Across the globe, countries are undergoing significant energy transitions in the drive to reduce carbon emissions and slow down climate change. 

Whilst it is clear that the new US administration is taking a different approach towards Net Zero policies than its predecessors, in other parts of the globe, investment in clean energy is increasing. 

In Europe, for example, clean energy sources provided a record 47% of European electricity last year, powering ahead of fossil fuels, with solar power achieving record growth to give Europe 11% of its electricity. Similarly, in Africa, several countries have expanded their renewable energy portfolios in 2024, including Nigeria, where the Government has launched new off-grid solar initiatives to increase rural electrification and Angola where regulatory frameworks have been streamlined to encourage international investment in renewables. 

Managing risks in renewable energy projects

As the shift towards renewable energy projects continues, the insurance and reinsurance sectors can help manage any financial loss to ensure that investors, energy generators and developers can proceed with projects more confidently. 

Risks that energy projects may face include weather variability, supply chain disruptions, cybersecurity threats, equipment failure, and natural disasters. Coupled with this, in many developing countries, there also needs to be large infrastructure upgrades to support renewable energy projects, including new transmission lines to transport electricity from wind and solar farms to major cities, grid stabilisation systems and energy storage facilities such as battery storage for solar farms. 

This, therefore, requires huge amounts of investment, which will need to be supported by the (re)insurance sectors whether it be protecting against accidents during project development or covering long-term risks such as mechanical failures. 

South Africa’s green hydrogen push

The Trump administration’s withdrawal from the coal-to-clean Just Energy Transition Partnership (JTEP) has caused significant uncertainty. However, it is positive to see that the EU is expected to launch its first Clean Trade and Investment Partnership (CTIP) with South Africa, which focuses on investments in clean 
technologies such as hydrogen.

In South Africa, the Government is pushing for green hydrogen production as part of the JTEP. Key developments include Sasol’s Boegoebaai Green Hydrogen Project in the Northern Cape involving R200 billion of investment, the Hydrogen Valley Development (covering Limpopo, Gauteng, and KwaZulu-Natal) and Hydrogen Export Agreements with the EU, Japan and Germany. 

Major costs will include specialised equipment such as electrolyser plants to split water into hydrogen, and storage and transport facilities, including hydrogen tanks, pipelines and ports. Coupled with this, there are significant supply chain and logistical risks. These include maritime transport challenges as hydrogen is flammable and must be handled carefully, as well as port infrastructure risks as upgrades will be needed to store and export hydrogen safely. 

The focus on hydrogen provides opportunities across a wide variety of insurance and reinsurance sectors, to ensure that the risks around hydrogen production and transport are minimised. For example, construction insurance will be able to cover the costs of overruns, delays and damages during project development, whilst marine cargo insurance will cover risks during hydrogen shipping and environmental liability insurance can cover the clean-up costs from hydrogen leaks. 

Government support is key

In order for the (re)insurance sector to effectively mitigate these risks, the industry will also require support from government. Most notably, stable and consistent renewable energy policies including clear commitments on net-zero targets and energy roadmaps will create predictability, maximising certainty and making it easier for insurers to price risks accurately. For example, in South Africa, consistent Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Auctions will provide insurers and reinsurers with predictable business opportunities. 

Governments can also co-insure high-risk projects when there are high upfront costs, demonstrated by South Africa’s Infrastructure Fund in 2024, which launched a R100 billion blended finance scheme to make insurance more accessible for developers. 

Given the changing geopolitical landscape, it is now more vital than ever that the South African Government steps up to assist the (re)insurance sector in managing the risks associated with renewable energy projects, so they can progress in a safe and sustainable way.

This article first appeared in the April 2025 edition of the FA News

Managing general agents (MGAs) offer insurers competitive prices, which can put downward pressure on premiums, while also helping insurance companies access new markets and diversify risks, Specialty MGA Africa and Middle East’s Mr Youssef Fassi Fihri said. At the same time, he said that MGAs provide global reinsurers an efficient, low-risk method for accessing the Middle Eastern market.

As managing general agents (MGAs) “act as an extension of the insurer”, they can provide underwriting services and policy administration, Specialty MGA Africa and Middle East CEO Youssef Fassi Fihri told Middle East Insurance Review. In comparison, he said that brokers act on behalf of clients to negotiate the best insurance policies.

He said, “MGAs can therefore assess the quality of the risk and premium on behalf of their binder, while brokers advise their clients on how to achieve optimum protection.”

He also noted that while brokers presently dominate the market in the Middle East, MGAs are on the rise, particularly within niche sectors and takaful.

According to the Dubai International Financial Centre (DIFC), over the years, reinsurers increasingly participated in the creation of MGAs, resulting in agencies accounting for 43% of (re) insurance players in 2023.

Said Mr Fassi Fihri, “Many MGAs based at the DIFC are increasingly successful at dealing in cross-border risks, as DIFC’s passporting arrangements allow them to underwrite risks across the Middle
East.”

Trends and prospects

Over the past years, regulators such as the Dubai Financial Services Authority (DFSA) and Saudi Central Bank (SAMA) have been introducing frameworks to facilitate and govern MGAS, increasing licences and ensuring better compliance, Mr Fassi Fihri noted.

For instance, Rokstone Dubai, an MGA, had to first secure a regulatory licence from the DFSA before opening for business.

“MGAs in the region have (also) been enhancing their relationships with global reinsurers to maximise capacity,” he said.

“Lloyd’s of London for example, have been actively engaging with Middle Eastern MGAs, highlighting the growing global confidence in the region.”

With consumers and businesses increasingly demanding shariah-compliant insurance products, takaful is seeing rapid growth in the region as well, he noted. As countries such as Saudi Arabia, UAE and Bahrain are expanding in this segment, MGAs are also playing an essential role in distributing these products, he said.

“Regulatory bodies such as SAMA and the UAE Insurance Authority are providing incentives for takaful expansion, and MGAs have been introducing hybrid models, combining traditional insurance and takaful, to accommodate different customer needs,” he said.

Successful business models

“The most successful MGAs will combine deep regional expertise with access to global reinsurance capacity,” Mr Fassi Fihri said in response to a question on what some of the most effective business models among MGAs in the Middle East were.

He said, “Both are necessary if MGAs want to underwrite large and complex risks, which require localised knowledge and high-security-rated capacity.”

For instance, he noted underwriters with Specialty MGA Africa and Middle East were based in Casablanca and Dubai, in addition to London, and knew their local markets well. At the same time, he pointed out that the
underwriters also had support from the wider international team.

Opportunities and challenges

When asked what some challenges MGAs in the Middle East faced, Mr Fassi Fihri said, “Consumers in the Middle East continuously expect to have quicker solutions and seamless digital experiences. To develop these capabilities, MGAs must invest significantly in their technology and infrastructure, which may be a challenge for many given their limited capital.”

On the flip side, he noted that governments in the region are supporting InsurTech adoption by investing in start-ups in the sector and providing incentives for innovation.

He said that this gives “opportunities for MGAs to partner with InsurTech businesses to enhance their digital capabilities and offer this to customers.”

Working with (re)insurers

According to Mr Fassi Fihri, “the traditional insurance industry has already started to react to the growth of MGAs, which can be very competitive on price and put a downward pressure on premiums”.

He said, “Many insurers are allocating growing shares of their capacity to MGA partnerships, which can help them access new markets and diversify their risk.”

In the long term, he expects MGAs to lead in “niche, underserved markets, with larger, more established reinsurers providing balance sheet support” as well.

This is because he believes MGAs offer global reinsurers an efficient, low-risk method for accessing the Middle Eastern market.

“They make excellent partners as they are agile and innovative, introducing new ways of working and reducing claims settlement times,” he said, noting MGAs often acted as bridges between carriers looking to diversify and businesses whose risk profiles could not be supported by domestic insurance markets alone.

The future

When asked what trends and prospects he could foresee among MGAs in the Middle East over the coming year, he said that he expected agencies to focus on tools like parametrics.

“The floods in Dubai last year showed that significant coverage gaps remain, and parametrics are perfect for covering this kind of risk, and for making claims more efficient,” he said, also noting that his company has had
success with similar products.

Said Mr Fassi Fihri, “I expect parametric solutions will only grow in popularity and be a part of the development of national coverage against CAT risks to improve resilience.”

This article first appeared in the April 2025 edition of the Middle East Insurance Review

Collaboration is growing between MGAs and InsurTech firms in Asia, particularly in the cyber insurance space, MNK Group’s Mr Manoj Kumar said to Asia Insurance Review. This plays into the ability of MGAs to offer specialised products for specific industries and risks.

Managing general agents (MGAs) are able to “provide faster turnaround times for clients”, as there is no need to go back and forth with insurers for underwriting decisions, unlike brokers, according to MNK Group chairman Manoj Kumar.

This is because MGAs are agencies that have been “delegated underwriting authority under the terms of a binding authority agreement from (re)insurers, meaning they can underwrite and manage policies without waiting for an insurer’s decision”, he told Asia Insurance Review.

“As a result, unlike brokers who shop for standard policies and/or support from reinsurers, MGAs can customise coverage based on the specific and bespoke needs of their clients,” he said.

“Furthermore, MGAs can specialise in niche or high-risk sectors, where standard insurers and brokers may lack expertise and struggle to find coverage.”

MGAs in Asia

Over the past year, Mr Kumar has observed an increase in MGA activity in Asia, as activities continue expanding out of crucial markets in the US and the UK.

And although many countries in Asia have regulations covering the MGA model, he believes Lloyd’s has nevertheless engaged with regulators in the continent to discuss how coverholders in the UK market are regulated, promoting the adoption of similar models in the region.

“In addition, Labuan, Malaysia, has not only solidified its position as a leading captive centre in Asia but has become an attractive place for MGAs to form and grow over the last year. Labuan operates within a clear and comprehensive legal framework, enforced by one regulator, the Labuan Financial Services Authority,” he said.

“This has provided MGAs with a predictable and stable environment, making it easier for these groups to do business.”

Mr Kumar has called the jurisdiction’s regulatory framework “positive” as well, saying that the dynamic and developing market has allowed his company to maximise growth and offer products to clients across Asia and the rest of the world.

He also noted that the Hong Kong and Australian MGA spaces were heating up as well.

The market is growing too in other parts of Asia Pacific. For instance, Global Insurance Law Connect’s report published in October 2024, “Innovation abounds opportunities for growth in the global MGA market”, found that MGAs were gaining ground in financial centres such as Beijing, Shanghai and Shenzhen, in China.

The report noted increased MGA innovation in insuring uninsurable homes due to climate change crucial. The report said, “Specialist flood risk mitigation products and new parametric covers are being brought to market under MGA cover, supporting initial efforts to resolve this emerging property insurance challenge.”

Some advantages

As MGAs in Asia are often more specialised and agile than larger insurers, Mr Kumar believes the former are able to focus on niche markets and hard-to-place risks that more traditional firms struggle to access.

“Those that offer specialised products for specific industries and risks are doing well,” he said, noting that over the past year clients have reaped the benefits of being able to talk to experts about innovative solutions to unique and niche risks.

One reason for this, Mr Kumar said, was hiring practices that targeted people with “deep knowledge and expertise in particular sectors”.

An emerging trend

When asked to name some emerging trends surrounding MGAs in Asia, Mr Kumar was quick to point out the rising collaboration between agencies and InsurTech firms, particularly in cyber insurance. He said, “With an increase in cyber crime across Asia over the last year, MGAs have worked with InsurTech firms to develop specialised cyber insurance solutions, including AI-powered risk assessment tools to adjust coverage based on a company’s digital footprint.” 

Opportunities and challenges

According to Mr Kumar, one of the larger challenges facing MGAs in the region was the “fractured regulatory landscape across Asia, with each country having its own licensing requirements and compliance obligations”.

“Whilst some areas like Singapore and Hong Kong have clear regulatory frameworks, others have more evolving policies,” he said.

“Coupled with this, numerous Asian regulators require MGAs to have minimum capital and solvency margins similar to traditional insurers, (which is) particularly challenging for newer MGAs.”

As a result, Mr Kumar believes it’s important for MGAs to have localised compliance teams, in order to keep track of local regulations.

Collaborating with (re)insurers to gain financial backing can help new MGAs in Asia enter the competitive market as well, he said.

Opportunity for the traditional insurance industry

Said Mr Kumar, “MGAs in Asia have acted as both a challenger and partner to the traditional insurance industry. This is positive for clients, insurers and the overall health of the Asian market.”

When asked what some short- and long-term implications were for the traditional insurance industry, he highlighted lower overheads among MGAs, which means they can often challenge larger competitors on price in the short term.

Despite this, Mr Kumar believes traditional insurers could turn this challenge into an opportunity by seizing the chance to innovate and improve offerings. “In the longer term, by helping insurers to access new markets and industries, MGAs also offer growth opportunities,” he said.

In short, according to Mr Kumar, a reward insurers may gain if they successfully partner with an MGA is “greater reach, an enhanced and more innovative product offering and streamlined operations that save on costs”.
To do so, he recommended that insurers choose MGAs with a strong team of professionals, deep expertise in their respective sectors and significant experience in the Asian market.

The future

As insurance markets in Asia will continue to be significantly disrupted by the adoption of AI for tasks such as data analysis, MGAs will also increasingly use technology to drive underwriting decisions and enhance customer service. As a result, according to Mr Kumar, “they will need to balance the potential of these technologies against the heightened regulatory risk they present”.

This article first appeared in the April 2025 edition of the Asia Insurance Review

MNK Group has entered a new phase of growth with the launch of its unified brand, which integrates its broking, MGA, and risk-taking entities to ensure a consistent customer experience. The new group website (groupmnk.com) connects all underlying entities across the UK, Europe, North America, Latin America, Africa, the Middle East, and the Far East.

The Group’s specialist brands include MNK International, a Lloyd’s broker formerly known as MNK Re, which provides reinsurance support to clients in over 130 countries from multiple global offices. The new brand also encompasses Specialty MGA, a network of MGAs with offices in London, Milan, Casablanca, and Texas, offering capacity for specialty lines of business and hard-to-place risks.

MNK Seguros, an insurer based in San Jose, Costa Rica, along with Mekong Re, a facultative and treaty reinsurance company in Labuan, Malaysia, and Florida Re, a property and casualty insurance and reinsurance company in Florida, also form part of the Group. With businesses in fast-growing and dynamic markets worldwide, the new brand represents the next step in consolidating MNK Group’s growth, with numerous innovative products in the pipeline to support their global clients.

MNK Group plans to continue its growth through organic means as well as through mergers and acquisitions (M&A). Several M&A deals involving broking and insurance carriers are in the pipeline and will be announced soon.

Commenting on the new brand, Chairman of MNK Group, Manoj Kumar, said: “The launch of our new brand represents MNK Group’s rapid growth in recent years, providing a breadth of services to clients across all sectors.

“As we move forward together, our businesses are unified in terms of quality of service and in providing tailored and innovative solutions to meet the unique needs of every client, agent, broker, or underwriter. With our businesses based across the globe, our new brand represents our global vision and our desire to expand further.”

“This year, more businesses are set to be launched under the MNK family as we continue to navigate evolving markets and grow our presence worldwide.”

The brand will be launched at MNK Group’s annual industry event at The Sky Garden on Thursday, April 3rd.

Specialty MGA UK has hired Amir Hussain as Head of Political and Credit Risk, as it opens a new business line and looks to become a key player in the political risk market.

Hussain has worked as a credit analyst at Barclays, as well as underwriting for Lloyd’s syndicates including Brit and Hamilton. He specialises in political risk, contract frustration and credit risk, and has experience of building from scratch and managing a global book of business.

Initially, he will be focused on reaching out to the market and underwriting a sound book of business. However, over time Hussain and Specialty MGA UK will look to grow the team and increase the capacity they bring to the market.

Welcoming him to the team, MNK Group Chairman Manoj Kumar said:

“Amir’s background of rapidly developing business in international political risk means he is a fantastic addition to the team. Now is the right time for us to enter the market, given that there are global opportunities as demand for cover continues to rise.”

Amir Hussain, Head of Political and Credit Risk at Speciality MGA UK, said:

“Building a new line of business requires entrepreneurialism, energy and dedication and I have always enjoyed the challenge it presents. I’m excited to work with Manoj and the rest of the team, as this is a great opportunity to bring new capacity to the market and make political risk a significant part of Specialty MGA’s offering.”

A version of this CPD article was first published in the February 2025 edition of FA News.

Climate change is one of the most significant challenges of the 21st century and with the crisis continuing to escalate, extreme weather events are becoming more and more common. Africa specifically, loses up to 15% of its gross domestic product per capita every year due to climate change. Furthermore, the World Bank predicts that by 2050, climate change could force over 85 million Africans to migrate within their own countries due to its impact on resources and liveability.

As a result, climate adaption and mitigation will be essential for countries across the continent. Adaption focuses on adjusting policies, infrastructure and systems to decrease risk and the impact of climate change on individuals, businesses and economies. In contrast, mitigation involves reducing greenhouse gas emissions by slowing the rate of climate change, tackling the root cause through renewable energy projects and energy efficiency initiatives. For the insurance and reinsurance sectors, it will be important to find the right balance between the two, with adaption providing immediate resilience and mitigation helping reduce long-term climate risks.

In recent years, South Africa has seen the April 2022 KwaZulu-Natal floods, which was one of the costliest natural disasters on record for the country, with $3.6 billion (67 billion ZAR) in economic losses and $1.8 billion (34 billion ZAR) in insured losses. Coupled with this, drought continues to increase in severity and number, greatly impacting the agricultural sector and food security.

In response, insurance and reinsurance brokers have helped to improve climate adaption. Most notably, parametric insurance is one of the products that has seen rapid growth, ensuring that vulnerable communities are quickly and fairly paid out after catastrophes. As the parametric approach offers payouts based on pre-determined climate-related parameters, including weather data, the payout can be with the customer almost immediately. This has allowed farmers across Africa to receive rapid financial relief during droughts, particularly helping small farmers in remote areas where access is limited. With the increase in climate-related risks, this will form an essential part of climate adaption in the years to come.

Coupled with this, we have seen an increase in the adoption of drought-resilient crops and advanced technologies, such as soil moisture sensors and satellite-based crop monitoring, helping to optimise water usage, improve yields and reduce exposure to climate risks. In the Limpopo region in South Africa, for example, a pilot programme by local insurers and agri-tech businesses has helped farmers adopt sustainable irrigation systems, leading to a reduction in crop losses during the 2019 drought.

In order to tackle the causes of climate change, however, mitigation is needed alongside adaption. The insurance sector can play an important role in driving clean growth and enabling the transition to a low-carbon economy. Most notably, South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPP) has driven investment in wind and solar energy projects in recent years. Brokers can offer specialised coverage for these renewable energy projects, particularly construction risk insurance and operational liability coverage, protecting developers from risks including equipment failure, natural hazards and delays in completion.

However, according to the United Nations Environment Programme (UNEP), Africa receives only about 3% of global climate finance, which is not enough for meeting the continent’s mitigation targets. The International Energy Agency (IEA) estimates that transitioning Africa’s energy sector will require an investment of about $2.6 trillion (49 trillion ZAR) by 2040. Wealthier nations therefore have an equally important role in supporting Africa’s climate mitigation targets, most notably through funding and partnerships.

It is therefore clear that for the insurance sector, a balanced strategy is needed when it comes to adaption and mitigation. Adaption must be the foundation, ensuring that agricultural resilience is maximised, essential to reducing climate risk. Mitigation, on the other hand, will provide future stability, reducing the rate of extreme-weather events. Both provide important opportunities for partnerships with governments, farmers and NGOs to drive large-scale adaption and mitigation initiatives.

You can read the original article on the FA News website

Rapid digitalisation and automation, driven by the development of technology such as artificial intelligence, has had impacts on all areas of the economy, and the insurance industry is no different.

Insurance is often seen as highly traditional, and this brings its benefits, but firms will have to adapt and embrace technological innovation, or risk being left behind. The success of the fintech sector in South Africa, which accounts for 40% of all fintech revenue in Africa, shows the level of appetite for a more innovative approach to financial services. Expectations have risen and intermediaries need to meet them.

The role of intermediaries will continue to evolve as they seek to balance traditional practices with innovative technology. There are significant challenges to getting this balance right, but if firms can achieve it they will make themselves much more competitive than the rest of the market.

Implementing technology successfully

Using technology effectively requires leveraging digital tools to enhance services, and harnessing the power of big data and analytics to gain deeper insights into clients. This will allow intermediaries to more easily tailor insurance coverage to specific needs, preferences and risk profiles. Without technology, this level of personalisation will be much more challenging to achieve.

In addition, more than simply connecting customers to insurance policies, intermediaries can use technology to expand their role and enhance the value that they offer. Beyond placing coverage, technology can also be used to enhance an intermediary’s ongoing relationship with a client, by allowing them to identify emerging risks and collaborate on risk management strategies.

In the case of a loss-causing event, automating loss adjustment can provide significant benefits for clients. Faster payment will be critical to minimising disruption, especially as climate change means that the number of losses in South Africa, and around the world, is likely to rise. In the face of more regular floods, droughts and destructive storms, automation will improve both the accuracy and fairness of payouts.

Getting the balance right

Technology can also make the customer experience much simpler and faster, if automation is deployed to processes such as client communication and claims management. This obviously needs to be done carefully, and intermediaries should never forget that to a large extent their role is about developing a relationship with their client, so that they are trusted. Maintaining a human touch to their services remains important, even as technology takes on a greater role.

While clients are increasingly comfortable with, and in some cases demanding, more digital interfaces and processes, those who can find the correct balance while introducing technology to their services will benefit from the best of both worlds. Intermediaries should continue to provide easy access to support teams, which will remain an important touchpoint, especially when systems go wrong.

Firms should also remember the importance of local knowledge and expertise – having people with a deep understanding of local markets and the challenges they face will remain critical. While automation can speed up certain processes, teams on the ground who can act as an effective bridge between clients and underwriters will remain invaluable. It not only ensures clients access the products and strategies that are most suitable to them and their geography, but also offers efficiencies during the claims handling process. Knowledge of local legal systems and claims processes goes a long way towards making the client experience much easier.

Successfully embracing digital technologies while continuing to offer human expertise will ensure that clients see that they are getting value as well excellent advice. The key to getting the balance right lies in intermediaries positioning themselves as trusted advisers in a complex risk landscape, while also using technology to make it easier for clients to access that expertise.

You can read the original article on the FA News website