MGAs power DIFC dominance in MEASA
DIFC is cementing its position as the region’s leading hub for insurance and reinsurance. Salmaan Jaffery, Chief Business Development Officer at DIFC Authority, discusses how a strong pipeline of new MGA entrants and a visionary regulatory framework contribute to making the Centre a formidable force in MEASA.
This article originally appeared in the Middle East Insurance Review's April 2025 edition.
Salmaan Jaffery
Published: 15/04/2025
5 min read
As a leading global hub for insurance and reinsurance in the Middle East, Africa and South Asia (MEASA) region, the Dubai International Financial Centre (DIFC) continues to support the sector’s robust growth, reinforcing Dubai’s growing prominence in the global reinsurance landscape.
The Centre’s recent growth spurt has been powered by the entry of MGAs who view it as an internationally sound jurisdiction with robust regulations and other benefits, on par with global markets.
Growth and expansion of MGAs at DIFC
MGAs are the fastest growing segment in DIFC’s burgeoning insurance ecosystem and an essential driver of regulated insurance activity in the centre. Nearly 53 per cent of DIFC’s insurance sector is made up of MGAs. Many of these companies are expanding their MGA model to serve the region and strengthening our ecosystem with underwriting expertise and capacity from different markets across the globe.
Over the past year, 11 MGAs were authorised by the Dubai Financial Services Authority (DFSA) to conduct underwriting activities in and from DIFC. These MGAs bring with them binding authorities for various lines of business, from P&C to specialty lines, which allows them to hit the ground running and penetrate MEASA markets more efficiently. Among the MGAs that recently joined our community are ASR Middle East, Rokstone Underwriting (DIFC), XS Global (DIFC) and Nexus Underwriting (DIFC).
We have also received a number of enquiries from companies based in North America and Asia-Pacific expressing interest in applying for an MGA licence in DIFC and working with reinsurance brokers on the ground. Our pipeline of MGAs is in its healthiest shape in DIFC’s 20-year history, solidifying the Centre’s position as the leading MGA hub in the MEASA region.
DIFC serves as a gateway to the region for its MGA clients who are looking to access underpenetrated regional markets and expand their client base. Our robust legal and regulatory framework is also a key factor driving their growing presence in the Centre.
Operationally, Dubai’s ideal time zone offers MGAs unmatched access to new and existing global markets. The Centre’s hyper-connected ecosystem enables MGAs to forge partnerships and work collaboratively towards servicing the region and narrowing its insurance gap. As a growing distribution channel, MGAs also benefit from working closely with DIFC-based brokers.
The financial impact of MGAs at DIFC
MGAs account for 66 per cent of the gross written premiums (GWP) underwritten out of DIFC.
Their contributions are significant, not only in terms of the premiums they generate, but also in terms of scope and coverage. Given their underwriting sophistication, MGAs are equipped to cover specific lines of business and niche markets. The MGAs in DIFC can provide capacity for specialty lines like accident and health, aviation, cyber, directors and officers insurance, mergers and acquisitions, surety, as well as space insurance, which used to be primarily placed in London.
The MGA model in MENA
The MGAs’ nimble approach to product development makes an enormous difference in servicing the unique needs of clients, especially in our region where tailor-made, localised solutions and swift implementation are valued. Regional markets are becoming more receptive to the new products and solutions being offered by MGAs, giving the sector even more credibility.
By reaching markets that some carriers are unable to serve, MGAs reinforce Dubai’s position as a gateway to emerging markets in the Middle East and North Africa (MENA). As MGAs gain ground in the MENA region, their underwriting expertise also puts them in a unique position to bridge the insurance gap in a largely underpenetrated region.
Trend-setting regulatory regime
The DFSA’s world-class regulatory regime and risk-based approach to supervising MGAs is a big draw for companies. The DFSA understands and regulates MGA business activity in the same way it is regulated in more mature markets such as Bermuda and London. This makes DIFC an attractive jurisdiction for international and regional companies who want to establish a local presence to expand their portfolio, tap into new markets and drive regional business growth.
The regulator’s recent licensing adjustment, reducing the non-holding of client monies base capital requirement from six weeks expenditure-based capital to a fixed USD 30,000, also generated significant interest from new prospects, especially entrepreneurs who want to set up their MGA start-up in a globally recognised regulated environment.
The future of the MGA model in the Middle East
We expect MGAs to continue their robust growth within our region.
Economic diversification in regional economies is expected to drive the sector’s growth. MGAs will help accelerate and de-risk the transition from fossil fuels to net-zero across GCC countries. Mega projects in the Middle East also present a sizeable opportunity for MGAs to be at the forefront of product innovation and drive traction and scale across the sector.
We also see the model remaining attractive for carriers who are not in the region yet. With lower administrative burdens, MGAs can focus on product development and delivering underwriting returns. Their importance in the wholesale insurance value chain and low capital requirements will also help attract more players and capital to the region.
Ultimately, the flexibility and agility that defines the MGA model will play a big role in supporting the region. The capacity and technical expertise that MGAs offer, coupled with their quick turnaround and bespoke underwriting, will bring more maturity to regional markets. Looking at the consistent year-on-year growth of MGAs in DIFC - their growing numbers and significant contribution to the total GWP in the Centre - we surmise that MGAs will remain relevant and shape the future of insurance in the Middle East.