In Focus: Underwriting is the lifeblood of MGAs, but claims service must not be ignored

Few would argue that the MGA model, which continues to solidify its place in the insurance distribution chain, is not a success story. 

The delegated underwriters, with their ability to deploy underwriting expertise in niche specialist lines that larger, oil tanker like insurers can’t make the numbers work on, have carved out their own place – and insurers and brokers both see MGAs’ value. 

Indeed, Insurance Times’ Five Star Rating Report: MGA Market 2023/24 noted that 54% of surveyed brokers agreed MGAs were a very viable alternative to big insurers, with a further 27% strongly agreeing with this sentiment.

More than four-fifths (82%) of respondents also said they were intending to work more with MGAs over the next five years.

A survey by MGA Prestige Underwriting, released in June 2025, additionally showed that 90% of brokers view MGAs as either very valuable or somewhat valuable in helping them navigate the complexities of non-standard risk.

Much of this popularity around MGAs relies on the twin pillars of underwriting expertise and service quality, with entrepreneurial underwriters expected to respond to quote submissions in a nimble fashion.

In the aforementioned Insurance Times MGA report, 75% of polled brokers said that either service (41%) or specialism (34%) were what they valued most from MGAs.

Claims service and performance are often less emphasised aspects of the MGA model’s popularity, however, representing an area where smaller line sizes and specialism can convey disadvantages. 

Huw Evans, partner and head of insurance at KPMG UK, said: ”Customers’ expectations of claims in terms of both speed and efficiency are growing higher, as they live in an increasingly digitalised world.

”MGAs have three different ways in which they might manage claims. They might do it themselves if they’re large enough, they might hand back up to the carrier, or they might hand it over to a third party, which has historically been the most popular approach.

“MGAs do start with an advantage in modernising claims processes in some respects, in that they often have modern technology and no legacy to contend with, but it is true that most MGAs have not chosen to handle claims in-house and this can potentially be a disadvantage in that they can lose control of the customer experience to an extent.” 

Outsourcing advantages

Underwriting expertise is what many MGAs will sell themselves on – and that is not to be sniffed at. It is also not a problem, as long as the end customer is properly serviced in the event of a claim.

That is why many MGAs will outsource their claims functions to firms that themselves specialise in a specific part of the insurance value chain –  specialist third party administrators (TPA).

Liz Latter, chief executive at insurtech MGA Qlaims, noted: ”MGAs are mostly reliant on their capacity providers’ claims approach.

”While this shouldn’t be at odds with the MGA’s needs, ensuring that their bespoke cover comes to life in a large scale, volume claims operation will have its challenges. This is where specialist TPAs or products like loss recovery insurance can really help, by providing customers individual assistance and ensuring the policy they purchased responds correctly.” 

As underwriting is delegated in the MGA model, it makes sense that the claims part of the value chain does the same. Especially where MGAs underwrite highly complex commercial products, economies of efficiency make outsourcing claims a sensible option. 

MPR Underwriting is an MGA that covers the financial lines market, including complex lines such as directors’ and officers’ insurance and management liability. 

The firm’s underwriting development manager, Karen Williams, told Insurance Times: ”From our perspective, the TPA offers scalability and a service level agreement, while not interfering with our relationship with our capacity provider. 

“Most MGAs aren’t huge and they haven’t really got the infrastructure to manage claims. They’re focused on the things they’re focused on, like underwriting, so partnering with TPAs is critical to not having to worry about managing the claims part of the business.

“The world of financial lines can be quite sophisticated, so our TPA is lawyer led as we require our claims partner to have legally qualified handlers – it goes with the territory.” 

Maintaining service

So, while MGAs may not be experts in claims management, it is vital that they ensure claims service is maintained at appropriate levels – both for their own success and the requirements of their capacity providers. 

Steve Whetter, Sedgwick’s managing director for TPA, told Insurance Times: ”When a claim happens, that is the one moment when an insurance policy is put to the test. Customers pay their premiums in the hope they never have to [make a claim], but when they do, we need to make sure they’re receiving a first class service and getting value for money.

“MGAs often come to us because they’re focusing on underwriting, distribution and the development of a service range, but have a potential solution that can be stood up pretty quickly by way of a TPA such as ourselves. 

“We’ve been in business for over 50 years and are adept at understanding claims processes, servicing requirements, the regulatory landscape and the ever evolving role that technology plays, so an MGA can tap into all of that pretty much straight away without having to build it themselves or make the investment that goes with that.”

The TPA ecosystem allows entrepreneurial underwriters to launch their products quickly by relying on the established expertise of claims handlers, with bespoke options available around branding, service levels and success metrics. 

Whetter added: ”Importantly, we will try to stand up a service that is bespoke to the MGA, reflects their philosophies and can be delivered in their name, if required. We will always sit down with an MGA to understand a little bit more about what they stand for and have had instances where we will invite MGAs to come in and train some of our people, to better understand what their customers are looking for.

“Some clients may choose not to outsource everything, so if they’re just looking for support or training for people, we can provide that too.” 

Capacity providers

In many cases, where an insurer has delegated some of its underwriting to an MGA, it is the capacity provider that will hold more experience in managing claims and partnering with TPAs. 

Hiscox is one such company, with the insurer’s group claims director Steve Parry noting that MGA distribution is “a big growth area for us, particularly in the UK”. 

He explains: ”When a new MGA comes in, we’ll do our due diligence from an underwriting and client perspective. The perfect scenario is that the MGA can handle the claims and they have the right skill set, but that’s not the norm and it’s very rare actually.”

This means that any insurer that is servicing clients via an MGA must also ensure that its brand philosophy where claims are concerned is being adhered to, necessitating the management of a number of relationships. 

Parry added: ”From a client perspective, you’re almost diluting yourself twice. Once through the MGA a little bit and then again through the TPA. That’s why we do all the due diligence on not just the MGAs we work with, but the TPAs they want to use too.

“If we have a claim, then we want to know that it’s being handled safely and respectfully. If it’s festering in some TPA or lost in the wilderness between an MGA and a TPA, then that’s not what people are paying their premiums for and that’s just not good service.

“It’s about making sure you’ve got the right level of control and that everyone understands the way that we want claims to be handled because, at the end of the day, the claims bit is equally as important as the underwriting component.” 

Whether it be service level agreements, data reporting, regular meetings or something else, it is absolutely vital that claims service and the end consumer are not lost sight of when different aspects of the insurance product chain are outsourced to different partners. 

MGAs may function better because of their underwriting specialisms, but it is still incumbent on them to properly manage relationships with both TPAs and capacity providers to ensure claims service is up to scratch. 

Parry noted: ”An insurance product is a set of words that promises to do something in the event of something happening. What customers want is the insurance company that makes that promise to make the process simple and to hold their hands through it.”