W.R. Berkley Corp. President and CEO W. Robert Berkley, Jr. is no stranger to cycles in the insurance sector, especially when it comes to the rise and fall of managing general agents (MGAs). During the company’s second-quarter earnings call this week, he shared both optimism over the firm’s solid performance and caution about potential disruptions from rapid MGA growth.
Despite reporting more than 7% increases in both net income and premiums, and a strong combined ratio of 91.6, Berkley expressed concern about the long-term implications of the current MGA boom—particularly those backed by reinsurers and private equity firms with limited experience or alignment with risk-bearing partners.
“In many delegated authority structures, there tends to be a misalignment between those writing the business and those supplying the capital,” Berkley explained. “That’s not to say every arrangement is flawed—some are very effective—but it’s important to acknowledge the risks and manage them carefully.”
He noted the surge in MGA activity, attributing much of it to inexperienced newcomers. “We’re seeing tremendous expansion in this space, and much of it is driven by entities that don’t have a deep bench of expertise,” he said.
Backing from reinsurers and investors chasing growth has amplified the trend, Berkley added. “The reinsurance market, in some cases, is prioritizing expansion over oversight. They’re moving quickly, but not always with a firm grasp on what’s happening at the ground level. We’ll have to see how this unfolds—those of us who’ve been in the industry a while recognize the pattern.”
Berkley also raised eyebrows with a comment about the rising interest from investment bankers. Over the past few months, he said, the company has received “an unusually high volume” of inquiries about potentially acquiring MGAs—many of which are private equity-backed.
He suggested this flurry of activity could signal a turning point. “The pace of these calls might be an early indicator that momentum is starting to slow. When the music stops, we’ll see who’s left with a chair,” Berkley remarked.
As for how W.R. Berkley is responding, he said the company remains open to discussions but holds a high bar for engaging seriously. “We’re always willing to listen, but it takes quite a lot for us to get meaningfully involved,” he said.
Market Breakdown: Property, Transportation, and Professional Liability
Berkley also shared insights into individual market segments, starting with commercial property. He pointed to growing competition, particularly for large shared and layered accounts, fueled by both more aggressive reinsurer pricing and increased MGA participation.
“In the small account space, there’s competition, but nothing like what we’re seeing with larger risks,” he said.
Turning to commercial auto, Berkley highlighted MGA activity as a factor dampening the industry’s ability to push rate increases. “We and others continue to seek rate improvements, but MGA involvement is creating short-term resistance,” he noted.
He likened the situation to a hose building up pressure: “Eventually, the kink will snap, and when it does, responsible long-term players will be the ones that benefit.”
In professional liability, Berkley observed that the public directors and officers (D&O) market appears to be stabilizing, while the private and nonprofit segments remain extremely competitive—again driven in part by MGAs targeting niche areas.
Throughout the call, Berkley’s message was clear: while his company is performing well, the surge in MGA activity—particularly from newer players backed by eager capital—is a trend to watch closely, not embrace blindly.