MGA’s or underwriting agencies are legal entities that act in the name and on behalf of one or more insurance companies and perform functions that, in general, are proper to insurance companies, such as issuing policies, collecting premiums or managing claims. In fact, these entities have a wide margin of autonomy and responsibility when carrying out this type of acts, if we compare them with most of the insurance agents existing in the market.

This autonomy should be reflected in the distribution contracts signed with the insurance companies, specifically through the granting of powers of attorney to enter into insurance contracts and powers of attorney to collect and settle claims on behalf of the insurer. In fact, despite being qualified as insurance agents in the Legal Regime of Insurance Distribution, the functions performed by these entities go far beyond this activity and are closer to a true subcontracting of these tasks. In fact, MGAs already have their own online platforms that streamline contracting procedures, allowing them to issue simulations and policies more quickly and efficiently and, at the same time, to adjust products and services to the specific needs of clients.

As can be easily understood, one of the advantages for insurers of using underwriting agencies will be cost savings, as they will be able to allocate their technical and human resources to other functions, maximizing their productivity.

Another positive aspect has to do with the fact that AMSs can also design and develop insurance products, especially in certain more complex niche markets that are little explored and which insurance companies are reluctant to enter, given the risks involved. This allows underwriting agencies to explore these markets, making it possible to create and develop innovative products, offering customized solutions and adjusting more effectively to the risks to be covered. In this way, insurance companies will be able to establish strategic partnerships with AMSs, broadening their product offering, reaching new markets and deepening their knowledge and involvement in new areas of activity.

However, it should be emphasized that, although they underwrite and issue insurance policies, underwriting agencies do not assume the insurable risks, as these will be borne by the insurance company.

Belzuz Abogados S.L.P. – Sucursal em Portugal has a multidisciplinary team with extensive experience in the incorporation of companies and in the monitoring of their registration or authorization process before the insurance supervisory authority, as well as in the drafting, review and adaptation of distribution contracts in accordance with the wishes of the parties. At the same time, the team of lawyers of the Insurance Law Department can be of excellent assistance in the analysis of possible business models to be implemented by their clients, given their global vision of the insurance market.