Benefits of Using an MGU

A Managing General Agent (MGU) is a specialized type of insurance agent or broker that has been granted underwriting authority by an insurance carrier. Similar to a hybrid operation, MGU’s combine operations of a retail broker and an insurance company. An MGU can help manage all or part of the insurance life cycle for an insurer. While doing so, this delivers a magnitude of benefits for the carrier.

  • Proficiency

    Working with an MGU, companies can pass time-consuming and complicated tasks to an outside entity that already has the knowledge to address them. MGUs are often smaller businesses than carriers, which allows for them to stay agile and responsive in dealing with the matters presented to them.

  • Minimized Risk

    MGU’s frequently employ a variety of different underwriters who have niche expertise. Insurers can reduce the risk of new markets by using the expertise of their partnership with an MGU. When partnering with an MGU, an Insurer has the ability to grow more quickly by providing the authorization to underwrite and issue polices for specialized lines of business.

  • Geographic coverage

    MGUs can give insurers geographic access to customers without the costs associated with opening an office. MGUs have the ability to write business in geographically isolated areas where insurers don’t have the ability or desire to open an office. A small town or rural region in Canada might not warrant the opening of a branch for an insurer, but working with an MGU in that area provides the company with access to new customers without spending excess capital.

  • Innovation

    With the access to industry leading underwriters, many successful MGUs grow from an original entrepreneurial spark. They are, by their nature, quick to adapt to change and take advantage of new opportunities. This is demonstrated by their use of technology.

  • Diversified Products

    MGUs have access to various insurance carriers which gives Brokers the ability to offer diversified, cost efficient products to their Clients.