What is Managing General Agent (MGA)?
A Managing General Agent (MGA) is an insurance intermediary that holds delegated underwriting authority from one or more carriers, allowing it to bind coverage, set rates, and issue policies on the carrier's behalf without case-by-case approval — functioning as a specialist underwriting business within the broader insurance market.
A Managing General Agent occupies a unique position in the insurance distribution chain. Unlike a standard broker who merely places risk with a carrier, an MGA has been granted written binding authority — often called a delegated underwriting authority agreement (DUA) or coverholder agreement — that empowers it to accept or decline risks, set terms, and issue policies within defined parameters.
MGAs exist because insurance carriers often lack the specialist expertise or geographic reach to underwrite certain classes of risk efficiently. A carrier may be a well-capitalised balance sheet with a broad appetite, but writing E&S coastal property or cyber liability for tech startups requires underwriters with deep domain knowledge, relationships with specialist brokers, and proprietary pricing models. Rather than build that capability in-house, carriers delegate it to an MGA.
The MGA's authority is bounded: the carrier specifies maximum per-risk limits, eligible lines of business, geographic restrictions, and mandatory exclusions. MGAs must submit bordereaux — detailed reports of bound and in-force policies — to their capacity providers on a monthly or quarterly basis, enabling the carrier to monitor aggregation, compliance with the DUA, and developing loss ratios.
From a regulatory standpoint, MGAs are licensed in each state where they operate and are subject to the same market conduct rules as admitted carriers. Lloyd's coverholders are a specific category of MGA operating under Lloyd's governance, subject to additional quarterly reporting and performance reviews.
The MGA model has grown substantially in the US over the past decade. As of 2024, MGAs and program administrators write an estimated $80–100 billion in annual premium, representing roughly 10–12% of total US commercial lines premium. Their growth is driven by the proliferation of specialty classes, the hardening E&S market, and insurtech platforms that have lowered the cost of launching a new MGA book.
Vortic's Orb platform is purpose-built for MGA underwriting workflows. The nine-agent pipeline handles the high-volume, repetitive work that consumes underwriter time — parsing broker submissions, running flood zone and wind zone checks, verifying treaty limits, and generating structured decision memos — so MGA teams can focus on risk judgment. Orb also produces the structured, audit-grade output that carriers and Lloyd's capacity providers require for quarterly DUA reviews, reducing the compliance burden at month-end.
Frequently asked questions
What is the difference between an MGA and a standard insurance broker?
A broker places risk with carriers on behalf of clients but cannot bind coverage without carrier approval. An MGA holds delegated underwriting authority, meaning it can accept risk, set terms, and issue policies within agreed parameters — acting as an extension of the carrier's underwriting function rather than as an intermediary.
How does an MGA make money?
MGAs are typically compensated through a combination of a management fee (a percentage of gross written premium ceded to the program) and a profit commission tied to the book's loss ratio performance. Some DUAs also include override commissions and expense reimbursements for technology and compliance costs.
What happens when an MGA exceeds its delegated authority?
Risks that fall outside the MGA's binding authority must be referred to the capacity carrier for individual underwriting approval. Persistent referral patterns or authority breaches can result in DUA amendments, increased oversight, or termination of the binding authority agreement.