Managing general agent (MGA)

~3 min read

Category: Insurance market and distribution · Reviewed by the Apex broking team · Last reviewed 2026-08-21

In short: A managing general agent is a firm that an insurer authorises to underwrite business in its name. The MGA sets terms, issues documents and takes premium, but the risk sits with the insurer behind it. For a UK commercial buyer the practical points are that the MGA is the insurer’s agent rather than yours, that its authority has defined limits, and that the security you are actually buying is the carrier standing behind the binder.

Category: Insurance market and distribution Also known as: MGA, managing general underwriter, MGU, underwriting agency Related concepts: delegated authority, claims handling agreement

Definition

A managing general agent (MGA) is an intermediary to which an insurer has delegated underwriting authority. Rather than referring each risk to the carrier, the MGA accepts or declines business itself, prices it, issues policy documentation and collects premium — all within the boundaries of a written contract. The insurance contract that results is between the policyholder and the insurer, not the MGA. The MGA earns a commission, and often a profit commission linked to how the account performs.

Some MGAs also hold delegated claims authority, in which case they handle notifications, reserve, and settle up to agreed limits. Others underwrite only and pass claims to the insurer or to an appointed claims handler. In the London market an MGA holding delegated underwriting authority from a Lloyd’s managing agent is called a coverholder, and the contract is a binding authority.

How the authority is drawn

Everything an MGA can do is set out in the delegated authority agreement. In practice the document defines the classes of business and territories in scope, maximum limits and sums insured, permitted wordings and rating, excluded trades or perils, referral triggers where the MGA must go back to the carrier, and the reporting the MGA owes — typically monthly bordereaux of risks written and claims paid.

Two limits matter more than the rest. The first is the referral list: risks the MGA cannot bind without express agreement, which is why an MGA that quoted quickly on an ordinary risk may take much longer on an unusual one. The second is the term. Binders are written for a period, often a year, and are not guaranteed to renew. If a carrier withdraws capacity, an MGA can lose the ability to renew an entire book at short notice, and policyholders find themselves moved to a different insurer at renewal.

Why MGAs exist

The model exists because specialist underwriting expertise and insurer balance sheets do not always sit in the same organisation. An MGA can build deep knowledge of a narrow trade — a particular profession, a construction niche, a class of property — and offer a carrier a ready-made portfolio without the carrier building that team itself. For the buyer the visible benefit is usually a wording and an appetite tuned to the trade, and faster decisions than a referral-based route.

The corresponding weakness is concentration. A niche book placed through one MGA depends on one binder with one carrier. When that capacity is withdrawn, everyone in the niche moves at once, which is a familiar pattern in hard markets for professional indemnity and for higher-risk property.

FCA implications for the broker relationship

An MGA is normally an FCA-authorised firm carrying on insurance distribution. The regulatory point that matters most is agency. When the MGA is exercising its binder it is acting for the insurer. Your broker acts for you. That distinction drives several practical consequences.

Disclosure and knowledge. What you tell the MGA in a proposal is told to the insurer, because the MGA has the insurer’s authority to receive it. What you tell your broker is not automatically told to the insurer at all.
Conflicts. Where the same corporate group contains both a broker and an MGA, the group is on both sides of the transaction. The FCA expects such conflicts to be identified, managed and disclosed, and expects the broker to be able to show that placing business with a connected MGA served the client rather than the group.
Product oversight and value. As a manufacturer or co-manufacturer of the product, an MGA carries product governance duties, including target market definition and fair value assessment, alongside the Consumer Duty where the customer is a retail one. Distribution charges added along the chain are part of that assessment.
Oversight of the delegate. The insurer remains responsible for the outcome. Regulators have consistently taken the position that authority can be delegated but accountability cannot, and carriers are expected to audit their MGAs rather than rely on bordereaux alone.

What to ask before placing through an MGA

Which insurer or syndicates carry the risk, and in what proportions?
When does the binder expire, and has the carrier confirmed continuing appetite?
Does the MGA hold claims authority, and up to what value? If not, who handles claims?
Is the MGA connected to the broker recommending it, and how is that conflict managed?
Who sets reserves, and who has the final word on declining a claim?

Why it matters

Buyers rarely choose an MGA; they are offered a product and see the MGA’s name on the certificate. The name on the paper is not the security. Understanding that the MGA is an agent with defined authority, and identifying the carrier behind it, changes how you assess both the strength of the cover and the risk of disruption at renewal.

Common questions

Is an MGA an insurer?

No. An MGA underwrites in an insurer’s name under delegated authority, but the insurance contract and the liability to pay claims sit with the insurer or syndicates behind the binder. When assessing security, look through the MGA to the carrier.

Does an MGA act for me or for the insurer?

For the insurer. When exercising its binding authority the MGA is the insurer’s agent. Your broker is your agent. That is why information given to an MGA in a proposal is treated as given to the insurer.

Can an MGA decline my claim?

It can if the binder gives it delegated claims authority within the relevant limits. Above those limits, or on referral triggers, the decision returns to the insurer. Either way the decision is made on the insurer’s behalf and the insurer remains answerable for it.

What happens if the MGA loses its capacity?

The binder ends and no new or renewal business can be written under it. Existing policies normally run to expiry, but at renewal you may be moved to a different insurer on different terms, or need to be remarketed.

Related entries

This entry is part of the Apex Insurance Wiki. Last reviewed 2026-08-21. Next review: 2027-02-21.

Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.

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