Across the Delegated Authority Market: Chris Hobbs on What Makes a Successful MGA

The delegated authority market continues to grow at pace, with insurers increasingly turning to Managing General Agents (MGAs) and coverholders as a strategic route to market.

To better understand what is driving this growth, what insurers are looking for, and how aspiring MGAs can improve their chances of securing capacity, we sat down with ES Risks CEO, Chris Hobbs.

Drawing on decades of experience across the Lloyd's and international insurance markets, Chris shared his perspective on the opportunities, challenges, and realities of building successful delegated authority partnerships.

What is a binder, and why would an insurer choose to use one rather than write business directly?

A binder allows an insurer to delegate underwriting authority to a coverholder or MGA, enabling them to write business and bind risks on the insurer's behalf.

According to Chris, there are several reasons why insurers are increasingly embracing this model.

"MGAs are becoming more popular, both here in the UK and across Europe, for a number of reasons. Insurers see them as a way of deploying capital quickly, efficiently and cost-effectively, while also delivering higher levels of customer service to policyholders."

Rather than building specialist distribution networks themselves, insurers can leverage the expertise, infrastructure, and market access that MGAs already possess.

What makes a successful MGA attractive to insurers when seeking binder capacity?

For Chris, success begins with mindset.

"A professional, entrepreneurial approach would be one of the primary factors."

Insurers want to work with MGAs that are serious about building sustainable businesses and are prepared to take responsibility for the authority they are seeking.

Beyond leadership, operational capability is becoming increasingly important.

"The use of technology and data is becoming more and more important, as is having the infrastructure to meet regulatory requirements and the relationships needed to operate effectively within the market."

In today's environment, insurers are looking for partners who can demonstrate both commercial ambition and operational excellence.

What separates a binder opportunity that gains immediate insurer interest from one that struggles?

Many insurers are actively seeking MGAs that already operate within a particular class of business or market segment.

Chris explains that while a compelling proposition is important, execution matters just as much. "Infrastructure, regulatory awareness, technology that's already in place, and generally speaking a proven track record are some of the key requirements that underwriters look for."

A strong business case supported by evidence and experience will always stand out from a concept that exists only on paper.

What are the biggest mistakes MGAs make when approaching insurers?

One common mistake is attempting to navigate the process alone.

"They try to approach insurers on their own and don't use a broker to help with the relationship and the transaction."

Chris highlights that specialist brokers can play a critical role in positioning an MGA correctly, identifying appropriate markets, and managing the process from start to finish.

Preparation is another area where prospective MGAs often fall short.

Before approaching insurers, Chris believes several foundations must already be in place:

• A robust and realistic business plan

• An experienced management team

• Appropriate regulatory permissions

• Clearly defined operational processes

• A compelling market proposition

  
  

Without these elements, capacity discussions can quickly lose momentum.

How has the delegated authority market changed over the past five years?

The answer, according to Chris, is simple. "It's full steam ahead."

Insurers increasingly view delegated authority arrangements as a core component of their growth strategies.

"Underwriters are seeing their growth plans very much tied to the capabilities and growth of MGAs."

As insurers seek expansion, many recognise that MGAs already possess something difficult to build organically: established market positions, specialist expertise, infrastructure, and customer relationships.

This trend is likely to continue as carriers look for efficient ways to enter new markets and scale existing portfolios.

If you were launching a new MGA tomorrow, what would you focus on first?

Chris identified three critical priorities:

1. Build the Right Management Team

Experience and expertise remain fundamental.

Investors, insurers, and regulators all want confidence that the leadership team understands both the market and the responsibilities of delegated authority.

2. Establish a Robust Technology Infrastructure

Operational capability cannot be an afterthought.

An MGA's systems, controls, reporting capabilities, and compliance framework must be ready from day one.

3. Recruit Experienced Underwriters

Track record matters.

"Having experienced underwriters within the MGA, with a track record that you can effectively sell to underwriting capacity."

Insurers need confidence that the people making underwriting decisions understand the risks they are assessing.

What do people outside the Lloyd's market often misunderstand about ES Risks?

One misconception is that placing binder capacity is simply a matter of introducing one party to another.

In reality, successful delegated authority placements require a deep understanding of both the MGA and insurer perspectives.

Chris explains: "We get to understand the MGA, their business and expectations, and then match those characteristics and needs to the correct markets."

The value lies in identifying the right capacity providers from the outset, significantly reducing time spent pursuing unsuitable opportunities.

ES Risks also helps manage the process through to completion by understanding what underwriters need and ensuring those requirements are addressed throughout the placement journey.

What advice is commonly given to MGAs that you disagree with?

Chris points to expectations around timing.

"Many new entrants underestimate how long the process can take.Typically, we're talking three to six months, and sometimes longer."

While enthusiasm is important, securing underwriting capacity is rarely a quick process. Building relationships, completing due diligence, satisfying regulatory requirements, and negotiating terms all take time.

His advice is straightforward:

"Be prepared for a long play in order to get the capacity that you require."

Is bigger always better when it comes to MGAs?

Not at all.

In fact, Chris believes one of the greatest strengths of the MGA model is specialisation.

"One of the benefits of MGAs is the local expertise they bring, whether that's a class of business, a territory, or some other specialist feature."

Niche expertise often creates greater value than scale alone.

As Chris concludes:

"All too often, big is not necessarily beautiful."

Final Thoughts

The delegated authority market continues to evolve, creating significant opportunities for entrepreneurial MGAs and forward-thinking insurers alike.

However, success requires far more than a good idea. Strong leadership, operational readiness, regulatory awareness, technology investment, and proven expertise remain the foundations upon which successful MGA businesses are built.

For organisations considering launching an MGA or seeking binder capacity, the message from Chris Hobbs is clear: preparation, patience, and partnership are the keys to success.