Rating agency maintains is positive view on delegated underwriting authority enterprises segment, as well as for the global reinsurance business.
AM Best is maintaining its positive market segment outlook for managing general agents’ (MGA) business.
Its positive view for what the rating agency calls the delegated underwriting authority enterprise (DUAE) segment was attributed to “sustained growth and niche expertise”.
This is despite “potential issues that could arise from capacity challenges and rapid growth”, AM Best said.
According to the Best’s Market Segment Report, “Market Segment Outlook: Delegated Underwriting Authority Enterprises,” capacity for the DUAE segment has benefited from ongoing material growth in the excess and surplus (E&S) market.
Elevated catastrophe activity and the regulatory environment ”continue to direct more premiums into surplus line businesses”, the rating agency claimed.
“The DUAE distribution channel continues to increase its market share, supported by strong and sustained premium growth globally,” AM Best said.
AM Best uses DUAE as a blanket term to capture MGAs, managing general underwriters, Lloyd’s coverholders, programme administrators and underwriters, underwriting agencies, direct authorisations, and appointed representatives.
The ratings firm said its outlook is a forward-looking, independent and objective non-credit opinion indicative of a DUAE’s relative ability to perform services on behalf of its insurance partners.
The DUAE update follows new that AM Best has also maintained its positive market segment outlook for the global reinsurance segment, itself considerably invested in the MGA business, as well as providing reinsurance capacity for risk transfer.
For its positive reinsurance view, AM Best cited “robust underwriting returns and the potential for solid full-year 2024 results despite an active Atlantic hurricane season”.
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