Benefits to using MGA Insurance
Have you heard of managing general agents? These professionals work with insurance companies, agents and brokers to underwrite insurance policies that fill gaps in your existing coverage. They rarely work with final clients, but they do work between agents and insurance companies. These are some reasons these companies, brokers and agents work with MGAs.
They Reduce Risk
There are times when insurance companies want to test new markets. However, they may be hesitant to entire these markets due to unknown risks and rewards. Because MGAs understand a wide variety of markets and products, they can act as guides to insurance companies.
These companies may go to MGA insurance providers with questions, looking for general guidance and risk assessments, or they may ask them to underwrite policies in this area as a test. In either case, the insurance company can get information about the proposed changes to their offerings without assuming as much risk as they would otherwise.
They Save Time
Most insurance companies have general policies that they offer to their clients. They may offer a variety of policies, but most customers generally receive the same coverage. This allows these providers to streamline their processes and their agents to gain significant knowledge about the products they provide
However, some clients want different coverage options. They may ask for policies that include services the insurance company does not provide. An MGA can step in and work with the client, broker or agent to find the right coverage. They also understand a wider variety of coverage options so they can answer the customers’ questions. No matter how complicated the policy, an MGA likely has the knowledge to make it simple for the insurance company and client.
They Work in Isolated Communities
Small towns and rural communities don’t often have the clientele to support an insurance brokerage or office. It may be cost-prohibitive for these companies to open branches in these areas. Although clients can travel to larger, more populated areas to secure their coverage, some have lifestyle, health or other limitations that prevent this.
MGAs can service these communities. Because they are independent, they can work with numerous insurance companies to get the policies that their clients need. In addition, they give insurance companies access to clientele that they wouldn’t have access to otherwise. The insurance company saves money on staff, rent and other overhead costs but still gets business from the locals in these communities.
They Provide Expertise
MGAs tend to deal with a much larger, wider product line than traditional insurance companies, agents and brokers. They offer customizations that these other entities do not. In addition, they can often offer these services for a lower price. This encourages insurance companies and agents to work closely with MGAs. They have access to a wider product line at a lower cost. In addition, they gain the expertise of these individuals, from their product and service knowledge to their understanding of the underwriting process.
MGAs have unique, specialized expertise in uncommon or customized insurance coverage. This expertise makes them invaluable to the insurance industry and its major players.
