A Managing General Agent is quickly becoming an integral part of how insurance is now transacted. Insurance companies will often delegate the underwriting of risk to a Managing General Agent. There are many reasons why an insurance company may wish do this – for example to get access to a specific specialist underwriting expertise, or to get access to a particular means of distribution.
The contract between the Managing General Agent and its insurance carriers is called a ‘Binder Agreement’. This sets out the rules within which underwriting authority is delegated. In addition to underwriting and managing the risks, the Managing General Agent will normally issue the policy, collect the premiums, and be the conduit for payment of claims. Contractually, the Managing General Agent is the agent of the insurance company. So the contractual principal with whom the insured enters a relationship is the insurance company, not the Managing General Agent. The risk and the premiums are retained by the insurance companies, and claims are ultimately paid by them. Managing General Agents are remunerated via a fee paid by the insurance company, and often by a profit commission (based on the underwriting results) too.
Allied Risk has the appropriate expertise and technology to deliver personal and business insurance schemes both in Ireland and in the UK on behalf of a number of insurance carriers.
If you are a broker with a book of business that you feel could be better serviced elsewhere or are looking for additional capacity please talk to us.