The hybrid fronting model is gaining traction in the re/insurance market, driven by a shift toward deeper risk alignment and the rapid expansion of MGAs.
As of 2026, approximately 25 major fronting carriers now operate in the U.S., with new ones launching frequently. The surge is tied to the expansion of MGAs, the tightening of reinsurance capacity, the growing need for efficient capital, and the availability of insurtech-enabled data modeling. Gallagher Re reports that hybrid fronting carriers generated nearly $28 billion in gross written premiums by the start of 2025, a significant portion of the total $100 billion-plus MGA market. A 2025 TMPAA survey reveals that 19% of program administrators now use hybrid fronting models for their operations.
What is a hybrid fronting carrier, and why is this model taking off now?
DEFINING A NEW MODEL
Hybrid fronting carriers are fully licensed and regulated insurance entities that provide rated paper to MGAs and program partners while retaining a share of the underwriting risk on their own balance sheets. Their retained portion of risk is typically 5% to 30%, and rated insurance paper is provided to MGAs/MGUs, captives, and programs. Hybrid fronting carriers use reinsurance or alternative capital to cover the remaining risk and maintain strong capital partner relationships with private equity firms or insurance-linked securities (ILS) to fund growth and operations.
Unlike traditional fronting carriers, which pass all risk along to reinsurers, hybrid fronting carriers retain a meaningful portion of exposure. In doing so, they share the risk and the incentives with other stakeholders across the insurance lifecycle. That retained risk drives tighter alignment with reinsurers and capital partners and positions hybrid fronts as not just enablers, but committed participants in the value chain. In other words, hybrid fronting carriers have more "skin in the game" than traditional fronting models. Ultimately, this sharing of risk results in more disciplined underwriting and oversight.
The hybrid fronting carrier model is becoming a more attractive option in the MGA and specialist program space, especially for launching new, niche, or complex insurance products quickly.
KEY DRIVERS OF THE HYBRID FRONTING CARRIER
There are multiple drivers behind the rise of the hybrid fronting carrier model. At the top of the list is capacity. Traditional reinsurers have been reducing capacity in challenging insurance markets, such as California, Texas, and Florida, where NatCat claims, including hurricanes, floods, and wildfires, have led them to reduce their exposure to tail risks. Others are pulling out of these markets entirely. As a result, demand for alternative capacity is rising as traditional insurers shift risk appetite or exit markets.
Hybrid fronting carriers are also filling an expanding gap in the excess & surplus (E&S) insurance market by serving as a bridge between specialized, high-risk, or niche business produced by Managing General Agents (MGAs) and the risk-bearing capital of reinsurers.
Another key driver is the acceleration of MGA growth, not just in the U.S., but globally. MGAs are growing rapidly and seeking flexible partners to develop new products and expand capacity. Hybrid fronting carriers supply MGAs with the rated paper and shoulder some of the risk, enabling them to launch niche or specialist programs, like cyber risks or complex casualty lines, at speeds much faster than traditional carriers with legacy systems. They are essential for navigating "volatile and emerging risks" where traditional insurers may have pulled back. This is crucial to MGAs' success, where the first to market with an innovative product wins the race.
Alternative capital fills these gaps for E&S insurance organizations and MGAs left by shrinking traditional supply. For capital providers, such as private equity and ILS investors, the hybrid model provides an efficient, scalable way to enter insurance markets without partnering with a traditional, full-scale carrier. Additionally, it streamlines cross-border expansion for MGAs by managing complex local licensing and regulatory compliance. Private equity and ILS investors are interested in hybrid fronts as capital-efficient, lower-risk insurance platforms.
BENEFITS FOR ALL PARTIES
Who wins with this model? Basically, all parties involved benefit. Hybrid fronting carriers present significant benefits to MGAs, program managers, and reinsurers. A shared alignment of interests ensures better underwriting and oversight, faster market access, and greater capital efficiency.
Other key benefits include:
- Multi-year capacity stability: While traditional reinsurers are tightening capacity, hybrid fronts can access a broader investor base. MGAs can reduce their reliance on a small group of traditional reinsurers.
- Faster product launches and distribution: Hybrid fronting carriers provide the necessary AM Best or S&P rating and state licensing required for MGAs to write business immediately. This bypasses the multi-year process an MGA would otherwise face to become a standalone licensed insurer.
- Access to reinsurance and capital markets: Unlike traditional insurers, which can face rigid internal governance, hybrid fronts act as conduits to global reinsurance markets. This provides MGAs with a broader pool of capital to back specialized or niche programs.
- Higher transparency and potential for profit-sharing between stakeholders: Unlike traditional models, where data is exchanged in fragmented silos using PDFs or monthly reports, modern hybrid carriers are built on technology and use unified underwriting command centers, making them extremely transparent. Because the hybrid front shares in any losses, it has a financial incentive to perform the same level of due diligence as a standard carrier, including thorough analytic and exposure reviews.
- Lower cost base compared to traditional carriers: The best hybrid fronts operate as lean, technology-driven entities that delegate expensive operational functions to specialized partners.
Fronting carriers play a crucial role in enabling MGA distribution by providing regulatory paper, compliance frameworks, reporting mechanisms, and risk-sharing structures necessary to launch new programs.
TECH-FIRST HYBRID FRONTING CARRIERS WILL WIN
However, with this model comes new complexity. Hybrid fronting carriers often manage numerous MGA relationships, demanding coordination of complex capacity flows, diverse systems, multi-territory compliance, and increasing calls for reporting clarity. These operational and regulatory demands frequently exceed the capabilities of older, legacy carrier infrastructure.
To thrive in this environment, hybrid fronting carriers require more than rated paper, risk, and capital. They'll need modern infrastructure that can support:
- Real-time digital dashboards provide immediate visibility into MGA, program, and portfolio performance, enabling faster, data-driven underwriting decisions and proactive intervention on underperforming segments. Because hybrid fronts have their own capital at stake, they need this transparency to effectively manage their own risk.
- Data transparency for reinsurers, regulators, and capital partners alike fosters trust, ensures compliance, and strengthens long-term capacity relationships.
- Automated bordereaux processing and streamlined delegated authority workflows reduce operational overhead, boost accuracy, and ensure audit readiness. Further, using a single, shared platform eliminates the need for manual bordereaux reporting, giving hybrid fronting carriers better data and a single source of truth for their reinsurance partners.
- Integration with reinsurers, TPAs, and third-party systems that streamline operations, accelerate speed to market, and enhance collaboration across the entire value chain.
- Scalable platforms that accommodate multi-entity, multi-jurisdiction operations — supporting rapid growth across regions, lines of business, and regulatory regimes without losing control.
With hybrid fronting carriers, technology isn't a support function—it's part of their very structure as an organization. It's an enabler of profitable growth, faster onboarding, and regulator-ready reporting. Carriers that invest early in building this connected foundation will be best positioned to scale. And those that can scale will be the most successful as they court private equity and ILS investors while bringing innovative MGAs and risk products to market.
