For many in the market, “MGA” is a four-letter word. Poorly-managed MGA’s have generated a negative reputation that sours the perception of the entire MGA model. Valid criticism includes the seemingly obvious foolhardiness of “giving away the pen”, the lack of alignment or even conflict of interests between the MGA and the capacity provider, and the lack of transparency for and control by the capacity provider.
However, a truly professionally-managed MGA can more than adequately address these potential flaws and offer a number of distinct advantages for capacity providers. These advantages include easy and efficient entry and exit, lower ongoing costs, a structure that enables superior underwriting, and reduced impact on and of market pressures.
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