This is a guest post by Mark Christer, CEO of Wakam UK.
A new year has a way of forcing reflection. It invites us to look back, reset expectations and decide what we will do differently in the months ahead. The same applies in insurance. In fact, as we enter 2026, much of the industry is bracing for a period of sustained structural realignment, which has the potential to reshape how the sector operates and redefine what it takes to succeed.
In recent months, the signals behind this shift have become increasingly hard to ignore. At the top of the market, consolidation is accelerating. Beneath it, a fast-moving layer of MGAs and specialty players is expanding, launching new lines and attracting a growing share of capital. Together, these forces are creating a bifurcated market with very different rules for scale and growth.
SCALE HAS BECOME A DEFENCE MECHANISM
Recent consolidation moves underline the direction of travel. Over the past year, Aviva’s acquisition of Direct Line and Ageas’ purchase of esure have signalled a clear shift. Both transactions are best understood not as opportunistic deals, but as rational responses to a market in which scale has become the primary defence mechanism in volume-driven personal lines. It is a pattern that looks set to continue into 2026.
In the next 12 months, I expect claims inflation, regulatory pressures, technology investment and distribution costs to continue to rise. In response, larger balance sheets and broader portfolios will become even more essential in absorbing volatility and protecting margins.
GROWTH HAS MOVED DOWN THE VALUE CHAIN
At the same time, a very different story is unfolding elsewhere in the market. MGAs are expanding at pace, supported by capacity providers that expect to increase their MGA allocations over the next two years. Notably, 84 per cent of MGAs say they plan to launch new product lines, while specialty business now represents more than a quarter of all M&A activity across insurance, with carriers and private equity alike competing for underwriting talent and niche portfolios.
As a result, capital is flowing away from commoditised mass-market lines and towards niches where underwriting insight, distribution creativity and operational speed deliver greater pricing power and clearer routes to differentiation. This divergence is not accidental. It reflects the way risk itself is changing, with new and evolving threats driving demand for more flexible and bespoke cover.
Whether it is climate volatility reshaping loss patterns and creating new risk classes that sit uncomfortably within traditional personal lines portfolios, fraud pressures driven by the industrialisation of synthetic identity, or renewed economic uncertainty in an increasingly volatile global environment, these forces are shortening product cycles and raising the premium on speed, data and decision proximity.
LEGACY STRUCTURES ARE BECOMING A LIABILITY
Large, vertically integrated insurers are structurally slower to adapt to this reality. Their scale brings resilience, but also complexity. Layered governance, fragmented systems and elongated product approval processes make it difficult to respond quickly to emerging risks or to serve specialist segments efficiently. As a result, innovation and growth are migrating towards models that can move faster, test faster and iterate faster.
MGAs sit at the centre of this shift. They are increasingly the engine room for new product development and niche underwriting. Their proximity to distribution and their ability to assemble targeted propositions make them well suited to a more fragmented risk landscape. But as MGA volumes and influence grow, so too does the importance of who they choose to partner with on the capacity side.
WHAT MGAs NOW SELECT FOR
In this new structure, five factors are becoming decisive for MGAs. Speed remains critical, as the ability to make underwriting and referral decisions quickly can determine whether a niche opportunity is captured or missed. Data has become equally important, with real-time insight into portfolio performance, claims trends and emerging risks now a basic requirement rather than a differentiator.
Oversight also plays a central role. As delegated models scale, transparent and disciplined governance is essential to protect both capacity providers and customers. Regulatory readiness has emerged as a fourth consideration. With 46 per cent of MGAs citing regulation as the biggest barrier to growth, partners that can help navigate Consumer Duty, Fair Value requirements and cross-border complexity are increasingly valued. Finally, we must acknowledge the accessibility of decision-makers matters. MGAs increasingly favour partners where accountability is clear and decisions can be escalated and resolved without friction.
THE TALENT EQUATION IS SHIFTING
There is another dimension to this structural change that deserves attention: workforce. According to Deloitte’s 2026 Global Insurance Outlook, success in this new environment will depend not just on technology adoption, but on how effectively insurers embed digital tools into workflows and transform workforce capabilities. This is not a peripheral concern.
Veteran employees are leaving the industry faster than they can be replaced, and the skills gap between legacy knowledge and emerging capabilities is widening. Deloitte’s research found that while 90 per cent of insurance executives agree on the urgency of reinventing the employee value proposition to reflect human-machine collaboration, only 25 per cent have taken tangible action to elevate human skills. For MGAs, this creates both a risk and an opportunity. Those that invest in upskilling, attract next-generation talent, and design workflows where humans and technology collaborate effectively will compound their structural advantages.
WHY SIMPLIFICATION IS BECOMING A COMPETITIVE ADVANTAGE
Ultimately, the winners of this era will be those that can support rapid product deployment while maintaining rigorous underwriting standards and transparent governance. On a personal level, this realignment reinforces a long-held belief about where the market is heading. The future belongs to simplified, specialised operating models that empower teams to act with conviction and that place decision-making close to risk.
All of this brings me to a clear prediction for 2026. As I see it, the same structural forces driving consolidation in personal lines will increasingly feel like a squeeze for insurers that cling to legacy operating models. Complexity will become a cost, not a strength. Long product cycles will translate into missed opportunities. Moreover, layered governance will struggle to keep pace with fast-moving risk.
Insurance is no longer converging on a single dominant model. It is selecting its architecture through capital flows, M&A and delegated authority expansion. The market is signalling that scale will dominate commoditised personal lines, while speed, specialisation and discipline will define the next phase of specialty growth. In the coming years, structure will matter as much as capital, and speed will matter more than size.
Image provided by Wakam
