MGA / MGU / Coverholder

A Managing General Agent (MGA), also called Managing authorized by an insurance carrier (an insurance company or a Managing Agent at Lloyd’s) to underwrite, issue and manage insurance policies within a defined class of business and agreed guidelines, using the insurance carrier’s license and risk capital. The MGA acts as the Managing Agent of the insurance carrier, managing distribution, issuing policies, collecting premiums(incl. payment of local taxes) and sometimes handling claims. This type of agreement is called Delegated Authority.

MGAs allow insurance carriers to establish a global presence and a diversified portfolio without the burden of hiring staff, opening offices and maintaining a local business presence. It can therefore be an attractive outsourcing model for insurance carriers enabling them to manage their costs and optimize capital.

MGAs gain the benefit of the financial strength and reputation of the companies they represent and allow them to distribute products they would not be able to otherwise. They therefore act like small insurance companies but without the stringent capital requirements of an insurer. In some cases, they will be regulated as insurance agents by their local insurance regulators; regardless of that they must always comply with their insurance partners’ insurance compliance requirements. Being a Coverholder of Lloyd’s means complying with a complex set of regulations that any Lloyd’s Agent has to comply with. This includes Financial Crime & Sanctions (anti-money laundering, international sanction and bribery) and Conduct Risk. MGAs are audited on a regular basis by their insurance carrier or by independent auditors appointed by the insurance carrier.

MGA agreements are essentially issued by the London market (Lloyd’s), but this is also a valid outsourcing model for any insurance company in any class of business. Whereas the MGA model is quite common in the Anglo-Saxon world, there is still a lot of scope for development in Continental Europe.

The main lines underwritten under MGAs agreements are:

  • Marine liability
  • Accident & Health
  • Property
  • Professional Indemnity
  • Life

Lloyd’s is by far the largest provider of Coverholder agreements, although a number of providers can be found in Gibraltar and Malta.

Assithèque AG is a regulated Insurance Agency (MGA/MGU) domiciled in Vaduz, Liechtenstein.

Insurance in Liechtenstein

It is not a well-known fact that Liechtenstein is the ideal domicile for:

  • Life and P&C insurance companies wishing to do cross-border European as well as International business
  • Insurance and Reinsurance captives
  • Distributors wishing to launch their own insurance products

The Liechtenstein Financial Center has seen substantial changes over the past few years, and whereas it used to be seen as a tax-haven specializing in money laundering, its insurance laws and anti-money laundering guidelines are now on par with the rest of Europe. It has, however, managed to retain its flexibility allowing entrepreneurial entities and/or persons to pursue innovative new ventures and products.

It is furthermore fair to say that Liechtenstein is probably the best cross-border domicile in Europe. All insurers are active in cross-border business (the local market is simply not big enough for any “local” insurers), which means that it really provides the best platform for an Insurer or Distributor wishing to launch one or more products in a number of different markets, including Switzerland.
In this blog we focus on last point: Distributors wishing to launch their own insurance products. Assithèque has advised a number of companies and persons who wanted to establish a new or acquire an existing insurance company, and similarly helped a number of Distributors to realize their own insurance products.


Many Distributors reach a point where they have a superior knowledge of the market and/or a client base of sufficient size, where they know that if they can create and control their own insurance product, they would be very successful (and working for themselves). Unfortunately, this is easier said than done as there are a number of obstacles to overcome before the dream can become reality:

  • Insurers and Distributors do not always “speak the same language”; if the Insurer does not fully understand the concept the answer is usually a No – and as we know, it’s difficult to change a No into a Yes.
  • The Distributor does not have access to the right person at the Insurer – which often results in a No (which might have been a Yes if the Distributor had access to the right person in the organisation).
  • It’s necessary to speak to the right Insurer (not all Insurers cover all products and all markets).
  • But perhaps the most common reason: lack of knowledge and/or experience (in terms of creating your own product and finding the right Insurer to accept it).

Assithèque can assist you to create your own product. This can include any of the following:

  • Establishing your own Investment Fund to be included in a unit-linked Life insurance product.
  • Designing a Life Savings product (e.g. unit-linked) or Risk product (e.g. Term assurance, Critical Illness, Disability, Mortgage cover, etc.) or even an Annuity product.
  • Designing any type of Accident & Health, General Liability , Professional Indemnity and other classes of P&C insurance products.
  • Finding an Insurer who will be happy to act as “risk carrier” (i.e. “underwrite” your product).
  • Help you to negotiate pricing, fees, commission, etc.

The good news is that to achieve the above does not need to cost a fortune: Depending on the complexity of the product, the level of work to be performed and the expected (realistic) sales volumes, our fee could be structured on a success basis (we share in your upfront and ongoing fees), sometimes a fixed upfront fee is required (e.g. if the product is complex and/or the chances of success uncertain), or a mix of the two bases.

Why don’t you contact us for an initial discussion?