.
This report examines some of the points made during this event.