How a Managing General Agent Business Model Works
An independent insurance agent has many reasons to work with a managing general agent, or MGA. From the requirement of expertise to the availability of a particular product or the competitive price, MGAs provide a variety of services and competitive advantages to independent agents. In fact, Insurance Journal argues there are at least 50 possible reasons for partnering up with an MGA. To get a better understanding of how the managing general agency business model works, and how to benefit from working with an MGA, let’s first look at what precisely a managing general agent does. What is a Managing General Agency? The International Risk Management Institute (IRMI) has a straightforward definition for managing general agent: “a specialized type of insurance agent/broker that, unlike traditional agents/brokers, is vested with underwriting authority from an insurer.” As an agency, an MGA has granted authority to perform specific functions that are ordi...