In today’s insurance market, capacity is shifting, and with it, new models are emerging. As traditional insurers retreat from volatile and emerging risks, hybrid fronting carriers are stepping up as essential players—particularly for MGAs looking to launch specialist programmes quickly. According to Novidea, these carriers offer a unique solution to the growing demand for flexible, responsive insurance structures.
Hybrid fronting carriers are fully licensed insurers that provide rated paper to MGAs, MGUs, and programme partners.
Unlike conventional fronting models, they retain a meaningful portion of the risk on their own books, typically between 5% and 30%.
This risk retention fosters stronger alignment with reinsurers and capital partners, positioning hybrid carriers not merely as facilitators but as committed stakeholders in the insurance value chain.
UK growth is gaining ground
While the hybrid fronting model first took root in the U.S., momentum is rapidly building in the UK. U.S.-based MGAs wrote over $100bn in premium in 2024, with hybrid fronting carriers responsible for more than $28bn—a 26% increase year-on-year.
In the UK, MGAs now handle over £47bn in premium, with more than 300 active players. The arrival of carriers such as Bridgehaven Insurance, PRA-authorised and backed by PE investor Flexpoint Ford, marks a significant shift in capacity delivery.
Bridgepoint, which recently acquired SureStone Insurance DAC to “unlock EU MGA market,” predicts the European MGA market will grow to £50bn in premium over the next three to five years.
Why capital alone isn’t enough
Private equity and ILS investors are recognising the potential, funding hybrid insurers to capitalise on growth.
However, capital by itself is insufficient. Retaining risk, managing delegated authority, and scaling globally requires robust operational infrastructure. Without these systems, the very complexity that makes the hybrid model attractive can quickly become a liability.
Supporting delegated authority at scale
Many hybrid carriers partner with MGAs that operate under delegated authority from multiple capacity providers.
This adds operational complexity: onboarding, binder management, bordereaux reporting, and regulatory oversight must function seamlessly across partners and jurisdictions.
What the most successful fronting carriers have in common
To stay competitive, carriers must modernise operations. Key investments include:
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Real-time dashboards to track MGA, programme, and portfolio performance, enabling proactive underwriting
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Automated bordereaux and compliance workflows, reducing risk and manual effort while remaining audit-ready
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Scalable architecture for multi-entity, multi-jurisdiction business, supporting growth and governance
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Seamless integration with reinsurers, TPAs, and third-party platforms for streamlined coordination
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Transparent data sharing with all stakeholders, building trust with regulators, capital partners, and reinsurers
Technology that unlocks growth
The ultimate goal goes beyond compliance—it’s confidence. Confidence to expand into new markets, support more MGAs, and offer additional capacity with minimal friction.
Read the full blog from Novidea here.
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