Small and medium-sized enterprises (SMEs) are critical drivers of the UK economy, accounting for over 99% of all businesses, employing more than 16 million people, and contributing around half of UK private sector turnover. They are the engine of local job creation, entrepreneurship, and economic resilience. Yet as they navigate rising operational costs, regulatory complexity, and emerging risks, from cyber threats to climate-related disruptions, SMEs rely on trusted insurance advice and protection for resilience in volatile times.
While large multinational brokers dominate global premium flows, it is regional brokers who are closest to SME clients and the real economy. Regional brokers understand their local business landscapes inside out. But they also face a distinct set of challenges that call for a different model of support, one built not on scale, but on responsiveness, proximity, and trust.
Regional markets like Leeds have emerged as vital distribution hubs, with brokers playing a central role in connecting capacity with SME demand. It's no coincidence that we’re seeing sustained growth, resilience, and innovation emerging from these centres.
Managing General Agents (MGAs) are uniquely positioned to work with regional brokers to meet these evolving demands for highly relevant products. As nimble, entrepreneurial businesses with deep underwriting and product development expertise, MGAs provide the flexible, regionally attuned support that brokers, and their SME clients, need. They are often far closer to the front line than traditional insurers, with delegated authority and deep sector knowledge enabling them to create niche solutions quickly and at scale.
The result? A fast, flexible, relationship-driven ecosystem that delivers real value to SME clients while fuelling innovation and growth in regional markets.
At the MGAA, we’ve seen this value in action. Our 249 MGA members, working with 68 insurer partners, now manage over £17 billion in GWP. That’s a significant proportion of the UK market, and much of it flows through regional broker channels into local economies. These partnerships are not just commercial arrangements; they’re part of a wider ecosystem of support that helps SMEs build resilience, invest, and grow.
However, to continue delivering this value, we must address some fundamental regulatory challenges.
In our recent submission to the FCA’s CP25/12: Simplifying Insurance consultation, we welcomed the intent to improve consumer outcomes and drive innovation. But we also called for broader reform that recognises the distinct role MGAs play, not merely as intermediaries, but as manufacturers, underwriters, and market makers.
Current regulation often treats MGAs like traditional brokers, failing to reflect their capital binding authority relationships and oversight frameworks. This creates ambiguity in co-manufacturing roles, duplicative governance processes, and disproportionate compliance burdens that can ultimately stifle innovation and slow down response times, especially in the regional SME space where speed and specialism are paramount.
Furthermore, the growing challenge of accessing consistent UK-based capacity has driven many MGAs to explore overseas markets. While regulatory safeguards are essential, we believe the FCA should consider a more flexible framework, inspired by the US excess and surplus lines model, that enables access to approved non-UK capacity for commercial and reinsurance risks under clear disclosure and governance standards.
If we want to support the SME economy, we must ensure that regional brokers have the tools, capacity, and regulatory environment to do so. That means empowering MGAs, reforming outdated regulatory assumptions, and recognising the essential role of flexible, partnership-led insurance models in the modern economy.
The UK’s regional brokers and MGAs are not just a distribution mechanism, they are enablers of economic resilience, engines of innovation, and trusted partners for the businesses that matter most. Let’s ensure the regulatory framework, market infrastructure, and industry mindset evolves to reflect that.
