MGA Confusion?

CGharrison

Hi,
I am a bit confused regarding what an MGA (managing general agent) actually does, are they part of a company or are they there own company.
Any feedback would be much appreciated.

paddyandstumpy

They are their own company and act on behalf of an insurer.

An MGA will have Underwriting Authority to make decisions within the remit of their binder and write policies for the insurer.

rs65

They can be part of another company. A lot of brokers and some insurers have their own MGA.

CGharrison

Thanks for the replies.
This may sound naive but how does an MGA for an insurer generate business that the insurer wouldn't otherwise?

rs65

An insurers mga can get capital elsewhere to write business it wouldn’t want to write 100%.

Other MGAs can open marketing channels that insurer can’t access directly. They also allow insurers to write business leaving the mga with staff and other costs.

Trentenders

MGA's often operate within niche sectors, where the insurers may not have expertise.