The traditional boundaries between MGAs, carriers and brokers are becoming increasingly difficult to define.
Insurers are launching MGA platforms. Brokers are establishing Lloyd's vehicles. MGAs are retaining underwriting risk through their own balance sheets and capital structures. Across the market, participants that once occupied distinct positions in the insurance value chain are moving towards the same centre ground.
For Chris Hardcastle (pictured), head of delegated authority at Miller, that convergence reflects a broader shift in how the market views delegated authority itself: less as a distribution mechanism and increasingly as a tool for deploying capital, underwriting expertise and capacity.
"There's much more convergence at the moment of participation in the delegated space," Hardcastle said. "It shows the flexibility and versatility of the model. All sides are gathering in the centre because they recognise that through the expertise that sits in good MGA underwriting, there's a real opportunity."
Hardcastle argued that delegated authority has always been more deeply embedded within the insurance market than many participants acknowledge. The change is not in the model itself, but in the range of ways it is now being applied.
"It's the deployment of the model rather than the model itself that's the evolving thing," he said. "If you look at the insurance market, it's all delegation at some level. Unless you're sitting on permanent capital, somebody somewhere is renting you capital and affording you the ability to underwrite on their behalf."
In Hardcastle's view, structures ranging from quota shares to Lloyd's consortiums reflect the same underlying principle: the flexible deployment of capital and underwriting authority.
That evolution is particularly evident within Lloyd's. "A consortium arrangement was once a nice to have," Hardcastle said, describing how consortium capacity now sits alongside retained capital and reinsurance as a routine component of syndicate planning.
Yet for all the enthusiasm surrounding delegated authority, Hardcastle returned repeatedly to a more familiar insurance question: what happens when market conditions deteriorate?
Capacity remains available and underwriting performance strong. The risk, Hardcastle suggested, is that favourable conditions are mistaken for evidence that every business model is fundamentally sound.
"The key thing that goes wrong is the ability to stress-test the model across the cycle," he said. "Is it a hard market play, a soft market play, or something that's going to be valuable throughout? That often gets overlooked."
The industry has faced that reckoning before. Hardcastle pointed to the period around 2018 and 2019, when delegated authority losses contributed to the disappearance of several Lloyd's syndicates and insurance carriers. Businesses that today can secure capacity with relative ease faced a far more sceptical market when underwriting performance came under pressure.
Invoking Warren Buffett's well-known observation, Hardcastle warned: "When the tide goes out, you can see who's swimming naked. What we need to do is remember that and think seriously about our tolerance for market softening, because it will cause damage if we just follow rates into a place where business is no longer making money."
The distinction matters particularly for MGAs. Unlike diversified carriers, they ultimately depend on demonstrating underwriting profitability through both favourable and unfavourable phases of the cycle.
As rates continue to moderate, Hardcastle expects that test to become increasingly visible over the next 18 to 24 months.
The convergence taking place today is also reshaping expectations about where delegated authority businesses can go next.
Hardcastle expects more MGAs to combine third-party capacity with their own risk-bearing capital, creating structures that align underwriting decisions more closely with financial outcomes. He was careful, however, not to present risk participation as an inevitable destination, noting that many successful MGAs continue to operate without retaining underwriting risk.
"People are now thinking more about partial use rather than whole use," Hardcastle said, pointing to growing flexibility in how firms deploy delegated authority across products, geographies and phases of the underwriting cycle.
He argued that the tools to navigate a softening market are better than they have ever been. Improvements in data and the application of AI give firms more precision in managing their underwriting strategies through the cycle. The challenge, in his view, is not access to those tools but whether they can be translated into demonstrable underwriting profitability. "All the tools are there to do it," he said. "But at the end of the day, if that can translate into numbers, fantastic. If it can't, I think that's when things become challenging."
The significance of today's convergence may only become clear when market conditions become less accommodating. As delegated authority becomes more deeply embedded across the insurance value chain, the question may become less about who can access capital and more about who can justify it.
