Climate-Focused MGAs Are Insuring What No One Else Will

Every crisis is an opportunity. Climate change is scrambling US insurance markets, making it more expensive for traditional carriers to underwrite homes in areas plagued by rising flood, wildfire, and storm risks. From 2021 to 2024, annual insurance premiums for a typical homeowner increased by an average of $648 (24%) nationwide. In certain pockets of the country, the risks are so great that traditional insurers are cutting coverage to lower their exposure — or pulling out altogether. 

The chaos has spawned a new generation of specialized insurance intermediaries. Managing general agents, or MGAs, are carving out niches in exactly the markets the established giants are fleeing, or raising prices so much homeowners balk: the wildfire corridors of California, Colorado, and Texas, the flood zones of Florida and New England, and the storm-lashed shores of the Gulf Coast. They come armed with advanced risk analytics and an appreciation of property-level adaptation science, using this knowledge to spot profitable clusters of insurance risk overlooked by the large underwriters.

“MGAs are innovation petri dishes,” says Geoffroy Bablon, Co-founder and CEO at Althea, an MGA launching in Alabama this fall focused on wind and storm risks. “Things can happen faster in an operating culture that is potentially a lot more dynamic than found in large carriers — and particularly on the climate side we need that right now.”

But the proliferation of start-ups at this hazy frontier is giving rise to new concerns about consumer protection and transparency, and could further complicate the work of already overstretched state-level insurance departments. In a new report, Climate Cabinet — a non-profit and political action committee — underlined the challenges MGAs and other intermediaries bring to regulatory oversight, and the risks they could inject into the broader market. “Insurers have been effective at using MGAs to evade regulatory scrutiny in numerous instances,” says Jordan Haedtler, a climate financial policy consultant and one of the authors of the report.