Expanding into the United States insurance market is often considered the holy grail for ambitious and scaling insurance businesses. The U.S. remains the largest insurance market globally, with gross written premiums (GWP) expected to reach approximately USD 4.1 trillion by the end of 2025.
However, entering the U.S. market is not without its challenges. The country’s fragmented, state-by-state regulatory environment makes expansion more complex than in many other regions.
Before embarking on a U.S. growth journey, it’s crucial to ensure your business is fully prepared. Below are the key considerations for any MGA or insurtech planning to expand stateside.
Your first step should be to determine how you plan to enter the U.S. market. Define your approach across three core dimensions: distribution, capacity, and product.
Distribution: Will you operate as a wholesale MGA (distributing via licensed U.S. brokers) or a retail MGA (selling directly to consumers)?
Capacity: Will you underwrite through a traditional delegated authority model, or adopt the program administrator model (partnering with a fronting carrier and reinsurance providers)?
Product: Will your offering be on an admitted basis (filed and approved by state regulators) or non-admitted / surplus lines basis (for more niche or complex risks)?
These are critical strategic decisions that will shape your licensing approach, compliance obligations, and go-to-market timeline.
Top Tip:
If you plan to offer admitted insurance products, engage an experienced U.S. technical partner early to assist with state-by-state rate and form filings—these can be time-consuming and vary widely between states.
Begin by establishing your legal entity in your chosen state of incorporation, ensuring you select the most suitable structure (LLC is often preferred by smaller insurance businesses).
Check the Secretary of State’s website to confirm your chosen business name is available.
Conduct federal trademark checks to protect your brand.
Appoint a registered agent—the individual or entity responsible for receiving legal and tax documents on behalf of your company.
Register with the IRS for an Employer Identification Number (EIN).
Obtain tax advice to ensure compliance with all relevant federal and state tax registrations.
Once incorporated, you can hire your first employee; ideally someone who can serve as your Designated Responsible Licensed Producer (DRLP). This role is required before you can apply for insurance licenses.
Top Tip:
Be aware of state-specific restrictions on naming conventions. Some states prohibit the use of certain words or phrases in insurance business names.
In the U.S., insurance is regulated at the state level, not federally. Each state has its own licensing requirements and compliance rules for insurance entities, which can make navigating the regulatory environment complex.
You will typically need a producer license in every state where you intend to operate, and you may need a separate licence if you intend to write excess and surplus lines business ('E&S'). If your business handles claims as well as underwriting, you may also need separate claims licenses, again on a state-by-state basis.
Because some states recognise others’ licensing standards, it’s wise to designate a “home state” that is widely accepted by other state Departments of Insurance (DOIs) - this is know as 'state reciprocity'.
Before applying for your entity license, you must appoint a Designated Responsible Licensed Producer (DRLP); a qualified individual who has passed the necessary exams and holds equivalent or higher licensing authority. The DRLP is accountable for compliance across all insurance operations.
Top Tip:
Review your target customer base and start small; focus on a handful of key states such as New York, California, Texas, and Florida, where large customer segments are concentrated. Once these key state licences have been secured, build out your fifty state licensing in your scale-up phases.
In the U.S., MGAs typically underwrite on behalf of either:
Admitted carriers, for standard lines of business; or
Non-admitted / excess and surplus (E&S) carriers, for specialised or hard-to-place risks.
You may partner with both, but must maintain clear operational segregation to ensure compliance with each regulatory regime.
Common capacity options include:
Partnering with a U.S. insurer.
Partnering with a fronting carrier, supported by reinsurance, on a program-administrator basis.
Becoming a Lloyd’s coverholder, underwriting on behalf of Lloyd’s syndicates.
Each approach carries distinct advantages and operational implications. Evaluate these carefully before finalising your capacity strategy.
Top Tip:
One of the greatest benefits of establishing a U.S. subsidiary or branch is access to a broader pool of domestic capacity, something generally unavailable to entities writing U.S. business from abroad.
While capital requirements for MGAs and insurtechs are relatively light, ensure you have sufficient liquidity to cover state licensing fees, renewals, compliance costs, and initial operating expenses.
Some states impose minimum capital thresholds, so plan accordingly. Additionally, be prepared for ongoing costs tied to licensing maintenance and regulatory reporting.
Assuming you’ve completed your market research and strategic planning, you can expect the following:
Entity formation, operational setup, and initial state licensing: 6–12 months.
Scaling phase (expanding state footprint and growing premium base): 18–24 months.
If you’d like to explore your U.S. expansion strategy in more detail—or discuss the nuances of licensing, partnerships, or capacity models—contact us for a complimentary preliminary consultation.
Key Takeaways
The U.S. is the largest and most lucrative insurance market globally, but entry requires meticulous planning.
Success depends on choosing the right market entry strategy, navigating state regulation effectively, and securing the right capacity partnerships.
A focused, phased approach—starting with a few key states—can help your MGA or insurtech scale sustainably in the world’s most competitive insurance market.
