Managing General Agent (MGA): Definition & Role in Insurance

A managing general agent is an individual or a business that can act on behalf of an insurance company. The managing general agent can do a number of different things for the insurance company including setting up insurance agents and negotiating insurance contracts.

Managing general agents are not as commonly used as they once were. These individuals were first set up when there were many insurance companies located on the East Coast and they wanted to expand into the rest of the United States. Due to the difficulties of setting up businesses, they would hire these general agents to act on their behalf. Now, with advancements in technology, those insurance companies can conduct business anywhere that they want without any problem. This has made the managing general agent somewhat obsolete.

Even though they are not common, managing general agents still do business in the insurance industry today. They can provide a valuable role for certain insurance companies that do not have the power to generate new business or expand their existing business. These individuals can sometimes even sign contracts on behalf of the insurance company as long as they are authorized to do so.