Bill Cooper, Managing Director of Howden Capital Markets & Advisory joined Insurance Insider’s Meg Green during the PwC Insurance Summit in Bermuda to discuss insurance market trends, M&A projections, MGA expansion and ILS insights.
M&A activity post Hurricanes Helene & Milton
Before Hurricanes Helene and Milton, Cooper expected to see a resurgence in M&A activity but now, it’s a different story. He said that the harder market will now stay harder for longer, and conversations with investors have led him to believe that expectations for profit in medium sized carriers are higher than they otherwise would have likely been.
“Probably, we’re a year or two away from M&A rising,” said Cooper. “There’ll still be some, but I think an increase is a year or two away. “
MGA is here to stay – increased growth on the horizon
However, Cooper does expect growth in the MGA market to continue, as it’s growing in popularity in Europe following it’s established success in the United States.
“I think the entrepreneurial nature, particularly of specialty lines, means that underwriters and executives like the MGA model because they feel like they’re in control of their businesses,” said Cooper.
He also said that financial investors like backing this business because you can see the growth and they’re not capital heavy.
“We definitely think the MGA model is here to stay,” Cooper said.
ILS Market in 2025
Looking at the ILS market, Cooper noted the 2024 record high of cat bonds, which he expects to continue into next year.
“Probably a function of rates being higher and people buying a lot of outwards reinsurance and cat bonds are now an integral part of most people’s reinsurance packages, so we think that’s going to carry on,” said Cooper. “And, of course, they’re the most modeled and the most liquid form of ILS that you can get, so they’re more attractive to a wider range of investors.”
From a wider view of the ILS market, Cooper said he’s started to see firms use ILS for classes such as cyber, casualty, and the legacy space.
Watch Bill Cooper’s full interview here: Live from the PwC Insurance Summit: M&A Trends, MGA Growth & ILS Market Outlook | Insurance Insider
