In March of 2021, AM Best released a new draft methodology for evaluating Delegated Underwriting Authority Enterprises (DUAEs). This methodology is a Performance Evaluation (PA). DUAE is a blanket term for third party entities appointed by insurers or reinsurers to perform various functions on behalf of the insurer or reinsurer. Typical third party entities are MGAs, MGUs, and program administrators who perform functions from binding coverage to settling claims.
While DUAEs are not new to the industry, they are becoming more important as a higher portion of revenue is being generated through them. The gross written premium generated from DUAEs has increased over 200% in the past decade from $17 Billion to approximatly $55 Billion in 2021, and is expected to surpass $60 Billion in 2022.