Rating agency AM Best has indicated in a new report that fronting companies are expected to engage more frequently with the insurance-linked securities (ILS) market to drive capacity diversification using catastrophe bonds, sidecars and collateralized reinsurance structures.
In its report, AM Best notes that the property and casualty fronting market continued to grow at a healthy rate during 2025, driven in part by the sustained expansion of MGA-oriented business.
The agency highlighted how fronting has expanded over time to include much broader sets of entities, such as managing general agents (MGAs). The agency further clarified that over the last couple of years, there has been a trend for some fronts to assume business from a variety of entities, including other insurers, reinsurers, and state facilities.
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