By David Bull

May 9 - (The Insurer) - There has been a significant shift in the line-up of top 10 reinsurers supporting U.S. MGA and programs business, as industry giants Swiss Re and Munich Re have cut back their participation and companies such as Topsail Re and ICW have moved up the rankings, according to research from Gallagher Re.

In its latest report on the fast-growing sector, the reinsurance broker addressed what it described as a “mature MGA market,” with rising premiums and shifting risks, that is entering a new era.

Overall it noted that MGAs have emerged as “one of the most dynamic areas” of the P&C insurance market, with premium for the segment reaching nearly $100 billion last year, including those not reported under National Association of Insurance Commissioners Note 19.

The increase meant that business written by MGAs now accounts for almost 10% of the total premium volume of the U.S. P&C sector.

“While premium growth slowed from the +50% seen in 2021-2022, it remained strong at +26%, signaling a shift from early expansion to a more mature phase of development,” said the report.

The report highlighted the growing role of the fronting market in the MGA sector, writing nearly $28 billion.

While State National took the lead position, accounting for $4 billion of that premium volume, the core hybrid fronting composite – which omits State National, Falls Lake, Fortegra and Core because of other direct business – increased from $10 billion of gross premium written in 2022 to $17.6 billion in 2024.

After that “staggering” 70% increase, growth momentum is expected to continue into the next several years, albeit at a more modest pace, said Gallagher Re.

MS Transverse was the fastest-growing fronting carrier last year as it expanded by $1.1 billion, followed by State National at $870 million, and Accelerant and Sutton at $600 million, the report said.

It added: “Reinsurance and third party capital remain critical to supporting MGA growth, with many carriers expanding use of captives, ILS, and corporate quota shares.”

And the intermediary noted the changing nature of reinsurance relationships. This has included greater use of sidecars and ILS partnerships to open up additional sources of capital.

“Additionally, some fronting carriers have explored corporate quota shares, covering multiple MGA programs, to align interests and rebalance gross to net premium ratios.

“While the reinsurance market has improved in 2025, recent public statements suggest many carriers, and therefore their MGAs, have increased their reliance on captives and/or affiliated reinsurance since 2022,” the report continued.

It noted that hybrid front carriers have an elevated dependency on reinsurance, typically retaining 5% to 10% across all lines.

“As the reinsurance market has become more competitive, some traditional balance sheet reinsurers have been replaced by lower-rated reinsurers and non-traditional capacity such as captives, ILS, and collateralized reinsurance,” said Gallagher Re.

“This trend has accelerated due to historically large balance sheet reinsurers like Munich Re and Swiss Re reducing their participation in the MGA marketplace by over 50% in 2024,” it observed.

The data compiled by Gallagher Re showed that Lloyd’s has taken over the top spot as the largest reinsurer for the program underwriter composite, with $1.1 billion of premiums. Topsail Re has moved from 8th position in 2022 to 4th in 2024, while ICW has gone from 23rd to 9th over that period.

Tesla’s captive reinsurer remains in 5th position with its sizable relationship with State National, the report noted.

It added that Swiss Re’s participation has dropped from $734 million in premium 2022 when it was the top ranked reinsurer, to falling out of the top 10, with $389 million of premium. Munich Re has cut back from $462 million to $294 million, dropping it in the rankings from 4th to 16th.