What is an MGA?
A Managing General Agent (MGA) is an agency whose primary function and focus is the provision of underwriting services and whose primary fiduciary duty is to its Insurer principal.
This method of operating is particularly concentrated at the SME end of the market, a potentially vulnerable class of customers, and includes compulsory classes like motor insurance and employers’ liability. Some of the most important professional firms in the country buy their professional indemnity insurance through MGAs.
Like many insurance companies, most MGAs will only work with insurance brokers to develop their business and do not accept direct enquiries.
Why do Insurance Companies work with MGAs?
Insurers use MGAs because their expertise in specialised types of insurance means the carrier doesn't have to develop the same expertise in-house. MGAs' underwriting authority lets insurers expand their reach and stay nimble in the ever-changing insurance business.
MGA market share
Over 300 MGAs currently underwrite over 10% of the UK’s £47 billion general insurance market premiums. They have become an important part of the insurance landscape in the UK bringing considerable additional competition, mainly to the SME sector.
Examples of MGAs specialising in Professional Indemnity Insurance
- Prosure Solutions
- Manchester Underwriting
- Pen Underwriting
Examples of Insurance Companies
- Hiscox Insurance
- Aviva Insurance
- Travelers Insurance
Financial Rating of MGAs
The financial rating of the MGA comes from its market capacity provider and not the MGA itself. For example, at the time of writing Manchester Underwriting’s capacity provider is Great Lakes which A M Best rate as A+ (superior).