What is the difference between an mga and mgu

All insurance quotes and policies issued by RiskPoint are issued in accordance with our Binder Authority as are claim payments and therefore having a binding effect. Premium Payments to RiskPoint are done so with full release of responsibility to the insured, i.

Likewise, service of suit and other formal legal action can be received by us on behalf of our insurers with binding effect. In addition, claims payments made by RiskPoint to our insureds are done so with full release from our insurer, i. By Phil Zinkewicz The concept of the managing general agent MGA or managing general underwriter MGU —the difference between the two being that the MGA is often involved in the claims process, while the MGU usually is not—has its roots in the old general agency system, which came into being in the early part of the 20th century.

So, they contracted with general agents in New York who produced business for the companies through insurance brokers. Although the general agency concept spread throughout the country and operated very successfully, insurance companies were careful in the initial stages to give these general agents only limited binding authority.

This opened the door for a relatively few unscrupulous, very shady characters to enter the business of insurance, under the guise of managing general agencies and underwriters. By the s, the fraudulent behavior of these miscreants—mostly underworld figures—began coming to light.

The primary victims of these unscrupulous actors were insurers, companies that had unknowingly taken on huge liabilities without benefiting from the premium dollars.

During that time, Institutional Investor did a profile of one of the alleged ringleaders of the group that caused this mayhem. Today, managing general agencies and managing general underwriters, for the most part, enjoy a sound and solid reputation in the insurance industry.

And, insurance companies that work with these MGAs and MGUs recognize the importance of maintaining a hands-on partnership. GE ERC is one of those insurers. Programs underwritten may be single line, single state or national. And, in line with the advice offered by the jaded person interviewed in Institutional Investor , GE ERC is very careful with whom they do business.

Our people who put together our programs with our producers do not drop out of sight once the program agreement is established. Through our analytical tools, we are constantly monitoring and measuring the performance of our programs and sharing that information with our MGUs and MGAs. To address this need, many insurers turn to a Managing General Underwriter MGU for specific expertise and specialized services.

For insurance companies looking to expand into competitive markets, MGU insurance can offer the competitive edge they need to be successful. An MGU is a specialized insurance agent or broker who works with an insurer. MGUs use their expertise to work as underwriters for professional liability insurance and surplus lines of insurance. However, in addition to underwriting, MGUs can perform a number of tasks, including:.

The demand for these specialized services has continued to grow as more insurers partner with MGUs to help manage their business. There are a lot of reasons insurers choose to work with MGUs. Here are just a few advantages:.