Managing General Agencies (MGA) in Canada: Overview (2024)

FAQs

What is a managing general agency in Canada? ›

A managing general agent (“MGA”) is a licensed life insurance agent or agency that is directly contracted with an insurer to facilitate insurance transactions between life agents and insurers. An MGA may be either a corporation or a partnership.

A Managing General Agent (MGA) provides specialized expertise in a specific, niche area of business. As an MGA our focus is municipal and municipal-related insurance, we also offer clients additional and helpful services in the area of risk management, claims and underwriting.

A Managing General Agent (MGA) is an agency that is contracted to perform various business functions, such as underwriting, binding, policy administration, claims, and distribution, on behalf of (re)insurance companies.

The federal and provincial governments regulate the P&C insurance industry. The provincial governments regulate market conduct, and the federal Office of the Superintendent of Financial Institutions (OSFI) is the industry's primary prudential (solvency) regulator.

The core difference between MGAs and wholesale insurance brokers is that wholesale brokers connect retail agents with a wide range of insurance carriers. MGAs have underwriting authority of their own to directly issue policies. MGAs adjust pricing and coverage based on their own assessments of an agent's client.

MGA's typically work with insurers to formulate products that they then deliver to agents or directly to insureds. They can also be responsible for communicating with clients and attending to their needs.

Right now, we estimate that there are more than 80 MGAs in Canada, representing the fastest-growing segment in Canada's insurance market. From a commercial lines premium perspective, estimates are that $3.5bn-$4bn dollars of premium are flowing through the MGAs.

There are two main types of MGAs: captive (directly employed by the insurer) and independent (free to shop for the best deals). Benefits of using an MGA include flexibility in creating custom policies, local market expertise, and personalized customer service.

An MGA typically acts as a middleman between the insurer and the insured. For example, if you have a car accident, your MGA would contact the insurer on your behalf to handle any claims. This allows you to focus on getting better health care and recovering from your injuries.

What is the difference between agent and managing general agent? ›

A managing general agent (MGA) is a specialized type of insurance agent/broker that, unlike traditional agents/brokers, is vested with underwriting authority from an insurer.

An MGA works independently or with an insurer to produce insurance policies. Their duties may include: Evaluating risks for companies or individuals before providing coverage.

All insurance companies must follow the rules and regulations of the province or territory where they carry on business. Provincial and territorial insurance regulators enforce consumer protection laws. They also oversee the licensing and conduct of insurance agents and brokers in their province or territory.

The top insurance providers in Canada are Manulife, Canada Life (subsidiary of Great-West Lifeco), Sun Life Financial, Desjardins, and IA Financial Group (aka Industrial Alliance). Smaller insurers include those operating as subsidiaries of banks, such as CIBC Insurance and TD Insurance.

For example, if you have a car accident, your MGA would contact the insurer on your behalf to handle any claims. This allows you to focus on getting better health care and recovering from your injuries. MGA's usually charge a commission fee based on the number of premiums collected.

Often times a particular Lloyd's program is insured by several syndicates. Managing Agent: They work on behalf of syndicates, overseeing day-to-day business affairs. Managing Agents select and oversee Coverholders. Coverholder: Is a company that underwrites risk on behalf of a Managing Agent.

1 In essence, managing agency is the vesting of the management of a joint stock company in the. hands of a firm of professional managers. In practice, the managing agent is usually responsible for the initial promotion, financing, underwriting, and organization of the joint stock company.