Closing out the first day of the Health & Protection IPMI Summit on 9 May 2023, McGrigor said he believes that smaller MGAs need a larger scale to generate significant profits. He stated that $10 million in gross written premium is not sufficient for an MGA to make substantial progress.

McGrigor explained that while smaller MGAs can make some money based on their investments and relationships with a limited number of trusted brokers, it becomes challenging to reach $20 million or $30 million in revenue. The primary difficulty lies in acquiring additional trusted brokers, which limits the potential for growth. All size categories will likely experience some consolidation, large, medium as well as small.

Private equity firms have shown interest in investing in smaller players in the IPMI market, and there have been suggestions of consolidating around ten smaller MGAs. However, the challenge lies in merging entrepreneurs who have different broker networks and systems. While some attempts at consolidation have been made, they have not yielded significant success.

McGrigor concludes that consolidation in the small MGA market is likely to occur due to the challenges faced by these organizations. The IPMI sector can benefit from larger-scale operations that can generate meaningful profits and navigate the complexities of the industry.