Managing general agents (MGAs) offer insurers competitive prices, which can put downward pressure on premiums, while also helping insurance companies access new markets and diversify risks, Specialty MGA Africa and Middle East’s Mr Youssef Fassi Fihri said. At the same time, he said that MGAs provide global reinsurers an efficient, low-risk method for accessing the Middle Eastern market.

As managing general agents (MGAs) “act as an extension of the insurer”, they can provide underwriting services and policy administration, Specialty MGA Africa and Middle East CEO Youssef Fassi Fihri told Middle East Insurance Review. In comparison, he said that brokers act on behalf of clients to negotiate the best insurance policies.

He said, “MGAs can therefore assess the quality of the risk and premium on behalf of their binder, while brokers advise their clients on how to achieve optimum protection.”

He also noted that while brokers presently dominate the market in the Middle East, MGAs are on the rise, particularly within niche sectors and takaful.

According to the Dubai International Financial Centre (DIFC), over the years, reinsurers increasingly participated in the creation of MGAs, resulting in agencies accounting for 43% of (re) insurance players in 2023.

Said Mr Fassi Fihri, “Many MGAs based at the DIFC are increasingly successful at dealing in cross-border risks, as DIFC’s passporting arrangements allow them to underwrite risks across the Middle
East.”

Trends and prospects

Over the past years, regulators such as the Dubai Financial Services Authority (DFSA) and Saudi Central Bank (SAMA) have been introducing frameworks to facilitate and govern MGAS, increasing licences and ensuring better compliance, Mr Fassi Fihri noted.

For instance, Rokstone Dubai, an MGA, had to first secure a regulatory licence from the DFSA before opening for business.

“MGAs in the region have (also) been enhancing their relationships with global reinsurers to maximise capacity,” he said.

“Lloyd’s of London for example, have been actively engaging with Middle Eastern MGAs, highlighting the growing global confidence in the region.”

With consumers and businesses increasingly demanding shariah-compliant insurance products, takaful is seeing rapid growth in the region as well, he noted. As countries such as Saudi Arabia, UAE and Bahrain are expanding in this segment, MGAs are also playing an essential role in distributing these products, he said.

“Regulatory bodies such as SAMA and the UAE Insurance Authority are providing incentives for takaful expansion, and MGAs have been introducing hybrid models, combining traditional insurance and takaful, to accommodate different customer needs,” he said.

Successful business models

“The most successful MGAs will combine deep regional expertise with access to global reinsurance capacity,” Mr Fassi Fihri said in response to a question on what some of the most effective business models among MGAs in the Middle East were.

He said, “Both are necessary if MGAs want to underwrite large and complex risks, which require localised knowledge and high-security-rated capacity.”

For instance, he noted underwriters with Specialty MGA Africa and Middle East were based in Casablanca and Dubai, in addition to London, and knew their local markets well. At the same time, he pointed out that the
underwriters also had support from the wider international team.

Opportunities and challenges

When asked what some challenges MGAs in the Middle East faced, Mr Fassi Fihri said, “Consumers in the Middle East continuously expect to have quicker solutions and seamless digital experiences. To develop these capabilities, MGAs must invest significantly in their technology and infrastructure, which may be a challenge for many given their limited capital.”

On the flip side, he noted that governments in the region are supporting InsurTech adoption by investing in start-ups in the sector and providing incentives for innovation.

He said that this gives “opportunities for MGAs to partner with InsurTech businesses to enhance their digital capabilities and offer this to customers.”

Working with (re)insurers

According to Mr Fassi Fihri, “the traditional insurance industry has already started to react to the growth of MGAs, which can be very competitive on price and put a downward pressure on premiums”.

He said, “Many insurers are allocating growing shares of their capacity to MGA partnerships, which can help them access new markets and diversify their risk.”

In the long term, he expects MGAs to lead in “niche, underserved markets, with larger, more established reinsurers providing balance sheet support” as well.

This is because he believes MGAs offer global reinsurers an efficient, low-risk method for accessing the Middle Eastern market.

“They make excellent partners as they are agile and innovative, introducing new ways of working and reducing claims settlement times,” he said, noting MGAs often acted as bridges between carriers looking to diversify and businesses whose risk profiles could not be supported by domestic insurance markets alone.

The future

When asked what trends and prospects he could foresee among MGAs in the Middle East over the coming year, he said that he expected agencies to focus on tools like parametrics.

“The floods in Dubai last year showed that significant coverage gaps remain, and parametrics are perfect for covering this kind of risk, and for making claims more efficient,” he said, also noting that his company has had
success with similar products.

Said Mr Fassi Fihri, “I expect parametric solutions will only grow in popularity and be a part of the development of national coverage against CAT risks to improve resilience.”

This article first appeared in the April 2025 edition of the Middle East Insurance Review