By Charlotte Koep, CEO, Root Platform
A recent report from Oxbow Partners caught my attention – and likely that of many in the market – due to its clear call to action: the future of Delegated Authority (DA) is digital. Coverholders must evolve into data-driven front ends for underwriters, enabling seamless interactions between brokers and capacity providers. Oxbow Partners’ latest report on DA and MGAs highlights a shift towards Application Programming Interface (API)-led reporting, replacing periodic bordereau submissions with continuous, dashboard-based monitoring. This transformation gives carriers real-time portfolio visibility, allowing for dynamic adjustments that improve loss ratios, reduce volatility, and cut operational costs. However, the industry is still in transition, with many MGAs reliant on legacy systems and fragmented data-sharing practices that create inefficiencies and compliance risks.
Beyond Distribution: A Fully Integrated MGA
What does this mean in practical terms? The MGA model has historically been valued for its agility and sector expertise, but in an increasingly interconnected market, technical integration is becoming a key differentiator. API-led MGAs are emerging as the next evolutionary step, leveraging seamless digital connectivity across underwriting, distribution, and claims management.
While API adoption in insurance has traditionally focused on streamlining distribution – such as embedding insurance products into partner ecosystems – modern implementations extend far beyond. Best-in-class MGAs are using APIs to integrate real-time risk analytics, parametric triggers, automated claims processing, and dynamic underwriting models. For instance, real-time risk data integration enables MGAs to refine risk selection dynamically, while parametric triggers facilitate instant claims settlements upon predefined event thresholds. These advancements, once exclusive to large insurers, are now accessible to API-enabled MGAs, levelling the playing field.
The Rise of the “Composable MGA”
API-driven MGAs operate within an adaptable ecosystem, allowing them to integrate new capacity providers, data sources, and compliance tools in real time. This “composable” approach delivers flexibility and provides a crucial competitive advantage: an MGA can incorporate geospatial risk analytics, switch claims processors, or adopt new regulatory reporting solutions without extensive system overhauls.
This adaptability is particularly relevant in response to regulatory developments. With evolving rules around Consumer Duty and fair value assessments, MGAs need to ensure compliance with minimal friction. API integrations enable automated compliance workflows, ensuring regulatory adherence without the need for cumbersome manual oversight. Traditional MGAs reliant on batch processing and static reporting will find it increasingly difficult to meet compliance expectations efficiently.
APIs vs Legacy Partnerships: A Defining Distinction
The contrast between API-first MGAs and those dependent on traditional integrations is stark. Legacy models typically involve batch data processing, slow onboarding, and fragmented system interactions. These inefficiencies lead to delayed product launches, manual interventions, and increased operational costs.
Conversely, API-driven MGAs operate in a near-instantaneous digital environment. New insurer capacity can be onboarded within days rather than months, and policy issuance, claims processing, and risk reporting occur in real time. The shift from static to dynamic integrations is redefining the market’s expectations of what constitutes a high-performing MGA.
Building In-House Technical Capabilities
To fully leverage APIs, MGAs must develop internal technical expertise. While many firms initially rely on third-party vendors for integrations, forward-thinking MGAs are increasingly investing in upskilling their teams in API development and low-code platforms, while working together with trusted partners where required.
At Root, we recognise that long-term success in the API-driven insurance landscape requires MGAs to take control of their technology stacks. Our Technical Certification Programme equips MGA product teams with the ability to independently build, deploy, and manage insurance products on our API-first platform, for instance. By reducing dependency on external developers, and upskilling their in-house developer talent, MGAs can confidently accelerate product innovation on high quality platforms like ours, as well as refine their underwriting models, and optimise claims workflows.
The Oxbow Partners report makes it clear: the market is moving decisively towards API-driven MGAs, and those that fail to adapt risk falling behind. Composable business models, automated compliance frameworks, and real-time integrations will define the next generation of MGAs.
