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Your Friday Five

Every Friday we distill 200+ insurance, legal, and market-risk articles into three signals your board may need for its Monday briefing.

Three developments caught our attention this week:

• Specialty MGAs now control the innovation pipeline for niche risks. Their $22 billion in premium drives the market, though carrier relationships require strategic evaluation.
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• Premium increases hit their lowest point since 2017, signaling buyer leverage.
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• Why the LION manuscript Lloyd’s program is better for MGAs, regional and mutual insurers and insurtechs.

The State of Insurtech MGAs

Summary

ReSource Pro and InsurTechNY surveyed 50 insurtech MGAs, revealing how the sector actually operates.

This report analyzes the innovative and growing insurtech MGA space, detailing their business models, capital strategies, and significant impact on the P&C industry. Insurtech MGAs are heavily focused on product development, with 80% creating their own programs, and 53% have surprisingly custom-built their own policy administration systems.

While 74% are PE/VC-backed, a critical 55% face a "single point of failure" by relying on just one capacity provider.

The report concludes that the primary challenge for these firms is not securing capital or tech, but rather solving the fundamental problems of sales and distribution.

(source: ReSourcePro/InsurTechNY Research)

So what?

We agree w them, them MGA space is where the real P&C innovation is.

Forget digital agencies; 80% of these insurtech MGAs are developing their own product, and 18% are even taking on actual balance sheet risk. Their GTM breakdown is what you'd expect: 34% are "digital native" (read: automation plays), 30% are traditional mono-line/segment specialists, and 22% are chasing the embedded and parametric buzz.

Don't buy the "capital-light" narrative; 74% are PE/VC-backed, which the data shows is the only real path to GWP scale.

The real chokepoint, as always, is capacity. The report validates the industry's soft spot: 55% of these startups have a single point of failure, relying on just one carrier relationship.

As one exec bluntly put it, "If you don't have capacity, you don't have a company". The pressure from paper is real, too - they want $5M in GWP, and 54% are hitting that mark within two years.

The most surprising data is on the tech stack: 53% are custom-building their own PAS.

It's a total throwback, bucking the carrier trend of moving to vendor systems and proving how non-standard their programs are. But the report's main conclusion is blunt: the barrier to entry isn't capital, capacity, or tech—all that is available. The real challenge is distribution.

These MGAs are just struggling with the classic grind: attracting agent/broker partners and building a brand that actually gets them flow.

Aren’t we all, though!

The Market Softens for Buyers Who Know Where to Look

Summary

Commercial insurance premiums increased just 4.2% this quarter. The lowest since 2021.

The opportunity lies in the details: Cyber dropped 2.1%. D&O fell 1.6%. Workers comp decreased 2.6%. Commercial property moderated to 2.9%, down from 6.0%.

But casualty lines tell a different story. Commercial auto climbed 10.4%. Umbrella rose 9.5%. Third-party litigation funding and nuclear verdicts continue driving severity in these lines while others soften.

(source: Deloitte/CIAB)

The LION Lens

What happened - Premium increases averaged 4.2% in Q1 2025, with cyber and D&O showing actual decreases while casualty lines continued double-digit increases (source: Deloitte/CIAB).

Why it matters - The market isn't uniformly softening. Buyers treating renewal as a single negotiation miss line-specific opportunities.

Practical implications - Separate renewal strategies by line. Lock in multi-year deals where markets soften. Shore up casualty coverage before capacity tightens further.

So what?

This market rewards sophisticated buyers who move decisively.

Financial institutions with D&O renewals should demand broader Side A coverage while capacity returns. But casualty-heavy programs need different tactics - securing capacity matters more than price.

We're seeing institutions secure rate decreases with enhanced coverage - sublimit increases, co-insurance elimination, waiting period reductions. But these concessions disappear when the market turns.

D&O for Financial Institutions presents a particular opportunity.

Capacity returns as carriers compete for quality accounts. Push beyond rate to structure: broader Side A definitions, non-rescindable coverage, priority payments provisions. Request manuscript amendments for AI governance claims - coverage carriers will add now but exclude later.

The January renewals already show tightening.

The LION POV

Here's how we're advising clients:

• Attack renewals line by line. Create separate strategies for softening professional lines versus hardening casualty. One-size-fits-all approaches leave money and coverage on the table.
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• Document your leverage. Carriers compete aggressively in cyber and D&O. Use competing quotes to push for manuscript improvements beyond just rate.
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• Move early on casualty. With auto and umbrella still climbing, securing adequate limits matters more than premium savings. Capacity will tighten before rates moderate.

The window for advantageous positioning varies by line. Cyber and D&O offer immediate opportunities. Casualty requires defensive positioning.

The LION program for Insurers and MGAs

From 200-Page Nightmares to 40-Page Clarity

Traditional insurance policies run 150-200 pages. Endless endorsements. Constant cross-referencing.

We reviewed over 20 insurance company forms from London and the US. Every one buried critical coverage gaps in legal complexity. So we did something unusual—we wrote our own. Four iterations. Attorney reviews from London and US specialists. Carrier underwriters, claims professionals, brokers, side counsel, and outside counsel all weighed in.

The result? A single manuscript policy-form. No endorsements. Just 40 pages total. And Lloyd's of London backed it.

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>>>Watch the video breakdown here

Clarity Shouldn't Be Revolutionary

Most policies force you to flip between the master policy, endorsement A, exclusion B, and amendment C just to understand one scenario.

Our manuscript integrates everything into one document. General terms. D&O. E&O. EPLI. Fiduciary. Same place.

The structure is logical: one section for general terms, one coverage section per line. You read linearly—beginning to end—and know exactly what you have.

But readability is just the foundation.

It Dovetails With Reinsurance By Design

Most policies treat reinsurance and primary coverage as separate universes. Ours dovetails seamlessly—reinsurance can sit primary, and our form sits excess. Then it drops down for TPAs, MGAs, co-insurance arrangements or vice versa. You choose.

The flexibility is surgical.

A regional insurer can structure their E&O with reinsurance handling predictable claims.

Our Lloyd's form catches exposures many insurers often miss or intentionally exclude. It provides very simple, clear coverage for when it should respond. No guessing, just clear language. You're using it for what Lloyd's does best—complex, high-stakes coverage.

This structure only works because of trust. Lloyd's syndicates give us this flexibility because we've spent two decades proving how we report claims, educate clients, and structure risks.

That relationship capital bought structural innovation.

We Cover What You Actually Do

Traditional policies define what you do. Then exclude half of it.

We went the opposite direction. Broad professional services definition—the widest possible interpretation of what financial institutions actually do. Then we carved back exclusions specifically for insurance company operations. Not generic exclusions. Carve-backs very specific to their business.

The result: coverage protecting how insurance companies actually operate. It's written for the business you're running, not the business generic policies assume you run.

Even the notice provision is different—claims made, not claims made and reported. Lloyd's trusts how we manage the reporting process. That distinction can mean the difference between coverage and denial when timing gets complicated. Which matters most when claims hit.

What Two Decades Built

We've been trading with the Lloyd's underwriters and syndicates for over 20 years.

Going beyond placing placing coverage—handling countless claims. The performance hasn't always gone easy. But we know how they're going to trade. We know where we're going to get to. And it's fair.

These are seasoned, proven financial institution underwriters who understand the nuances of how we trade and focus on relationships. We've been through claim scenarios with multiple underwriters. We know how they'll handle clients during a claim—which is almost the most important aspect.

Nine syndicates. Two to three serve as primary lead carriers with up to ten million in capacity—probably structured as primary and excess that might be full limits depending on appetite.

Then there's substantial US capacity above that. Up to $200-300 million depending on what we want to build.

The Structure Advantage

Historically, you'd have your local agent or broker, a wholesaler in the US, then a wholesaler in the UK. Four or five people in the mix before you reached Lloyd's.

We've set up a line slip with one UK wholesaler. Now you've got the traditional retailer in the US and the wholesaler into Lloyd's. That's it.

This reduces friction. More importantly, it makes sure the coverage is exactly how it should be.

What This Unlocks

Still 40 pages. Still everything included.

But behind those pages sits something unreplicable: relationships forged through market cycles, tested by complex claims, and proven when it mattered most.

For regional and mutual insurers, this unlocks capacity they couldn't otherwise access. Professional coverage that can serve as their entire program or scale to $200-300 million with US markets stacked above.

The manuscript is the tool. The relationships are the weapon.

And after two decades? We know exactly how to use both.

Want your D&O or E&O program reviewed against our manuscript standard? ​ Book a live policy comparison here.

We'll show you exactly where your current form falls short and what our Lloyd's-backed manuscript delivers instead..

The Bottom Line

Between MGA-driven innovation, bifurcated market pricing, and the gap between standard carrier forms and our Lloyd's-backed manuscript, institutional insurance demands systematic sophistication.

If you're a director or officer at one of these FIs, these dynamics directly impact your institution's protection and your personal exposure.

That's why we created the D&O Contract Vigilance Blueprint. It's a 5-day email course to help you:

• Secure better D&O insurance: Learn how to avoid common policy mistakes

• Protect your personal assets: Understand your potential liability

>>>Get the D&O Contract Vigilance Blueprint

Don't wait until a claim hits to find out your institution is under-protected.

Thank you for reading today's edition!

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Stay Covered,

Natasha & Mark

Co-Founders and Managing Partners

LION Specialty

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