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Best’s Market Segment Report: AM Best Assigns Positive Outlook to Delegated Underwriting Authority Enterprise Market Segment

AM Best has assigned a positive market segment outlook to the global delegated underwriting authority enterprise (DUAE) segment, reflecting the rating agency’s expectation that this distribution channel will continue to strengthen on growing interest from capacity providers, along with the emergence of specialty expertise.

Technology, talent and diverse sources of capital continue to drive growth in this channel, according to a new Best’s Market Segment Report, titled, “Market Segment Outlook: Delegated Underwriting Authority Market.”

The report also notes some near-term concerns that could affect this segment, including a potential pullback of capital and risk-bearing capacity, as well as elevated reinsurance costs. Other detrimental factors include looming economic challenges, including stubbornly elevated inflation that will likely impact underwriting and reserve margins.

This initial market segment outlook marks another first for AM Best and the DUAE segment. Earlier this year, AM Best issued its methodology for Best’s Performance Assessment for DUAEs. AM Best defines a DUAE as a third party appointed by a (re)insurer, through contractual agreements, to perform underwriting, claims handling, and other administrative functions on behalf of its partners. DUAEs comprise entities such as managing general agents, cover holders, program administrators, program underwriters, underwriting agencies, and appointed representatives.

As an important distribution channel in the United States for risks not widely accepted by standard carriers, DUAEs are increasingly proving their ability to manage emerging risks such as cyber and climate by leveraging their expertise and intelligent use of data, as well as pivoting risk strategies in ways that traditional carriers are not accustomed to. DUAEs have become a relied upon distribution channel for insurers of all types and in all market conditions, with the United Kingdom and London markets being among the most developed in this area outside of the United States.

“Talent and technology have played a vital role in adding value to this market,” said Greg Williams, senior director, AM Best. “As larger insurance companies struggle with legacy systems and databases, the smaller DUAEs have proven to be agile implementing systems that can perform the risk selection, pricing, and underwriting that are central to insurers’ profitability.”

To access the full copy of this report, please visit

To view a video with AM Best Senior Director Greg Williams about the DUAE segment outlook, please visit

Leading AM Best analysts will review 2023 market segment outlooks for the U.S. insurance industry’s major segments, including DUAE and the global reinsurance industry in an online briefing scheduled for Tuesday, Dec. 13, 2022, at 2:00 pm EST. To register for the briefing, please go to

To view current Best’s Market Segment Outlooks, please visit

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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