So what does this mean for the complex and oft opaque mechanics of capacity deployment?

Trend No. 1 - The lifeblood of the Insurance industry - underwriting - is at a premium

Capacity is going to chase underwriting more strongly than ever before. But it is at a premium and the MGAs and Insurtechs are stepping up especially in the surplus markets.

In 2023, The MGA market grew 13% over a one-year period while property-casualty premium grew by just 10%. There is a fundamental shift happening in distribution side towards MGAs with advanced and relevant underwriting departments. especially in the surplus markets, where admitted carriers have struggled. According to Insurance Business Mag “Capacity providers are recognizing that MGAs offer something they cannot always replicate in-house. Whether it is underwriting insight into an emerging risk, the ability to tap into specialist distribution, or the agility to develop products quickly, MGAs are increasingly the channel through which insurers can experiment, diversify, and grow. “ However solving the underwriting skill gap is easier said than done. As multiple industry reports—from McKinsey, AM Best, and PwC—show, the real scarce resource in today’s insurance market isn’t capital. It’s underwriting skill. The industry has shifted from a growth-at-all-costs mindset to an environment where underwriting excellence is at a premium.

And one could argue this skill is a combination of technical expertise, technology advancement but most importantly local domain knowledge of the risk. The first two can be taught or built but the last is experience. Hence cue the independent distribution channels, local, specialized and looking for capacity at an alarmingly fast rate - a perfect segway into trend no. 3, but first AI…

Trend no. 2 - AI just joined the chat - and it’s decided to stay

Predicting what AI can do is in itself changing faster than you can publish the thought piece. Such is the exponential growth and learning curves that LLMs gobble up daily. In 2023 predictions were made on the impact of AI to underwriting. In 2025 AI is itself helping write the prediction of what it can do for underwriting…

According to Accenture, automating underwriting processes could allow for efficiency gains of up to US$ 160 billion by 2027. The requirements: Streamlining the underwriting process, reducing the time and resources needed to underwrite a policy, and increasing profitability through more accurate policy pricing and advanced risk assessment. And the market is reacting strongly. As expert.ai points out, a risk engineer or even a team of engineers cannot manually read every document nor personally inspect every property. Existing digital solutions that simply read text are inadequate for risk engineers because they need to correlate details and cross-reference data across all the sources you’re using for analysis. This is where the power of AI and its strengths in analyzing and correlating information become critical allies for the risk engineering process.

In CAT losses, the traditional simulations often fall short. Flood models designed to measure the same risk have yielded conflicting outcomes. Wildfire models can struggle to accommodate the dizzying number of variables in play—everything from the role of human intervention to the possible flight path of a wind-borne ember. Humans would find it nearly impossible to perform such a detailed model and analysis, especially if a portfolio contains thousands or millions of homes. AI has now become invaluable to insurers seeking to price the risk, set premiums and have enough capital to pay claims from the worst catastrophe losses. Across the spectrum of players AI investment has jumped to the forefront. Zurich IG AG, Verisk, Munich Re, Zest AI..the list of AI powered capabilities and investment is all prevalent.

AI is the chat now…but capacity is chasing these AI models on broken rails built decades ago. A better segway into trend no. 3

Trend no. 3 - Speed of deploying capacity got passed like it's standing still by the distribution side

MGAs are once again moving to the forefront. Nearly a century ago, Managing General Agents rose to prominence in the U.S. for reasons that look remarkably similar to today’s environment. Faced with geographic, regulatory, and operational constraints, Northeast-based insurers relied on trusted local agents in the South and West, granting them underwriting and claims authority so they could serve markets without building full branch infrastructures. Today, elevated CAT risks, regulatory friction, and the difficulty of deploying capacity quickly are creating a similar resurgence — MGAs are filling the gaps with speed, specialization, and local expertise.

But capacity remains a challenge. While longer contracts and stronger relationships are emerging among established players, many smaller MGAs still operate under 90-day termination clauses. During recent hard market conditions, this left some scrambling to renew or expand capacity. This has also stifled innovation resulting in capacity sitting on the shelf and gaps in coverage that shouldn’t be there.

While the risks of deploying capacity faster often goes against the accepted principles from incumbent capacity providers - that of established trust, proven underwriting prowess and experienced teams, the change is here and making a strong case for momentum in 2026. As Insurance Business Mag puts it - Capacity is evolving, diversifying, and increasingly aligned with the strengths that MGAs bring to the market. If 2025 was about building confidence, 2026 will be about accelerating growth, harnessing data, technology, and collaboration to unlock new classes of risk and create more resilient partnerships.