What role does a managing general agent play in insurance?

A managing general agent (MGA) serves as an intermediary between insurance companies and the agents who sell insurance products to consumers. They have the authority to underwrite policies, bind coverage, and even handle claims in some instances, which allows them to provide a more tailored approach that reflects the specialty needs of particular segments of the market.

Being an intermediary means that MGAs operate on behalf of one or more insurance carriers, effectively representing their interests while also engaging with agents and brokers to distribute policies. This role is crucial in the insurance industry as it enables insurers to broaden their reach and manage risk more effectively without needing to establish a full-time sales force in every area they serve. The knowledge and expertise an MGA brings can significantly enhance the efficiency and effectiveness of the insurance distribution process.

While selling insurance to the public is a function of agents, it is not the primary role of a managing general agent. Similarly, although claims adjusters handle claims, they do not perform the comprehensive intermediary functions that MGAs do. Lastly, while MGAs may hold significant authority within the operations of an insurance firm, they are not the heads of insurance companies, but rather focus on the distribution and management of insurance products on behalf of those companies.