Definition:Managing general agent (MGA)

📋 Managing general agent (MGA) is a specialized intermediary that operates with underwriting authority granted by one or more insurance carriers. Unlike a traditional broker or agent who simply sells policies, an MGA can bind coverage, set premium rates, appoint sub-agents, and often handle claims — functioning almost as an outsourced underwriting division for the insurer. MGAs typically focus on niche lines of business where their concentrated expertise gives them an edge over generalist carriers.

⚙️ An insurer grants an MGA a formal delegation of authority, usually defined by a binding authority agreement that specifies the classes of risk, geographic territories, premium limits, and policy forms the MGA may use. Within those boundaries, the MGA underwrites and issues policies on behalf of the carrier, collecting premiums and remitting them according to an agreed schedule. The carrier retains the ultimate risk on its balance sheet, while the MGA earns commission or a share of underwriting profit — aligning both parties' incentives toward disciplined risk selection.

💡 The MGA model has become a magnet for insurtech innovation because it lets entrepreneurial teams launch new insurance products without building a fully licensed carrier from scratch. For insurers, partnering with an MGA opens access to specialty markets and distribution channels that would be costly to develop internally. As a result, the MGA channel continues to grow rapidly, attracting significant investment from both traditional reinsurers and venture capital.

Related concepts

• Definition:Delegated underwriting authority (DUA)
• Definition:Binding authority agreement
• Definition:Capacity provider
• Definition:Bordereaux
• Definition:Insurtech
• Definition:Algorithmic underwriting