Insurance MGA

A managing general agent designs, prices, and sells insurance products, but the underlying risk sits with a licensed carrier rather than on its own balance sheet.

This lets a technology company enter insurance without the capital requirements of becoming a carrier, at the cost of depending on a partner who can withdraw.

Revenue is commission on premium written, often supplemented by a share of underwriting profit when the book performs better than expected.

Because commission is a percentage of premium, revenue scales with volume without the company holding reserves.

• Gross written premium
• Loss ratio on the book
• Combined ratio including expenses
• Commission rate and profit share terms
• Carrier capacity secured and its duration

Strong agents show loss ratios below the market for their segment, multi-year carrier relationships, and a data or distribution advantage that explains the outperformance.

The best eventually take some risk themselves once the book has proven itself.

• Digital-first agents in personal lines
• Specialty agents in niche commercial risks
• Embedded insurance sold within another platform
• Parametric products with automated payouts
• Hybrid models taking partial risk alongside carriers

• What is the loss ratio, and how does it compare to market?
• How long is carrier capacity committed for?
• What happens if the primary carrier withdraws?
• Is there any profit share, and has it been earned?
• What data supports better-than-market underwriting?