Managing general underwriter

The managing general underwriter, or managing general agent, is an intermediary to whom one or more insurers delegate underwriting authority: it selects risks, sets premiums, issues policies and often handles claims, without itself bearing the risk, which remains on the balance sheet of the principal insurers. This model gives capacity providers access to niche expertise without building it in-house, and it thrives precisely in classes where specialised knowledge outweighs volume, fine art insurance being a canonical example: the oldest and largest US managing general underwriter of the class, Huntington T. Block, a unit of the Aon group, concentrates expertise that few generalist insurers possess. The model's counterpart is an alignment-of-interest challenge, the agent being paid by commission while the principal bears the losses, which calls for precise delegation agreements, underwriting limits and close monitoring of loss experience.

A generalist insurer wants to grow in fine art insurance without hiring art historians. It grants underwriting authority to a specialised managing general underwriter, which selects and prices collections within agreed limits, in return for a commission.

MGU, MGA, managing general agent, agence de souscription