MGA & AI: How Managing General Agents Use AI

MGAs, or Managing General Agents, have always played an important role in insurance. They fulfill the gap between carriers and brokers, making distribution faster and more efficient. 

Lately, MGAs are under pressure to provide faster services, and the competition is high. Clients expect quick responses, while carriers demand accuracy.

Ever since AI came out, MGAs have refused to switch to AI-powered technology and have relied on legacy systems. Why were they so hesitant? Did they end up using AI at all?

In this article, we'll explore what managing general agents think of AI, how it is changing the insurance business model, the key areas where AI creates value, and what the future of managing general agents looks like.

TL;DR (Too Long; Didn’t Read)

• MGAs (Managing General Agents) bridge carriers and brokers but face pressure for speed and accuracy.
• AI assists MGAs in processing submissions, analyzing risks, and automating repetitive tasks.
• Benefits include faster underwriting, higher accuracy, lower costs, better compliance, and improved broker experience.
• Key AI use cases: submission triage, risk clearance, policy checking, loss run analysis, and document automation.
• Insurance-tailored AIs, such as Bound AI, help MGAs overcome challenges and improve their performance.
• MGAs that adopt AI will grow faster and build stronger carrier and broker relationships.

What Is an MGA?

An MGA, which stands for Managing General Agent, is a type of insurance agent. MGAs serve as a liaison between a carrier and a wholesale agent, but they hold the carrier's binding authority. 

Having to communicate and work with both parties, MGAs need to move fast while staying compliant. They deal with thousands of documents, quotes, and risk submissions every day. 

AI for MGAs is now changing the way they work. AI can read documents, analyze risks, and streamline processes at scale. It gives MGAs the ability to grow without adding more headcount, while remaining accurate and reducing risk.

What's the Difference Between Brokers and MGAs?

Brokers and MGAs are both types of insurance agents, but their roles differ. The primary difference between brokers and MGAs is that MGAs have binding authority from carriers, allowing them to provide coverage on the carrier's behalf. 

MGAs have delegated authority from carriers, but it has its limits. They can underwrite, issue binders and policies, price, and sometimes even handle claims. That makes them a powerful force in the insurance value chain.

The Benefits of AI for MGAs

Faster Underwriting Decisions

AI can process risk submissions instantly. Instead of reading through hundreds of pages, an AI model can pull out key data, check it against carrier rules, and highlight red flags. 

For MGAs, this means underwriters can focus only on the cases that matter. Response times are getting shorter, and agents are getting answers quickly.

Increased Accuracy

Human error is a common occurrence when dealing with large amounts of data. AI reduces mistakes by applying the same rules consistently every time. With machine learning, AI, and NLP (natural language processing), the system is programmed to learn from previous examples and improve over time. 

When an MGA uses AI, the data sent to carriers is cleaner and more accurate. That builds trust with carriers and reduces rework. AI-powered tools route flagged cases for human review, keeping the accuracy at a high level and not risking making mistakes.

Lower Operational Costs

Hiring more staff to handle manual processes is expensive. AI lets MGAs scale without increasing headcount.

One AI tool can do the work of multiple team members, 24/7, without requiring them to work overtime or experience fatigue. That makes operations leaner and more cost-efficient.

Although AI reduces costs, it doesn't eliminate MGAs and underwriters; instead, it allows them to focus on their priorities and handle more complex tasks.

Better Client Experience

Brokers and insureds want speed and are often impatient when it comes to waiting for a quote, binder, or just an email reply. They don't want to wait days for a quote or answer, and the more workload you take on, the harder it is to keep up.

With AI, MGAs can deliver faster service. Quick responses mean happier brokers, and happier brokers bring more business. Carriers expect nothing less from MGAs either.

Compliance and Risk Control

AI can track compliance rules and flag potential issues before they become costly mistakes. AI made for insurance and MGAs keeps track of every step taken, making it easy to trace everything back in case of an audit or an emergency. 

For MGAs working across multiple states or product lines, compliance is critical. AI ensures no detail slips through the cracks, and can follow the carrier's guidelines that the MGA inputs.

Key Use Cases of AI for MGAs

Submission Triage

Submissions are where the whole underwriting process begins, and if an MGA doesn't start on a good note, there's a high chance of losing the client. With the submission triage processing AI agent, each submission gets processed in less than 2 minutes with accurate data.

Automated Risk Clearance

Risk clearance is one of the most time-consuming tasks for MGAs. AI can automate the process by scanning submissions, checking carrier appetite, and deciding whether the risk can move forward. Automating risk clearance removes bottlenecks and ensures brokers get fast feedback.

Policy Checking

Policy documents are long and complex. AI can read them, extract the important details, and compare them to the submission or binder. For MGAs, this saves hours of manual review and ensures consistency.

Loss Run Analysis

Loss runs provide a history of claims for a policyholder. The claims and loss statements are often messy and inconsistent. AI can instantly clean and structure loss runs. This helps underwriters understand risk profiles faster and more accurately.

Document Extraction and Data Entry

MGAs deal with endless PDFs, ACORD forms, SOVs, and spreadsheets. Manually entering this data into systems is slow. AI tools can read documents and push structured data directly into the MGA's platform, without having to type everything manually for hours.

The Technology Behind MGA AI

AI for MGAs isn't just one tool. It's a mix of technologies working together:

• Natural Language Processing (NLP): Helps AI read and understand insurance documents.
• Machine Learning (ML): Learns from past decisions to improve predictions over time.
• OCR (Optical Character Recognition): Reads scanned PDFs and images like loss runs or handwritten forms.
• Automation Workflows: Moves data between systems without manual input.

When combined, these technologies create a powerful Managing General Agent AI platform with all its benefits.

Challenges MGAs Face with AI

Adopting AI can be tricky if you don't choose the correct software and do the proper preparation for it. MGAs have previously faced challenges such as data quality, meaning that AI only does the work when the documents match the given pattern.

Integration can be a challenge on its own, and automation is no good if it changes your whole workflow and systems. 

It's important to find an AI-powered tool that can integrate into your existing systems and workflows without creating friction. With technology that was tailored for the insurance industry, such as Bound AI, managing general agents were able to overcome these challenges and purely benefit from the automation.

How to Get Started with AI as an MGA

Start with the most time-consuming tasks, such as risk clearance or submission processing, and identify which tasks take up the most time in your underwriting. Based on your most repetitive tasks, wisely choose an AI software to integrate into your workflows.

Constant feedback is the way for the AI to improve even more and provide more than 90% accuracy when handling tasks. Measuring the results will give you a clear picture of how much time and cost you have saved with AI. 

Bound AI - The Future of MGA's AI

Bound AI is an insurance AI tool built by underwriters, for underwriters. It's an AI-powered platform designed to take on the repetitive tasks that slow down underwriting. Our team combines deep insurance expertise with advanced technology to deliver AI built for your world.

Ready to automate? Meet your AI agents:

• Submission Triage Agent
• RiskClear Digital Worker
• Loss Run Analysis Agent
• SOV Processing Agent
• Policy Checking Agent

Ready to start your automation? Click here to schedule a demo.

The Bottom Line

Managing General Agents are at the center of the insurance ecosystem. They balance the needs of carriers, brokers, and clients.

With the use of AI, MGAs can move faster, cut costs, and deliver a better experience.

MGAs that embrace AI will continue to grow and gain market share. Those who resist will struggle to keep up.

What is an MGA in insurance? An MGA (Managing General Agent) is an insurance intermediary that has been delegated authority by carriers. Unlike brokers, MGAs can underwrite, price, issue policies, and sometimes handle claims.

How do MGAs use AI? MGAs utilize AI to automate repetitive tasks, including submission triage, risk clearance, policy checking, loss run analysis, and document data entry. This helps them scale while staying accurate and compliant.

Will AI replace MGAs and underwriters? No. AI won’t replace MGAs, but will transform their workflows and make life easier for them. By automating repetitive tasks, AI frees underwriters to focus on complex decision-making and relationship management.