Spanish MGAs in talks to change rules to allow them to serve buyers across Europe

Spanish MGAs are holding negotiations with the Spanish authorities to implement legislative changes that would enable them to operate across the EU. Local MGAs have expanded their presence in Spain but are concerned that they do not enjoy a level playing field with their peers in other European jurisdictions, and cannot provide cover for companies across Europe. To change this situation, a group of companies have revamped and relaunched the country’s association of MGAs, which is now in talks to get the rules changed. “If a Spanish MGA wants to sell covers in France or Portugal, it cannot do it. But French or Portuguese MGAs are able to sell their products in Spain,” Álvaro Satrústegui, the secretary-general of ASASE, the MGA association, told Commercial Risk. The group of MGAs is demanding to be treated like insurance intermediaries, such as brokers, which would enable them to provide covers for clients outside of Spain thanks to the European financial services passport. Currently they do not enjoy this treatment under Spanish law while MGAs in other countries do. In mid-April, the Spanish media reported that Eva María Lidón, a director at insurance market regulator DGSFP, said during a conference in Madrid that the agency is open to negotiating regulatory changes as the current rules for MGAs in Spain seem to have become outdated. Satrústegui, who is also the CEO of the Madrid-based Exsel Underwriting Agency, is one of the drivers of the new MGA association, which was re-funded one year ago, with Iberian Insurance Group’s Dario Spata as president. ASASE now has 22 MGA – or agencias de suscripción, as they are known in Spanish – members and Satrústegui said that the goal is to reach 30 by the end of the year. He added that Spanish MGAs have been able to grow thanks to their ability to adapt covers and underwrite new risks in a more agile way than their larger underwriting rivals. Some work with capacity provided by large insurers and reinsurers with a Spanish presence, while others look for capacity in markets like London, Germany or France. They target buyers a rung below Spain’s largest companies or those that cannot purchase off-the-shelf covers designed for the mass market. Exsel, for example, offers several E&O covers for architects, lawyers, engineers, tech startups and even private investigators. It also provides liability insurance for mid-sized companies and, in March, launched a Lloyd’s-backed cyber risk product for SMEs with revenues of up to €20m. The company does not sell the covers directly to final buyers, though, as it has chosen to work via the broker market, Satrústegui said. He believes that MGAs can continue to help close the protection gap in the Spanish market, but conceded that some hard-to-underwrite risks in sectors like food processing and chemicals present challenges that are currently difficult for underwriters to overcome. “In some sectors, it is less a matter of market appetite than of the quality of risk management by companies,” he said.

Spanish MGAs in talks to change rules to allow them to serve buyers across Europe

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