Managing Field Agents: The Life Insurance Superheroes

A managing general agent (MGA) is a type of insurance agent who has the authority to underwrite insurance policies. Underwriting means an MGA can assess a customer's risk and offer them insurance. Unlike traditional agents, who sell insurance policies to customers, an MGA can sell policies, approve them, set prices, and settle claims. They are also involved in other decisions, such as hiring independent agents, determining commission rates, and handling claims. MGAs are either individuals or entities hired by the insurer, and they are awarded more decision-making power.

Managing General Agents (MGAs) are hired by insurers and have more decision-making power than licensed agents

Managing General Agents (MGAs) are a type of insurance agent with more decision-making power than licensed agents. They are hired by insurers and are given underwriting authority, meaning they decide what risks the company will insure and help shape the insurance products offered. MGAs may also contribute to other decisions such as hiring independent agents, determining commission rates, and handling claims. They are responsible for managing all or part of the insurance business, underwriting and approving insurance policies, negotiating prices and coverage terms, creating specialised insurance products, and marketing and distributing these products to agents and brokers.

MGAs typically have more expertise and earn higher incomes than licensed agents. They are usually required to have a high school diploma or GED, and many have a bachelor's degree in a related field such as business, finance, risk management, or insurance. To become an MGA, one must first become an insurance producer in their state, gain several years of field experience, and then obtain an MGA license if required by their state.

The daily tasks and responsibilities of an MGA differ from those of a licensed agent. Licensed agents solicit insurance policies to consumers by representing the interests of the insurer, while MGAs have more authority and expertise. MGAs may focus on specific coverage areas, such as employee benefits or medical malpractice, or on geographic locations, especially in rural areas without large insurance agencies.

In addition to having strong technical knowledge and business acumen, MGAs must possess excellent interpersonal communication skills. They frequently interact with customers, insurance agents, and other professionals, requiring strong verbal communication and active listening skills. MGAs also need to be detail-oriented, as they draft and review important insurance documents, and have solid computer skills to create these documents using specialised software.

MGAs are vested with underwriting authority, meaning they decide what risks the company will insure

Managing General Agents (MGAs) are vested with underwriting authority, meaning they decide what risks an insurance company will insure. They are a specialized type of insurance agent or broker with more decision-making power. MGAs are hired by insurers and are given the authority to assess a customer's risk and offer them insurance. They can sell policies, approve them, set prices, and settle claims.

MGAs have a wide range of responsibilities, including managing part or all of the insurance business, underwriting and approving insurance policies, negotiating prices and policy conditions, creating specialized insurance products, marketing and distributing products to agents and brokers, and supervising policy paperwork and claims management. They also ensure that all activities meet state laws and industry standards and analyze data and market trends to make informed underwriting decisions.

MGAs typically specialize in a particular topic and become experts in their field. They can focus on specific coverage areas, such as employee benefits or medical malpractice, or geographic locations, especially in rural areas without large insurance agencies.

To become an MGA, one must obtain an active producer license in their state of residence and meet any additional license requirements specified by their state. A surety bond and an errors and omissions (E&O) policy may also be required. While no higher education degree is necessary, many MGAs hold a bachelor's degree in business, finance, risk management, or insurance, and advanced degrees can lead to additional opportunities.

MGAs may also contribute to decisions like hiring independent agents, determining commission rates, and handling claims

Managing General Agents (MGAs) are insurance professionals who have more decision-making power than licensed agents. They are vested with underwriting authority, meaning they can decide what risks the company will insure and help shape the insurance products the company provides.

MGAs may also contribute to decisions about hiring independent agents. This could involve partnering with an insurance agency, where the agency provides necessary funds in exchange for a percentage of the MGA's sales. MGAs with their own startup agencies will need to hire independent agents to sell policies to customers.

MGAs can also determine commission rates. In the first year of selling a policy, an MGA typically receives anywhere from 30% to 90% of the amount paid for a policy by the client. In later years, this may drop to between 3% and 10%.

Finally, MGAs handle claims and perform other administrative tasks. They settle claims and provide individuals with funds, ensuring accuracy in the handling of insurance claims and the verification of documents and account statements.

MGAs can work independently or with an insurer to produce insurance policies

Managing General Agents (MGAs) are a type of insurance agent who has the authority to underwrite insurance policies. Underwriting means an MGA can assess a customer's risk and offer them insurance. Traditional insurance agents sell insurance policies to customers, but an MGA can sell policies, approve them, set prices and settle claims.

MGAs may also create startup wholesale insurance agencies or partner with an insurance agent to begin their careers. They can market and sell their own policies or provide policies for retail agents to buy for their customers.

The daily tasks and responsibilities of an MGA differ from those of a licensed agent. MGAs have more expertise and earn more, but they also need a broader skill set, including technical knowledge, business acumen, and strong interpersonal communication skills.

To become an MGA, you'll need an active producer license in your state of residence and a high school diploma or GED

A managing general agent (MGA) is a type of insurance agent who has the authority to underwrite insurance policies. Underwriting means an MGA can assess a customer's risk and offer them insurance. This is a step up from a traditional insurance agent, who sells insurance policies to customers. To become an MGA, you'll need an active producer license in your state of residence and a high school diploma or GED.

The requirements to become an MGA vary by state, and some states have specific MGA license requirements. For example, in Texas, standard agents must pass a special exam to become licensed surplus lines agents. You will also need to obtain a surety bond, ranging from $100,000 to $500,000, and you may be required to maintain an errors and omissions (E&O) policy.

While no higher education degree is required to become an MGA, many MGAs have a bachelor's degree in business, finance, risk management, or insurance. Earning an MBA or other advanced degree could create additional opportunities. You should also gain several years of field experience as an agent or broker before becoming an MGA.

The role of an MGA is lucrative and comes with more decision-making power and professional opportunities than a traditional insurance agent. MGAs help shape the insurance products a company provides and contribute to decisions such as hiring independent agents, determining commission rates, and handling claims.

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