MGA in insurance

What is MGA in insurance?

A Managing General Agent (MGA) is described by International Risk Management Institue (IRMI) as a type of insurance agent/broker. Unlike traditional agents or brokers, an insurer authorised them for underwriting on behalf of a delegated underwriting authority (DUA).

What are the responsibilities of an MGA?

A Managing General Agent (MGA) company can have several responsibilities depending on the type of MGA. The most important ones include:

• Managing a profitable portfolio
• Maintaining a good loss ratio
• Growing premium income
• Reducing claims incurred

What is the difference between an MGA and MGU?

An MGU is a Managing General Underwriter. This is a company that manages multiple MGAs, connects them to capacity and doesn’t underwrite directly themselves. An MGA on the other hand, reports to the specific capacity provider(s) and underwrite directly themselves.

What is required for an MGA in insurance to operate?

• To be regulated by a financial authority such as the Financial Conduct Authority (FCA).
• To have a signed capacity agreement with insurers to take on risks.
• To either use or acquire underwriting software, this is usually a required point for a signed capacity agreement.
  

What insurance-related tools does MGA use?

In an ideal world, an MGA will use end-to-end underwriting software so they can manage their entire business. When referring to end-to-end consists of quoting, using a rating engine, policy administration, reporting, accounting and claims management. Additionally, there are enrichment tools which assist in automating the underwriting process.