When you buy a policy, the firm you speak to is rarely the firm that carries the risk. An insurer takes on the liability, but a managing general agent, or MGA, often handles the day-to-day underwriting on the insurer’s behalf. Knowing which is which tells you who sets the price, who pays the claim, and who to chase if something goes wrong.
What an insurer does
The insurer is the carrier. It holds the capital, takes on the risk, and pays valid claims from its own balance sheet. It sets the overall risk appetite and the terms it will accept. If the insurer fails, policyholders are protected through the Financial Services Compensation Scheme, subject to limits.
What an MGA does
An MGA is appointed by an insurer to act in its name. Depending on the contract, the MGA may:
- Quote and bind policies using the insurer’s paper.
- Set or apply underwriting criteria within a mandate.
- Handle claims on the insurer’s behalf.
- Manage a panel of brokers or a distribution channel.
The MGA does not carry the risk. It operates under a delegated authority, which is why it is often called a coverholder when the appointment runs through a broker network or Lloyd’s.
Why the distinction matters to you
The name on your documents may be the MGA’s, but the promise to pay is the insurer’s. That affects three things:
- Who pays your claim: the insurer, even if the MGA handled the paperwork.
- Who sets the price: the insurer’s appetite shapes it, with the MGA applying it.
- Who to complain to: usually the insurer first, then the Financial Ombudsman Service.
A strong MGA can mean faster, more specialist service. A weak one can mean inconsistent decisions, because the insurer’s controls only reach as far as its mandate requires. The FCA expects insurers to oversee their delegates closely.
How to check who is behind your policy
Read the policy wording. The insurer is named as the carrier, and any MGA or coverholder is named as the delegated party. If you are unsure, ask the broker which insurer’s paper the policy sits on. Our explainer on what MGAs and coverholders do sets out the appointment model in more detail, and our guide to who does what maps the whole chain from insurer to broker.
Sources
- Financial Conduct Authority (FCA) — insurer oversight of appointed representatives and delegates.
- Insurers — how insurers delegate underwriting and claims.
- Existing explainer: what MGAs and coverholders do.
- Existing explainer: insurers, brokers, MGAs and underwriters: who does what.