CompleteMarkets
Provides insurance professionals with mortgage industry insight and is a resource P&C agents to learn more about protocols associated with insurance solutions for financial institutions. If you have relationships with financial institutions, visit to learn more about business best practices, industry trends, competitive advantages, and income producing opportunities.
What is an MGA?
June 20, 2016

A Managing General Agent (MGA) is an insurance agency or business entity who is granted authority by an insurance carrier to administer insurance programs and negotiate contracts on its behalf. The MGA acts as an intermediary between carriers and agents and/or insureds. Partnering with an MGA can be thought of as working with a dedicated branch office that provides specialized insurance programs within specific target classes. Working with an MGA can provide value-added expertise, access to multiple insurance markets, and a more efficient process in obtaining specific coverages as needed.

Distribution Channel

Put simply, the insurance carrier provides a product (insurance coverage) and the MGA provides the operational service and delivery of the carrier’s product to insurance agencies and clients. MGAs can partner with multiple insurance carriers to create a specific product mix for delivery to agents or to provide directly to insureds. Proctor Financial, Inc. (PFI) is an MGA that utilizes a multiple market approach to provide lender-placed insurance solutions for financial institutions. By partnering with six carriers, PFI is able to diversify portfolio risk and administer insurance programs that are tailored to meet client specific needs.

MGAs are granted binding authority and perform all essential duties necessary to distribute the carrier’s insurance products. These include taking applications, underwriting, providing quotes, policy processing, customer service, billing, claims adjudication, and other additional services.

MGA Distribution Channel

Why not Bypass the Middleman?

Why don’t insurance carriers bypass MGAs and distribute their products directly to the end-user? Carriers don’t have the capacity to underwrite risk for every insurance line they provide coverage. Insurance encompasses multiple kinds of protection, some of which are more specialized and demanding of industry-specific proficiencies. Carriers grant MGAs underwriting authority for insurance lines that they lack expertise in, like lender-placed insurance, to access different niche markets. This allows the carrier to diversify its risk and specialized entities to perform the necessary functions to create a more dynamic and robust value chain.

Why Partner with an MGA?

Risk Management

MGAs have the capability to leverage their specialties for agencies who service a wide range of business classes. Relying on an MGA for its expertise in an insurance segment promotes healthy risk management strategies for eliminating client exposures.

Win for All

  • Carriers can tap specialty markets by utilizing MGAs
  • MGAs establish credibility through carrier-backed and diversified product portfolios
  • Agents can access coverages through MGAs that would be hard to attain directly
  • Clients receive superior protection

Efficiency

MGAs are smaller businesses carrying forth initiatives for larger carriers. This allows MGAs to be agile and responsive with information flow. Since MGAs take on the duty of carrying out transactional activities for carriers, communication barriers aren’t as prevalent. Enabling streamlined processes optimizes the vehicle of delivery for insurance coverages.

Value-Added Expertise

Collaboration is key in delivering successful insurance programs. Crafting an overall distribution strategy which blends specialized business functionalities allows carriers, MGAs, and agents to have more income-producing opportunities.

Lender-Placed Insurance with an MGA

There are many advantages to doing business with an MGA. As an MGA, PFI is in a unique position to partner with clients, agents, and carriers to deliver comprehensive insurance solutions. PFI works with agents to provide lender-placed insurance and hazard tracking solutions for mortgage servicers, banks, credit unions, investors, and property managers. With over 45 years in the lender-placed insurance industry, PFI provides compliant workflow solutions, expedient claims administration, and a dedicated account manager for daily administration.

Interested in becoming an agent with PFI? Click here to learn more. 

Monica Sachdev
Other articles by: Monica Sachdev
This content has not been rated yet.