Softening conditions in parts of the insurance market are beginning to draw new entrants, but the environment they are entering is more demanding than previous cycles. Interest may be rising, yet the threshold for success has shifted. Execution, rather than timing, is becoming a more important differentiator, according to Gemma Grainger (pictured), head of business development for insurance services at Davies.
“Only really disciplined businesses are going to have a clear edge in terms of delivery,” she said, pointing to a market that is no longer uniform in its opportunities.
Improving conditions in parts of the market are beginning to create space for new ventures, particularly where capacity has returned and competition is increasing. Financial lines and property have seen renewed activity, while casualty and liability classes continue to face structural pressures, including the impact of social inflation.
“I think you have to acknowledge it’s not one market at the moment as well,” Grainger said. Variations by geography and line mean opportunities are developing unevenly, with some areas inviting new entrants while others remain more constrained.
That fragmentation makes timing a less reliable guide. “Not every new entrant is going to be successful,” she said. “It’s not necessarily about timing either.”
Instead, the differentiator is more structural. Success depends on underwriting discipline and access to aligned, long-term capital, rather than simply entering the market at the right point in the cycle.
Capital has not retreated, but it has become more selective. Investors and capacity providers are placing greater emphasis on profitability, resilience and execution, reflecting both regulatory scrutiny and recent market experience.
“It’s moved away recently to a more resilience, profitability and execution play, as opposed to a growth or a volume play,” Grainger said.
This shift has raised expectations for new ventures. Propositions are now expected to demonstrate substance as well as ambition. “You need a clear picture in terms of what gives you that edge and what’s going to be compelling for capacity providers and investors,” she said.
That extends beyond product innovation. Investors are looking closely at distribution strategy, underwriting discipline and leadership track record, as well as how reinsurance, pricing frameworks and operational models align with growth plans.
“It’s all well and good making or building a business plan around utilising AI, but is that demonstrable?” Grainger said, reflecting a wider move away from theory-led propositions toward those that can evidence delivery, particularly in claims and customer outcomes.
Technology remains important, but only when tied to tangible outcomes and embedded within a robust governance framework. “It’s no longer enough on its own,” she said. “Investors and regulators are wanting more.”
The same scrutiny applies as businesses look to scale. Early expansion without a clear understanding of underlying economics can quickly expose weaknesses in underwriting or operational design.
“What we would tend to see with new propositions and new entrants is a multi-line platform,” Grainger said. While ambitious, that approach can outpace the expertise and infrastructure available at launch, requiring a more phased strategy in practice.
Alongside the UK, Europe is emerging as a key area of focus for expansion and new entrants. Growth potential in underpenetrated markets continues to attract attention, particularly as specialist underwriting becomes more relevant.
“Europe isn’t simple, but it’s highly rewarding if you get it right and you can engage with its complexity,” Grainger said.
For MGAs and expanding businesses, the challenge lies in navigating multi-jurisdictional regulatory frameworks while maintaining operational consistency. As in the UK, governance and operating-model sophistication are becoming the defining differentiators.
“If a proposition is strategy-led, data-led, governance-led, they are going to win regardless of what stage in the market or cycle we are in,” Grainger said.
Survival depends on underwriting discipline and aligned long-term capital, rather than simply entering the market at the right point in the cycle, a distinction that is becoming more pronounced as conditions diverge.
