Managing general agency business has become a major focus in the excess and surplus lines sector, as insurers seek to take advantage of their specialized expertise and generate additional premium.

“There’s a lot more emphasis” on MGAs, managing general underwriters and program business, said John Edack, San Francisco-based senior executive vice president of E&S casualty for Arch Capital Group Ltd.’s U.S. insurance group.

With the abundance of capital in the market, “people are looking to deploy capital and getting it to work,” said James Drinkwater, New York-based president of AmWINS Group Inc.’s brokerage division. “From an expense perspective, outsourcing underwriting can sometimes be a lot more effective for carriers, and there’s expertise they’re building on that they don’t have to build themselves.”

Recent developments in this area include:

n Charlotte, North Carolina-based AmWINS in August said it is forming two specialty managing general agencies focused on the marine industry with capacity provided by Argonaut Insurance Co.

n Daytona Beach, Florida-based Brown & Brown Inc. in June said a subsidiary had acquired the assets of C & C Risk Services L.L.C., a Houston-area managing general agent.

n Newport, California-based Alliant Insurance Services Inc. in May said it is rebranding its managing general agent business as Alliant Underwriting Solutions, with plans to build a “powerful underwriting platform.”

n Wholesale broker Worldwide Facilities L.L.C. completed its acquisition of Gerald J. Sullivan & Associates Inc., which was ranked as the eighth-largest MGA/underwriting manager by Business Insurance based on 2016 revenue.

n EPIC Insurance Brokers & Consultants, based in San Francisco, and Menlo Park, California-based Oak Hill Capital Partners acquired an equity stake in managing general agency Paragon Insurance Holdings L.L.C., based in Avon, Connecticut.

n Managing general agency Coalition Inc., based in San Francisco, which has a cyber security focus, launched in December.

“We continue to see the establishment of more MGAs dotting the landscape, providing more specialty products, especially those that offer catastrophe capacity,” said Tish Fournet, Rolling Meadows, Illinois-based president of client relations for Risk Placement Services Inc., a managing general agent/underwriting manager and wholesale insurance broker that is a unit of Arthur J. Gallagher & Co.

She added that the MGA model “is an efficient way” for investors to deploy capital.

“I think there’s always a concern when you’re handing over underwriting authority to a third party,” said Joseph Cellura, president of the North American casualty division of Allied World Assurance Co. in New York.

“You need to make sure you’re doing your due diligence and you’re doing it for the right reasons” with “somebody who has a solid track record, has expertise and access to customers,” he said.