Managing General Agents Seen Responding to Changing Demands, Scrutiny

As total premium in the delegated underwriting authority enterprises (DUAE) sector continues to increase, the capacity directed to the sector is becoming more selective, according to AM Best.

In a new Best's Market Segment Report, "Managing General Agents Adapt to Changing Demands and Added Scrutiny," AM Best said that capacity directed to the DUAE sector is increasingly focused on long-term underwriting quality and greater stability on loss ratios rather than growth.

According to the AM Best report, 2025 was the fifth consecutive year of direct premium growth for managing general agents and their counterparts in the overall DUAE segment. Citing data from the National Association of Insurance Commissioners, the AM Best report said that total premiums sourced from DUAEs reached $108.7 billion in 2025, up from $92.3 billion a year earlier.

The report notes that while DUAEs have played an essential role in generating premium growth and developing coverage solutions, the sector is facing developing headwinds.

"It's not limited to capacity producers being more selective," David Blades, associate director at AM Best, said in a statement. "There is also a sense of heightened oversight that is becoming a more intentional focus of insurers seeking long-term success over short-term market share expansion. Additionally, tighter economics in renewal negotiations are presenting difficult challenges."

AM Best said it maintains a stable outlook for the DUAE market segment, reflecting its important role as a market for insurers and reinsurers that continues to demonstrate growth and resilience. Capacity for the DUAE segment has been supported by growth in the excess and surplus (E&S) lines market business, AM Best said, though E&S premium growth has been moderating over the past 12 to 18 months.

The rating agency said that it expects that, going forward, surplus lines insurers will offer more tempered growth opportunities as increased competition calls for the execution of more measured, opportunistic growth strategies.

Growth drivers for the DUAE segment, such as diverse capital sources and continued investment in talent and technology, will remain prevalent, AM Best said.

Copyright © 2026 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.