By Chris Munro

July 21 - (The Insurer) - WR Berkley $(WRB)$ president and CEO Robert Berkley has cautioned on a “mismatch” in interests between delegated authority platforms and capital providers as he revealed the carrier has recently received “a startling number” of calls from investment bankers selling MGAs.

Addressing analysts on Monday evening to discuss WRB’s second quarter 2025 earnings, Berkley highlighted the influence MGAs are having on some of the markets in which his company operates.

Berkley said competition in property insurance broadly has increased, “probably” due to two drivers, one of which is the reinsurance marketplace becoming more competitive and providing capacity at a lower rate, and the other is MGAs which are “becoming clearly more active”.

Commercial transportation is another product line “where there is a fair amount of activity coming from MGAs”, Berkley said.

While WRB and other carriers “seem to be pushing for rate” in that segment, Berkley said “without a doubt, the MGA participants are creating at least a short-term headwind for that market truly going hard."

“My expectation is that's a bit of a kink in the hose, if you will, and consequently, it is going to build up pressure and ultimately, will inure to the benefit of responsible long-term participants when that snaps and the market shifts,” Berkley said.

Heightened competition in the miscellaneous professional liability segment also has “an MGA component to it," the executive added.

Against that backdrop of heightened competition generated in part by MGAs, Berkley questioned the delegated authority market’s business strategy.

“There is no doubt that inherently in many of the delegated authority models there is a mismatch or a lack of alignment of interest between those with the pen and those with the capital,” he stated.

“It is not that all of these relationships are bad. Some of them are quite good. One just needs to have their eyes wide open and understand that it is not a perfect alignment of interest and make sure that it is controlled appropriately,” Berkley stated.

The executive noted “there has been extraordinary growth in the MGA space”, much of which has been driven “by new entrants that lack expertise."

“A lot of it has been supported by reinsurance capacity that seems to have an unquenchable thirst for growth without necessarily their finger fully on the pulse,” Berkley added.

“We'll have to see how this plays out. I think for many of us that have been around for at least a little while, and particularly those that have been around for a long while, have seen some version of this movie.

“In some ways, it's the same, and other ways, it's different. Perhaps the only difference is that it's a different cast of characters,” Berkley added.

Speaking to the analysts, Berkely also revealed WRB has over the last 60 to 90 days received “a startling number of inbound calls” from investment bankers selling MGAs asking whether the carrier has interest in buying them.

Typically, Berkley said, those MGAs are capitalized or owned by private equity. And the executive suggested that such a high volume of calls coming through might mean “that the music is slowing” regarding the MGA market’s recent rapid growth.

When it comes to those potential MGA acquisitions, Berkley said WRB will “evaluate every opportunity…on its own merit”.

“That having been said, we take the expertise and the responsibility to capital…very seriously. So while we're always open to conversations, it's a pretty high hurdle to truly get us to want to engage," he said.