What Is A Managing General Agent?
A Managing General Agent (MGA) is contracted directly with the insurance carriers. The insurance companies require MGA’s to place a substantial amount of premium each year to maintain their contract. And independent insurance agents do not typically place enough business to be contracted as an MGA.
Managing General Agents are granted authority by the insurer to appoint independent insurance brokers. The MGA has expertise that benefits the insurers. This expertise is often too costly for the insurer to develop on an in-house basis. So the MGA supports the business goals of the insurer and the independent insurance agent.
Difference Between Managing General Agent and General Agent
We’re often asked about the difference between a Managing General Agent (MGA) and a General Agent (GA). As outlined above, the difference is in the relationship to the insurers.
The General Agent (GA) is an independent insurance agent, or agency, that is appointed under an MGA. The General Agent represents different insurance carriers to distribute various insurance products to consumers. Thus, the hierarchy flows from the insurer, to the MGA, to the GA, to the broker.