Managing General Agent (MGA)
A managing general agent (MGA) is a specialized intermediary that operates with delegated underwriting authority from one or more insurance carriers. Unlike a standard retail agent who submits applications to a carrier's underwriting desk and waits for a decision, an MGA has the contractual authority to evaluate risks, set pricing, bind coverage, and often issue policies and handle claims — all on behalf of the carrier whose paper backs the policy.
Why MGAs Matter for Independent Agents
MGAs solve one of the most common problems in commercial insurance: what to do when standard carriers say no. A contractor with a poor loss history, a cannabis dispensary, a haunted house attraction, a crane operator — these risks often get declined by admitted carriers or generate non-competitive quotes because they fall outside the carrier's standard appetite. MGAs exist to fill these gaps.
For independent agents, MGAs serve as an extension of the carrier panel. An agent with appointments at 15 admitted carriers might still encounter risks that none of those carriers will write competitively. MGAs — particularly those operating in the surplus lines market — specialize in exactly these accounts. BTIS, for example, focuses on specialty and niche commercial lines, providing agents access to markets they would not otherwise reach.
The practical advantage of submitting to an MGA versus a carrier underwriting desk is speed and expertise. An MGA that specializes in restaurant insurance has seen thousands of restaurant submissions and can make underwriting decisions in hours rather than days. Their underwriters understand the nuances of liquor liability, grease-trap maintenance requirements, and late-night operations in a way that a generalist carrier underwriter handling restaurants alongside manufacturing and retail accounts cannot match.
How MGAs Work
Delegated authority: The foundation of the MGA model is the managing general agency agreement with a carrier. This contract specifies what the MGA can and cannot do — the classes of business they can write, the maximum policy limits, the geographic territory, the pricing authority (whether they can deviate from filed rates), and whether they can bind coverage without per-risk referral to the carrier.
Carrier relationships: An MGA may represent one carrier exclusively or have agreements with multiple carriers for different product lines. The carrier provides the financial backing (the policy paper, claims reserves, and regulatory filings), while the MGA provides the underwriting expertise and distribution. The carrier's AM Best rating applies to the policies the MGA writes, which matters for insureds and lenders who require minimum financial strength ratings.
Revenue model: MGAs earn commissions on the business they write, typically higher than standard retail agent commissions because of the underwriting work they perform. The retail agent earns their commission from the MGA, and the MGA retains the difference between the retail commission and the override they receive from the carrier. Some MGAs also earn profit-sharing or contingent commissions based on the loss performance of their book.
Types of business: MGAs tend to focus on one or more of these segments:
- Specialty admitted lines — Niche classes within the admitted market that require specialized underwriting (artisan contractors, professional services, technology companies)
- Surplus lines / E&S — Non-admitted coverage for risks that admitted carriers will not write, from unusual property exposures to high-hazard liability classes
- Program business — Tailored insurance programs designed for specific industries or association groups, often with customized policy forms and competitive pricing based on pooled data
For agents submitting to MGAs: The submission process is similar to submitting to a carrier — application, loss runs, supplemental information — but MGAs often have simpler submission requirements and faster response times for their areas of specialty. Agents should build relationships with a handful of MGAs that cover the specialty segments they encounter regularly rather than trying to work with dozens of MGAs sporadically.
Frequently Asked Questions
What is a managing general agent (MGA)? A managing general agent (MGA) is an intermediary that has received delegated underwriting authority from one or more insurance carriers. This means the MGA can quote, price, bind, and often administer policies on the carrier's behalf — without requiring per-risk approval from the carrier's own underwriting desk. MGAs typically specialize in niche markets or complex risk classes where their focused expertise enables faster, more accurate underwriting decisions.
When should an agent use an MGA? Agents turn to MGAs when standard admitted carriers decline a risk or cannot offer competitive pricing. Common situations include businesses with poor loss histories, specialty classes like cannabis, crane operators, or haunted attractions, risks needing excess and surplus lines (E&S) coverage, and accounts requiring custom policy forms that admitted carriers do not offer. MGAs extend an agent's effective carrier panel beyond their direct appointments.
How does an MGA differ from a standard carrier? A standard carrier issues policies on its own paper, carries the risk directly, and employs underwriters who handle submissions across many different classes. An MGA underwrites policies on behalf of a carrier — the carrier's paper and financial strength back the policy, but the MGA makes the underwriting decisions within the authority granted to it. MGAs typically specialize in one or a few market segments, giving them deeper expertise than a generalist carrier underwriting desk.
How do agents submit business to an MGA? The submission process for an MGA is similar to a carrier submission: completed application, 3–5 years of loss runs, any required supplemental forms (e.g., a contractors supplemental or professional liability application), and a brief description of the risk. MGAs specializing in their target segments often provide faster turnaround than carrier desks — typically 24–48 hours for standard submissions — and may have online portals for expedited quoting on eligible classes.
Related Terms
- Insurance Agent Appointment — The formal authorization agents receive from carriers or MGAs to represent them and place business
- Surplus Lines / E&S Market — The non-admitted market where many MGAs operate, providing coverage for risks that admitted carriers will not write
- Binding Authority — The specific authorization that allows MGAs (and some agents) to bind coverage without per-risk carrier approval