Managing General Agents: The Benefit to Brokers
Managing general agents (MGAs) act as a specialised type of insurance agent. Granted underwriting authority by an insurer, they can benefit the average broker by making their professional lives significantly easier.
Many experts suggest that they offer an array of advantages to those brokers working within the insurance industry, especially when MGAs are compared to more traditional alternatives.
When brokers seek a quote on behalf of their customer, they have two primary options: either contact an insurer directly or turn to an MGA for assistance. Functioning as they do, the latter most often have full underwriting authority, meaning they’re able to negotiate on behalf of the insurer, while also managing specific parts of their business.
This focus on a smaller number of areas means MGAs are often able to provide tailored quotes much quicker than more traditional channels, and herein lies one of their foremost benefits.
The benefits of using an MGA: better, smarter, faster
In order to secure commercial insurance (or any other type, for that matter), standard practice is to approach an insurer directly. However, this may not be the best choice for every enterprise, with MGAs having some notable benefits to offer.
First and foremost, MGAs typically give brokers the chance to have direct contact with underwriters, as opposed to liaising through a computer system – the preferred method of some (albeit not all) insurers. This not only does away with a large amount of unnecessary form filling, but gives brokers the ability to develop a tailored solution by working with the professionals behind the scenes.
This element of direct contact creates an opportunity to establish mutually beneficial relationships. Where this is given the time to grow and develop, it not only means repeat business can be rewarded via, for instance, more attractive terms, but that the whole process can be streamlined thanks to this element of familiarity and a pre-existing knowledge of how the individual brokerage firm functions.
In addition, it’s far easier to get an instant ‘yes’ or ‘no’ answer when you’re able to speak to an expert individual directly and explain the vagaries of the risk, as opposed to first going through an automatic system in order to have your query dealt with.
It’s not only this element of streamlining that works to a broker’s advantage. While insurers are specialists in their field, the niche nature of an MGA’s role means they’re even more experienced in handling the specific type of queries a broker will typically send their way, thus speeding up and improving the efficiency of every part of the process.
Indeed, such companies have an appetite to find the best solution for their customer. Not limited to using a single source of finance, a good MGA will be able to get multiple quotes for the risk, benefitting the broker in the sense that this smorgasbord of options enables the broker to become more competitive, while also ensuring compliance requirements are met i.e. because they have demonstrably acted in the best interests of the clients by sourcing multiple quotes.
An ideal way to source the most competitive quotes, MGAs can help to significantly streamline professional processes and do much of the hard work on the brokers behalf. Isn’t it time to review your options and leverage the benefits of MGA’s today?