Insurance Brokers (MMC, AON, AJG, WTW, BRO)

[longterminvestor]

Greenberg/Chubb also fired a shot across the bow.  Including a Substack found and Greenberg's letter referenced.  #stayfrosty

2025-chubb-letter-to-shareholders-from-evan-greenberg.pdf Chubb's CEO Just Challenged the Entire MGA Model.pdf

[dwy000]

33 minutes ago, longterminvestor said:

Greenberg/Chubb also fired a shot across the bow.  Including a Substack found and Greenberg's letter referenced.  #stayfrosty

2025-chubb-letter-to-shareholders-from-evan-greenberg.pdf 5.08 MB · 8 downloads Chubb's CEO Just Challenged the Entire MGA Model.pdf 140.81 kB · 6 downloads

If I read and understand it correctly, Greenberg is basically saying that AI can underwrite 85% of the activity more effectively and efficiently than the MGA's so they will bring it back in house.  Which leads to 2 questions: a) how were they more profitable and efficient for Chubb than in house in the first place; and b) why can't the MGA's just do the same and use AI to automate and retain the advantage themselves and continue using the underwriters for placement?

[longterminvestor]

Gonna defer to the GOAT and his opinions on this.  Teed up to point where Mr. Buffett references the "General Agency System" which is parlance for MGA (Managing General Agent).  Folks have been predicting the death of MGA's since the 1960's.  NICO still TODAY, 60 years later, writes business through MGA's.  NICO may have some pockets of direct biz or other lines in different channels - MGA's are a huge part of NICO's sauce.  There are tons of reasons why MGA's provide value.  

 

See below

 

[UK]

3 hours ago, longterminvestor said:

Gonna defer to the GOAT and his opinions on this.  Teed up to point where Mr. Buffett references the "General Agency System" which is parlance for MGA (Managing General Agent).  Folks have been predicting the death of MGA's since the 1960's.  NICO still TODAY, 60 years later, writes business through MGA's.  NICO may have some pockets of direct biz or other lines in different channels - MGA's are a huge part of NICO's sauce.  There are tons of reasons why MGA's provide value.  

 

See below

 

Thanks for comment and great video!

[Hektor]

8 hours ago, longterminvestor said:

Gonna defer to the GOAT and his opinions on this.  Teed up to point where Mr. Buffett references the "General Agency System" which is parlance for MGA (Managing General Agent).  Folks have been predicting the death of MGA's since the 1960's.  NICO still TODAY, 60 years later, writes business through MGA's.  NICO may have some pockets of direct biz or other lines in different channels - MGA's are a huge part of NICO's sauce.  There are tons of reasons why MGA's provide value.  

 

See below

 

Thanks @longterminvestor

[dwy000]

10 hours ago, longterminvestor said:

Gonna defer to the GOAT and his opinions on this.  Teed up to point where Mr. Buffett references the "General Agency System" which is parlance for MGA (Managing General Agent).  Folks have been predicting the death of MGA's since the 1960's.  NICO still TODAY, 60 years later, writes business through MGA's.  NICO may have some pockets of direct biz or other lines in different channels - MGA's are a huge part of NICO's sauce.  There are tons of reasons why MGA's provide value.  

 

See below

 

Thanks for that.

 

But Im hoping to get your broader view since Greenberg is saying that Chubb is taking a stand here and this time is different.  As you've framed it, MGA's are similar to giving the broker "the pen" - essentially allowing them to structure and write, manage and administer policies just using the insurer as a regulated balance sheet.  And they get a lot of extra fees for it.

 

If Chubb says that the MGA is overpaid for that service relative to what they can do in house using AI, is he saying they are basically going back to the old broker/underwriter relationship and cutting out everything but the origination/sales commission?  Can they do that without eliminating a large portion of the business that currently comes through MGA's?  Why wouldn't MGA's just switch to another fronting insurer or balance sheet?  And why can't the MGA/broker just do the AI part themselves?

 

It doesn't appear to affect the actual risk cost so loss ratios would stay the same but the lower administration costs would be passed along in lower premiums (any savings would be competed away among underwriters).

[gfp]

19 hours ago, longterminvestor said:

Gonna defer to the GOAT and his opinions on this.  Teed up to point where Mr. Buffett references the "General Agency System" which is parlance for MGA (Managing General Agent).  Folks have been predicting the death of MGA's since the 1960's.  NICO still TODAY, 60 years later, writes business through MGA's.  NICO may have some pockets of direct biz or other lines in different channels - MGA's are a huge part of NICO's sauce.  There are tons of reasons why MGA's provide value.  

 

See below

 

 

 

I always thought the difference between a "MGA" - Managing General Agent - and the type of general agency system or wholesale brokerages we are normally talking about is that with a MGA the Insurance carrier has delegated their "underwriting pen" to the MGA.  I'm sure NICO has done that in specific relationships, but I think it was probably pretty rare and required a special relationship.

 

This is the only one I remember but their may have been some others

https://kemahcapital.com/kemah-capital-announces-underwriting-agreement-with-members-of-the-berkshire-hathaway-group-of-insurance-companies.html

 

Most of the time I remember NICO delegating their underwriting authority to another entity it has been something like an automatic quota share agreement - like Insurance Australia - IAG.  They ended that, not sure how it went.  

[Eldad]

@dealraker I know you said you would be loading up on BRO if you didn’t already have so much. 
 

I was wondering where you would rank the current price on the fat pitch scale 1-10. 

[Eldad]

@dealraker I know you said you would be loading up on BRO if you didn’t already have so much. 
 

I was wondering where you would rank the current price on the fat pitch scale 1-10. 

[dwy000]

Not sure if this is the right place to ask, but this topic does get most of the insurance investors following....

 

I've been doing a lot of reading lately on Lloyd's (the London insurance organization).  My wife looks at this stuff and just shakes her head as its the most boring thing she's ever seen, but I find it fascinating.  Is anyone here a Lloyd's Name or have you participated directly or indirectly in any Lloyd's syndicate?  Or as a broker?  Would love to hear about the background and experience. 

 

Given that (from everything I've read) you dont need to put up cash, you just need to hold or pledge a dollar amount of liquid assets that can still be invested in other things, it's double dipping on income and can be quite lucrative. 

[Marco Van Basten]

1 minute ago, dwy000 said:

Not sure if this is the right place to ask, but this topic does get most of the insurance investors following....

 

I've been doing a lot of reading lately on Lloyd's (the London insurance organization).  My wife looks at this stuff and just shakes her head as its the most boring thing she's ever seen, but I find it fascinating.  Is anyone here a Lloyd's Name or have you participated directly or indirectly in any Lloyd's syndicate?  Or as a broker?  Would love to hear about the background and experience. 

 

Given that (from everything I've read) you dont need to put up cash, you just need to hold or pledge a dollar amount of liquid assets that can still be invested in other things, it's double dipping on income and can be quite lucrative. 

Except imagine a nuclear bomb hits London.  Markets collapse and your insurance asks you for capital to pay out the loss

[dwy000]

14 minutes ago, Marco Van Basten said:

Except imagine a nuclear bomb hits London.  Markets collapse and your insurance asks you for capital to pay out the loss

Unless your syndicate insured London buildings against nuclear attack it would have zero impact on your Lloyd's underwriting.  You dont put all your assets at risk - they wouldn't allow that - I'm talking about using a portion of your net worth (say 5-10%).

[Spekulatius]

5 hours ago, dwy000 said:

Not sure if this is the right place to ask, but this topic does get most of the insurance investors following....

 

I've been doing a lot of reading lately on Lloyd's (the London insurance organization).  My wife looks at this stuff and just shakes her head as its the most boring thing she's ever seen, but I find it fascinating.  Is anyone here a Lloyd's Name or have you participated directly or indirectly in any Lloyd's syndicate?  Or as a broker?  Would love to hear about the background and experience. 

 

Given that (from everything I've read) you dont need to put up cash, you just need to hold or pledge a dollar amount of liquid assets that can still be invested in other things, it's double dipping on income and can be quite lucrative. 

What would be your edge underwriting anything? If you don’t know who is the patsy on the table, it’s you.

[dwy000]

1 hour ago, Spekulatius said:

What would be your edge underwriting anything? If you don’t know who is the patsy on the table, it’s you.

You're not pricing anything, you are the capital.  The managing agent of the syndicate makes the pricing and underwriting decisions.  Most of these syndicates have been around for a hundred years and have excellent track records. And almost nobody who becomes a Name ever sells out. 

 

Its basically pledging existing invested assets to back insurance underwriting.  You continue to get the earnings on the pledged assets and you also earn the underwriting and investment profits from the insurance. All as a silent partner.  

[thowed]

All I can say from a UK perspective is that it works until it doesn't, but when it doesn't it's a nasty tail risk.

 

Growing up, you heard about the Lloyds names making money so easily for years, but then one day, you heard that they were having to sell their houses because that tail risk happened.

 

If you really understand it, fine, but I've seen the bodies taken out, so be careful.

[Sweet]

Wasn’t aware of this until dwy mentioned it yesterday, but from reading the structure has fundamentally changed.  Those Lloyd names lost everything, now it’s done through a limited liability structure so only the capital in that structure is at risk.  That’s my understanding of it.

[Spekulatius]

7 hours ago, dwy000 said:

You're not pricing anything, you are the capital.  The managing agent of the syndicate makes the pricing and underwriting decisions.  Most of these syndicates have been around for a hundred years and have excellent track records. And almost nobody who becomes a Name ever sells out. 

 

Its basically pledging existing invested assets to back insurance underwriting.  You continue to get the earnings on the pledged assets and you also earn the underwriting and investment profits from the insurance. All as a silent partner.  

Ok, so it all depends on picking the right managing agent or the right managing agent picking you. I don’t think it’s easy to get access to good one with a long track record- why would it be? Sort of like VC agents.

 I have also read somewhere that the limited liability structure has replaced the unlimited guarantee structure (with your entire net worth at risk). Thats makes it much more palpable.

[dealraker]

On 4/1/2026 at 11:05 AM, Eldad said:

@dealraker I know you said you would be loading up on BRO if you didn’t already have so much. 
 

I was wondering where you would rank the current price on the fat pitch scale 1-10. 

Eldad, for whatever reason I'm just now seeing this post.  As I've mentioned previously I've been tasked with overseeing a trust for the next few years from the grandparents of the two young people (now 24 and 28, one an architect the other the managing editor of Pharmacy Times - as you can tell I'm proud of them- they are my blood relatives too) that grew up in my home.  I also mentioned here that I bought AJG, not much of it, for that trust some time ago at $185 per share.

 

In the last month I have added several stocks using the cash to that trust, mostly AMZN, MSFT, META, lesser amounts of AVGO and AMD.  I mention those because it relates in a relative size mode to what I sense or feel about the insurance brokerage business ----and that I'm (as usual) reasonably unsure and not willing to "load up" or whatnot.  

 

But anyway I have added these stocks - and it shows I have no belief that I have some great knowledge or bias as to which one will do best.  The prices today are up a smidge from what I paid, but not much, and I bought equal amounts of them:

 

AJG

BRO

WTW

RYAN

MRSH

AON

 

And a small amount of BWIN at a el-cheapo price.

 

FYI as to the private market:  I am a 1/6th owner of an insurance aggregator that is 4/6th's owned by the man who was one of the three partners with me long ago- this guy still owns his local insurance selling business that mostly- but not entirely- uses ERIE.  We are getting competing offers for this business, it seems quite intense relative to the past, at prices that do not reflect the weakness we are experiencing in in the stocks of the publicly traded brokers.

 

He also tells me he is still getting the same offers and same interest from those seeking to acquire his 45 person firm- not the aggregator- but his brokerage.

 

Also by the way...and this again relates to my wild ass guesses as to the affect of AI on all kinds of things including the credit extended to software that is currently so popular to worry about...I added smaller amounts to those trust accounts of this stuff below:

 

APO

ARES

BX 

BN

BAM 

KKR

 

So the weakness in the insurance brokers is I guess two-founded, AI and insurance rates.  This double whammy should be offering a decent entry price, something many had been looking for for years.  As always when the lower prices come they always come with a legitimate worry.

 

Unlike others, I come from a newspaper family.  I saw that entity go from the most lucrative business in the community to bottom of the barrel  garbage.  So I'm never as over-the-top confident as you read most others in their presentations.  I'm a gray guy in a world of black and white.

 

 

 

 

 

 

Edited April 17 by dealraker

[MMM20]

1 hour ago, dealraker said:

Unlike others, I come from a newspaper family.  I saw that entity go from the most lucrative business in the community to bottom of the barrel  garbage.  So I'm never as over-the-top confident as you read most others in their presentations.  I'm a gray guy in a world of black and white.

 

One of the many reasons your posts are valuable. Thanks for sharing.

[dwy000]

7 hours ago, thowed said:

All I can say from a UK perspective is that it works until it doesn't, but when it doesn't it's a nasty tail risk.

 

Growing up, you heard about the Lloyds names making money so easily for years, but then one day, you heard that they were having to sell their houses because that tail risk happened.

 

If you really understand it, fine, but I've seen the bodies taken out, so be careful.

They've changed the structure since the famous blow up days.  It now has limited liability so youre capped on what you can lose. 

[thowed]

Ah, thanks, good to get more up to date info!

[Eldad]

4 hours ago, dealraker said:

Eldad, for whatever reason I'm just now seeing this post.  As I've mentioned previously I've been tasked with overseeing a trust for the next few years from the grandparents of the two young people (now 24 and 28, one an architect the other the managing editor of Pharmacy Times - as you can tell I'm proud of them- they are my blood relatives too) that grew up in my home.  I also mentioned here that I bought AJG, not much of it, for that trust some time ago at $185 per share.

 

In the last month I have added several stocks using the cash to that trust, mostly AMZN, MSFT, META, lesser amounts of AVGO and AMD.  I mention those because it relates in a relative size mode to what I sense or feel about the insurance brokerage business ----and that I'm (as usual) reasonably unsure and not willing to "load up" or whatnot.  

 

But anyway I have added these stocks - and it shows I have no belief that I have some great knowledge or bias as to which one will do best.  The prices today are up a smidge from what I paid, but not much, and I bought equal amounts of them:

 

AJG

BRO

WTW

RYAN

MRSH

AON

 

And a small amount of BWIN at a el-cheapo price.

 

FYI as to the private market:  I am a 1/6th owner of an insurance aggregator that is 4/6th's owned by the man who was one of the three partners with me long ago- this guy still owns his local insurance selling business that mostly- but not entirely- uses ERIE.  We are getting competing offers for this business, it seems quite intense relative to the past, at prices that do not reflect the weakness we are experiencing in in the stocks of the publicly traded brokers.

 

He also tells me he is still getting the same offers and same interest from those seeking to acquire his 45 person firm- not the aggregator- but his brokerage.

 

Also by the way...and this again relates to my wild ass guesses as to the affect of AI on all kinds of things including the credit extended to software that is currently so popular to worry about...I added smaller amounts to those trust accounts of this stuff below:

 

APO

ARES

BX 

BN

BAM 

KKR

 

So the weakness in the insurance brokers is I guess two-founded, AI and insurance rates.  This double whammy should be offering a decent entry price, something many had been looking for for years.  As always when the lower prices come they always come with a legitimate worry.

 

Unlike others, I come from a newspaper family.  I saw that entity go from the most lucrative business in the community to bottom of the barrel  garbage.  So I'm never as over-the-top confident as you read most others in their presentations.  I'm a gray guy in a world of black and white.

 

 

 

 

 

 

Thanks @dealraker I bought BRO and it’s now about 3% for me and I think I’m happy there for now. 

[Sweet]

52 minutes ago, Eldad said:

Thanks @dealraker I bought BRO and it’s now about 3% for me and I think I’m happy there for now. 

Do you have it as a basket of brokers, or just owning what you regard as the best performer?

[Eldad]

On 4/17/2026 at 11:42 AM, Sweet said:

Do you have it as a basket of brokers, or just owning what you regard as the best performer?

No just BRO. 
 

Marsh and AON can’t grow as fast and AJG doesn’t have the insider ownership is as simple as my reasoning was. 

[Spekulatius]

5 hours ago, Eldad said:

No just BRO. 
 

Marsh and AON can’t grow as fast and AJG doesn’t have the insider ownership is as simple as my reasoning was. 

I have added to AJG rather than BRO because they have outperformed  BRO operationally quite a bit. Also AJG is only a bit more expensive than BRO currently so for me AJG actually looks like  the better deal right now. If Insider ownership is your thing, look at RYAN as well.

Edited April 19 by Spekulatius