By Mark Elliott, Chief Executive Officer, Polo Insurance Managers

10th December 2025

MGAs have never been more successful; but they’ve also never had more to lose.

We’ve seen writing record levels of premium, launching new syndicates, and attracting private equity. However, for all this growth, they remain fundamentally reliant on others to carry the risk.

From my perspective, that model is now showing signs of strain. As reinsurers grow more selective, and carriers recalibrate appetites, MGAs are feeling the pinch. Many are asking a hard but important question: can we take on some of the risk ourselves?

It’s a question more MGAs should be exploring.

The capacity gap is real. It’s growing and becoming harder to secure, especially for new entrants or niche portfolios.

Even successful MGAs are finding they need to work harder to prove their value to carriers. The bar has risen on data, governance, and alignment. Add in inflation, climate volatility, and heightened loss activity, and it’s no surprise some carriers are reducing exposure.

Now I don’t think the MGA model is broken, far from it. I believe the MGA/carrier relationship needs rebalancing, and that starts with how risk is shared.

Retaining risk is a mark of maturity and I’m seeing more MGAs exploring whether they can retain a portion of their own risk through a captive or protected cell.

It’s not about becoming a full-fledged insurer. It’s about demonstrating commitment to underwriting performance. Creating alignment with capital providers, and in some cases, unlocking more favourable terms or programme stability.

This approach isn’t new, it’s common in the US, particularly among MGUs and programme administrators. Although it is beginning to change, it is still relatively rare in the UK and European markets.

So, what does retention look like in practice? Well, it isn’t just a financial decision, it should also be a strategic one.

In Guernsey, we’re increasingly supporting MGA-led cells that write a modest share of risk alongside traditional capacity. These structures give flexibility, credibility, and a clearer view of performance. They also create optionality if market conditions shift.

Some MGAs are using this route to strengthen long-term partnerships with reinsurers. Others are doing it to test appetite for launching their own carrier in future.

I know not all MGAs are ready to retain risk, however those that are, and able to back themselves, stand out quickly.

When I speak to MGA leaders, I usually ask variations of these questions:

• What percentage of our portfolio are we confident enough to back?
• Could risk retention improve our conversations with capacity providers?
• Do we have the governance in place to manage a risk-bearing entity?
• What are the long-term implications for control, margins, and value?

This isn’t a step to take lightly. It requires clear business rationale, board alignment, and the right infrastructure. But for growing MGAs that want to shape their own destiny, risk retention may be the most strategic move they can make.

The MGA model was built on flexibility, speed, and specialisation. Retaining risk doesn’t undermine that. Done right, it enhances it.

As the market shifts, capital strategy has to shift with it. The MGAs that think like carriers, without trying to become one too soon, may find they’re better placed to thrive in the next phase of growth.