The rise of MGAs in the Insurtech Industry

By Thomas Derval & Tim Deplancke - Simont Braun

What’s an MGA?

An MGA is essentially an outsourced underwriting arm for insurers, but with the agility, mindset and (possibly) independence of a start-up.

An MGA – or Managing General Agent – is a specific category of insurance intermediary. While nuances as to the exact role of an MGA may vary from one country or region to another, the common key characteristic is that an MGA has the ability to represent one or more insurer(s) and to underwrite insurance risks on their behalf.

On top of their underwriting capabilities, MGAs may be involved in other traditional insurance intermediation services and handle things such as policy distribution, claim management, etc. 

While they may, in theory, directly serve policyholders and insureds, many MGAs, however, prefer to adopt B2B2C or B2B2B structures: they put themselves between insurers and traditional insurance distributors, typically independent brokers, leaving the latter in charge of contacts with end-customers and of the development of a customer network.

Key features of the MGA business model

The advantages of the MGA model are numerous, especially (but not only) for young companies.

First, licence requirements are generally limited and reasonably easy to meet. In Belgium, for instance, there are no capital requirements to set up an MGA company. This is a game changer when you compare the situation to the Solvency¹ II requirements (own funds, regulatory capital, governance…) applicable to insurers. This opens the door for teams to test, iterate, and scale underwriting ideas without locking capital for years. This also means that, with the right preparation, an MGA structure can be incorporated within a few weeks or months and start its business almost immediately.

Second, while not subject to the same heavy regulatory burden as insurers, MGAs nonetheless benefit from the EU recognition of their licence and status (the so-called “passport effect”). In other words, once a company obtains its MGA licence in a European country, it can reach the entire EEA market within weeks. This European leverage is particularly relevant in a digital environment, where an insurance app can be made easily accessible across Member States in a few clicks.

Third, MGAs may design, develop and tailor-made insurance products without carrying the insurance risks on their balance sheet leaving it to insurers. Regulatory burden aside, MGAs may also structure themselves as leaner structures with little to no red tape. They are much more agile than insurers and adopt more flexible innovation and decision-making models. Compare an oil tanker and a speedboat.

Of course, the MGA model is not a one-size-fits-all solution, and the status will not suit every business model.

A first trade-off arising from the fact that MGAs are not fully fledged insurers is that they depend on their collaboration with their partner insurer(s). The mandate granted by insurers can take different forms and may be limiting in certain instances. On the other hand, at the other end of the spectrum, some MGAs receive an unlimited mandate – meaning they can underwrite risks on behalf of insurers without pre-agreed financial caps (this remains rare and typically occurs only when the MGA has a long-standing and proven track record).

A second important trade-off relates to economics. Although insurers accept to bear the underwriting risk on their balance sheet, this comes at a cost: a (substantial) portion of the premiums collected by the MGA is passed on to the insurer. This aspect is essential to factor into any MGA business plan or financial model.

An opportunity for insurers

Somewhat counterintuitively, MGAs may act more as an opportunity than a threat for insurers.

Beyond receiving a portion of the premiums produced by MGAs, the model gives insurers a flexible way to pursue new business opportunities. Large insurance groups may struggle to invest and develop rapidly evolving or niche sectors (e.g., cyber, ESG, industrial risks, etc.). Collaborating with MGAs allows insurers to easily access risk expertise, more local or atypical markets and emerging and innovative lines of business, without developing in-house.

Non-lucrative segments may also be easily identified and cut off with a simple mandate termination and do not (necessarily) lead to a restructuring or down-sizing of the insurance company.

Some EU data

In June 2025, Howden Re released an interesting report on the development of MGAs in Europe.

The report identifies approximately 950 MGAs across Europe², including ca. 300 structures in the United Kingdom. According to Howden Re,

these MGAs collect EUR 17,910 million

GWP³, of which EUR 3,500 million

were collected in the Benelux⁴

region alone.

Successful stories are already popping up across the old continent: Stoïk specialises in cybersecurity and is quickly expanding from France to the entire European market, Descartes Underwriting offers innovative insurance against climate, cyber and other emerging risks relying on in-house technology and modelling techniques, and Qover is developing embedded insurance solutions for businesses and has already secured noticeable partnerships (amongst which Revolut, BMW, or Mastercard).

The case of Belgium

Signs of development of the MGA business model can be observed in the Belgian regulatory landscape. In the aftermath of Brexit, in 2019, the Belgian legislator created a brand new licence and regulatory status for MGAs (“souscripteur mandaté” in French or “gevolmachtigde onderschrijver” in Dutch). At the time, it seems the status was created to reassure Lloyd’s of London, which heavily relies on MGAs and which was establishing its EEA non-life operations in Brussels as part of its Brexit plan.

To be nuanced, it should be noted that the MGA already existed in Belgium prior to 2019. It was however often carried out under a broker licence, which may not always be fully in line with the actual MGA model.

As yet another sign of this market development, a dedicated sector representative association was set up in 2023: the Belgian Authorised Underwriters Association or “BAUA”^.

MGA and Insurtech

The MGA model is said to date back to the late 19th or early 20th century. It is now switching from an opaque and expert-only model into an effective scaling mechanism for the Insurtech industry.

For Insurtechs, the MGA model often represents one of most straightforward regulatory paths. One offering young companies the possibility to develop their own insurance product(s), proprietary pricing and UX (e.g., development of their own app or platform, either to interact with partner brokers and/or directly with policyholders), with remaining regulatory-light.

Accessing these possibilities without capital and own funds requirements also means that the capital raised by Insurtech can be invested where it matters: product development, key profile recruitment, etc.

The European regulatory framework also offers important scalability potential: with a single licenced MGA in Belgium or in another Member State, an Insurtech may expand its business across the entire EEA while remaining subject to the (almost exclusive) supervision of its home country supervisor.

MGA is to Insurtechs what banking-as-a-service is to Fintechs

If we zoom out of the insurance industry and observe more generally the Fintech landscape, we see that many successful Fintechs have developed their business and reached maturity relying on and leveraging the regulatory licences of other, less flexible institutions. This structuration is often called “banking-as-a-service” or “BaaS”.

¹ Solvency II is the name of the EU Directive 2009/138/EC of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance, i.e. the overarching EU regulatory framework for insurers and reinsurers.

² Including the United Kingdom.

³ Gross written premiums.

⁴ Belgium, the Netherlands, and Luxembourg.