Originally from the United Kingdom, MGAs, or managing general agents, are increasingly present in the French insurance market, particularly in the world of insurtech, where some companies, such as Assurly, Luko and Zego, are using this status.
The MGA is similar to an underwriting agency that performs all the tasks normally performed by an insurer, without bearing the risk. MGAs are particularly active in so-called niche risks. Insurers trust MGAs because they know how to price and have the knowledge of the concerned market.
An urgent need for status
To operate in France, MGAs must register with the Orias, the intermediaries’ register. They can also operate via the freedom of establishment or the freedom to provide services. And as an intermediary, the MGA is subject to the obligations arising from this status.
However, the notion of MGA does not exist in French law, and it cannot be written into the statutes of a company, which leads most of these structures to recognize themselves as brokers. However, this is a very distinct activity since the broker is the insured’s advisor and is paid by the insurer, whereas the MGA is the insurer’s agent and is in principle paid by the insurer.
It could therefore be useful to regulate in favor of a status for MGAs in order to eliminate the ambiguity that exists in France regarding these structures.