Managing General Agents (MGAs) are specialized insurance agents or brokers that have underwriting authority from an insurer, which means they can underwrite, price, and bind coverage. 

Over the past few years we’ve seen continuous investment into MGAs, and funding hasn’t slowed significantly even with the recent economic downturn. Here are some industry-wide trends among the big raises that are worth noting: 

Digital First 
Most MGAs are designed around providing a predominantly digital intake process. Some are able to go all the way through binding and issuance, while others require agent intervention after intake, but digital focus gives them easy scalability.

Niche Focus 
Many MGAs launch in a narrow vertical, such as upscale homeowners, commercial fleets, etc. Once they’re running well in that vertical they often expand into related products for the same customer base. Lemonade is a great example of this approach: it launched with renters, expanded into homeowners and pets, and now on to personal auto. 

Niche programs provide a unique opportunity for industry expertise to make a significant impact on an insurer’s bottom line. With the right expertise, MGAs can use data and partnerships to gain insight that helps them better price the risk and achieve more favorable loss-ratios. Given the current challenges the market is facing, expertise might be more important now than ever.

Strong Expansion Options 
Tied to the niche focus, many MGAs have well-designed expansion plans, either growing in the number of states supported or expanding into additional insurance products. With a digital-first approach and the niche expertise needed, these MGAs have something worth scaling that customers want: great insurance products that are easy to use.