Driving a Surge in MGA Deal Sourcing Amid Shifting Valuations

Everywhere you turn, the insurance market is in motion with dealflow. The Managing General Agents (MGA) segment, in particular, has become an attractive target, exerting an ever-growing influence on the broader insurance space, fueled by surging MGA deal sourcing activity from private investors.

MGAs emerge on the scene as specialized intermediaries in the insurance ecosystem. They are trusted by insurance carriers to handle critical tasks along the insurance value chain, including underwriting, policy issuance, premium collection and claims adjustment. Here’s the key: they do it without shouldering the actual risk themselves. MGAs take the lead in the underwriting and distribution stages, carrying out these tasks with authority delegated by insurers while harnessing the carriers’ licenses, balance sheets and reinsurance networks to expand more speedily and nimbly, delivering superior speed to market for innovative coverage solutions.

MGAs have managed to bridge major gaps in the insurance distribution chain by leveraging expertise in specific niches to build and distribute tailored insurance products. In turn, this helps insurance carriers to access hard-to-reach markets more efficiently, particularly for emerging risks. For example, these areas include high-stakes market segments like cyber threats, where this type of insurance market is projected to balloon from about $6 billion in premiums to more than $20 billion within the next five years, according to McKinsey. 

The MGA model offers several benefits, not least including cost savings for insurers, expanded market reach and the potential for greater innovation in specialty lines like non-standard auto or cyber risks. By combining traditional carriers with emerging opportunities, MGAs have evolved from niche players to important engines of efficiency and growth in the P&C landscape. 

In fact, among the top 100 U.S. P&C insurers, close to half (43%), including seven of the top 10, have at least one MGA relationship through which to source new premiums. Many of these rely on MGAs in hybrid models, where the agents handle 25–75% of overall premiums alongside in-house efforts, according to McKinsey. This dynamic highlights their pivotal influence, seamlessly connecting brokers with carriers in a more agile way, informed by industry insights on data-driven underwriting authority and general agents’ role in the ecosystem.

Other reports support this industry shift. According to a recent report by Gallagher Re, the MGA market now commands close to 10% of the P&C segment, with market premiums soaring to nearly $100 billion in 2024. Meanwhile, fronting carriers are increasingly leveraging their capabilities, including licenses, balance sheets and access to the reinsurer market, paving the way for MGA expansion.

Perhaps there is no greater evidence of the MGA market’s evolution than witnessing private equity and venture capital backers complete their cycle of investment through successful exits, including IPOs; MGA deal sourcing has intensified as a result. One company, non-standard auto MGA Pearl Holding Group specializing in the Florida auto market, is reportedly exploring a sale right now. 

Just over a decade ago, Pearl Holding was acquired by Huntsman Gay Global Capital (HGGC), a middle-market-focused private equity firm, and has remained in its portfolio until today. At the time of that deal, Pearl controlled over $100 million in net premiums across tens of thousands of policyholders. While its current valuation remains unclear, mounting signs suggest that the market conditions are ripe for MGA deals, including a return to the public markets – all part of a broader wave of MGA deal sourcing. 

In June 2025, Slide Insurance Holdings, parent company of Slide Insurance MGA, filed an S-1 registration with the U.S. SEC to go public in an initial public offering (IPO). The markets embraced Slide, with the company securing a valuation exceeding $2.6 billion, easily becoming the insurance industry’s biggest new issue of the year. Slide had reportedly deployed the $100 million in capital it had raised in a Series A round in 2021, a funding round led by prominent investors like Gries Investment Funds and Tampa Bay Ventures.

Slide, categorized as an insurtech, priced its IPO shares at the top end of the range at $17 per share. However, market demand pushed the stock even higher; new shares began trading at $21 per share. With a successful market debut like Slide’s, including its impressive valuation, the market could witness a new wave of insurance and insure-tech plays lining up for their slice of the public markets pie.

In another sign of a maturing market, NSM Insurance Group, a prominent MGA platform and portfolio company of PE giant Carlyle, in early 2025 inked a deal to sell its U.S. commercial insurance division to New Mountain Capital, yet another major private equity player with over $55 billion in AUM. This deal represents a textbook example of private equity’s investment lifecycle.

Over the past three years, Carlyle supported NSM’s growth through operational improvements, strategic M&A and targeted investments. The deal, comprising NSM’s portfolio of 15 niche insurance programs, including P&C, allows Carlyle to capture value from its investment. For New Mountain Capital, the acquisition signals a continued appetite for well-established MGA platforms among selective PE firms, highlighting the allure of these specialized underwriting businesses in the current market, as well as the healthy valuations they can achieve for their backers.

With MGAs poised at the cusp of their next cycle of growth, valuations have been thrust into the spotlight in an investment landscape that has forged a wide spectrum of multiples for MGA acquisition targets.

MGA Financial Profile 

The financial profile of MGAs reveals a sector that’s not just surviving but thriving with growing momentum and scalable economics that keep investor interest piqued. In 2024, U.S. MGAs racked up direct premiums written of $114.1 billion, surging 16% year-over-year and outpacing the performance of the wider P&C market, according to a recent study by Conning. 

On a global scale, the MGA arena pulled in about $29.25 billion in revenue, according to Insuramore’s 2024 Global MGA/Managing General Underwriter (MGU) Research, propelled by a 26% growth rate owing to a deepening talent pool, technology upgrades and stronger ties with fronting carriers. Their secret sauce involves a commission-driven model earning 10-20% of premiums, plus fees for niche expertise, while running leaner operations that bypass the hefty overhead of full-fledged insurers, according to an industry analysis by McKinsey & Company.

For 2025, the outlook remains promising, with double-digit premium growth on the horizon amid booming demand for tailored coverages in cyber and excess & surplus lines, according to Conning’s estimates. Insurance giants like Brown & Brown and Ryan Specialty Group are leading the charge, boasting two-year revenue CAGRs in the double-digit percentage range, while fresh private equity cash demonstrates the sector’s attractive high-margins. 

Of course, challenges persist, including limits on carrier capacity, where reinsurers are growing more cautious and fronting carriers are choosier about their partners, making it tougher for MGAs to approve new policies and grow their operations. Additionally, fluctuating P&C loss ratios, fueled by surging claims frequency and severity in lines like liability, have pushed carrier profitability to the brink, according to Fitch Ratings. 

If left unchecked, these issues could lead to risky decisions or slowed expansion. But with the advantage of data-driven underwriting, MGAs appear to be well-equipped to navigate through them. 

The MGA Valuation Sphere

On one side of this valuation sphere, some MGAs reportedly became overvalued in the not-too-distant past, a situation attributed to an influx of “non-smart money” entering the space, according to a recent “Age of the MGA” webcast. This created a cycle of cautious uncertainty in the MGA segment for a while, leading many traditional venture capital investors to remain sidelined. 

Indeed, as expert panelists noted, some VC backers have since withdrawn from the MGA market, with even the largest of firms holding only a tiny fraction of their portfolios in insurtech. They suggested that MGAs might find more favorable reception from strategically aligned investors, such as reinsurers with dedicated venture groups, or firms already possessing MGAs in their portfolios.

In the webcast, David Gritz, co-founder of Insurtech New York, described the exit landscape for MGAs as “great,” but there’s a catch. For an MGA to command an attractive exit valuation, it generally needs to reach a certain threshold: typically operating at break-even or with positive EBITDA, and achieving a scale of around $25 million-$50 million in gross written premium (GWP). Smaller MGAs, perhaps in the $5 million-$25 million premium range, are often seen as candidates for “aqua-hire” type acquisitions, or carve outs of entire teams of talent, the expert panelists shared.

Gritz added that context is key, citing an instance where a startup with $1 million in GWP is selling and will likely fetch a high multiple (4-7x book value) due to an exceptionally low and attractive loss ratio of 5% over three years. This scenario demonstrates the influence of a strong or improving performance, as is unfolding in Florida P&C of late, and how it can offset scale alone in valuation metrics.

While some corners of the market have expressed a bit of caution, the general vibe within the MGA sector is that valuations are not overblown. In fact, many market participants highlight that the multiples MGAs are pulling in are still “extremely attractive.” This compelling setup for valuations has actually caused top talent to evolve alongside this market, pushing smart individuals into the fronting space, still within the broader MGA ecosystem but where they’re lured by big opportunities to also build greater value.

MGA Engine

The MGA market has clearly evolved from a niche to a deeply integrated and dynamic engine of the insurance sector. Propelled by coveted private equity and venture capital, these specialized agencies are proving their value through consistent growth, strategic innovation and attractive valuations. While the path to liquidity can look different — from PE-to-PE sales to the dawn of the IPO — the overarching trend points to a robust future where MGAs continue to influence how insurance products are built, distributed and even underwritten.