Every discipline has a working vocabulary, and program insurance is no exception. The trouble is that most published definitions are written by people selling something, so the jargon compounds instead of clearing. The definitions below are the ones we use ourselves, in mapping sessions, in scoping documents, and in the build work.
If you are evaluating platforms rather than learning terms, start with our guide on how to choose MGA software. This page is its dictionary.
MGA · MGU · MGA vs MGU · Delegated authority · Coverholder · Bordereaux · Binding authority · Submission-to-issuance · Rating engine · Broker/producer portal · AMS · Policy administration system · Data migration validation · Human-in-the-loop AI · E&S / surplus lines · Fronting carrier · Combined ratio
MGA (managing general agent)
A managing general agent (MGA) is a specialized insurance intermediary that underwrites and administers policies on behalf of one or more carriers, under authority those carriers delegate to it. Unlike a retail agent, an MGA performs functions the insurer would otherwise perform itself, pricing risks, binding coverage, issuing policies, and often managing a program’s distribution. The carrier keeps the risk on its paper; the MGA runs the program.
In practice: everything on this page exists because an MGA does carrier work on carrier paper, so its systems have to show (continuously, in writing) that the delegated work is being done within its terms.
MGU (managing general underwriter)
A managing general underwriter (MGU) is an intermediary that underwrites risks on a carrier’s behalf, with its delegated role centered on underwriting and pricing decisions. The term is common in specialty and program business, and many shops that call themselves MGUs also quote, bind, and issue. There is no bright legal line separating the label from MGA in everyday U.S. usage.
In practice: if your shop is called an MGU, your systems requirements are the same as an MGA’s, intake, rating, binding, and reporting, all under someone else’s paper.
MGA vs MGU
In everyday U.S. usage, MGA and MGU describe the same kind of business (an intermediary underwriting on delegated authority) and the difference between the labels is emphasis, not legal category. Where the market does draw a distinction, MGU tends to signal a shop focused narrowly on underwriting and pricing for a carrier, while MGA suggests broader administration: distribution, policy paperwork, and program operations. State insurance codes generally define and regulate the managing general agent role; MGU is market shorthand rather than a separate license.
In practice: choose software for the functions you actually perform (rating, binding, reporting) not for the label on the letterhead.
Delegated authority
Delegated authority is a contractual arrangement in which an insurer grants another party, typically an MGA or coverholder, the power to perform functions the insurer would otherwise perform itself, such as underwriting, pricing, binding, and issuing policies. The scope of the delegation is written down: which classes, which limits, which territories, and what must be referred back to the carrier. Because the carrier still bears the risk, delegation always travels with reporting and audit obligations.
In practice: delegated authority is why carrier reporting is not optional paperwork for an MGA. It is the standing evidence that the authority is being exercised within its terms.
Coverholder
A coverholder is a company authorized to enter into contracts of insurance on behalf of a Lloyd’s syndicate, under a binding authority agreement. It is the Lloyd’s market’s term for roughly the role an MGA plays in the U.S. market. Coverholders operate under detailed reporting requirements, submitting regular premium and claims bordereaux to the syndicates whose pen they hold.
In practice: if your program has Lloyd’s capacity, your reporting obligations were defined in London, and your systems have to produce bordereaux in the format the binding authority specifies.
Bordereaux
Bordereaux are the detailed periodic reports, most commonly of premiums and separately of claims, that an MGA or coverholder submits to its carriers, listing the risks bound and the activity on them under a delegated authority. The singular is bordereau. Formats vary by carrier and by agreement, which is why assembling them by hand from system exports becomes a month-end scramble as programs multiply.
In practice: bordereaux production is the workload our carrier reporting layer exists to absorb, reading from the systems you already run and assembling the report each carrier expects. How often they are due is set by each carrier agreement, most commonly monthly or quarterly, which is why a program with several carriers rarely has a single month-end.
Binding authority
Binding authority is the delegated power to commit an insurer to a risk (to put coverage in force) without the insurer approving each policy individually. It is granted and constrained by a written agreement that sets classes, limits, territories, and referral triggers. In the Lloyd’s market, the binding authority agreement is the contract that makes a company a coverholder.
In practice: your systems should make the boundaries of your authority visible at the point of quoting, so a risk outside the box gets referred instead of bound.
Submission-to-issuance
Submission-to-issuance is the operational pipeline that carries a risk from the moment it arrives as a submission, through triage, rating, and quoting, to binding and policy issuance. In many growing MGAs the pipeline exists only as email threads, a spreadsheet rater, and re-keying between systems, so nobody can say where any given risk stands. Treating it as one tracked flow is usually the largest single operational upgrade available.
In practice: this is the flow our submission-to-issuance workflow builds as one tracked pipeline, with your underwriters approving every step that matters.
Rating engine
A rating engine is the software component that calculates premium for a risk by applying a program’s rating logic (its factors, tables, and rules) to the data in a submission. Many MGAs run rating in spreadsheets maintained by one or two people, which works until versions drift or the author leaves. A rating engine makes the logic executable, versioned, and consistent across everyone who quotes.
In practice: moving a spreadsheet rater into a rating engine behind a portal is often how producers get same-visit indications instead of waiting on email turnaround.
Broker/producer portal
A broker or producer portal is a self-serve web interface where retail agents and brokers submit risks to an MGA, receive quotes or indications, and track the status of their business. It replaces the email-and-PDF loop, so producers stop waiting on turnaround and the MGA’s team stops re-keying what a producer already typed. Done right, it feeds the MGA’s system of record rather than becoming another disconnected silo.
In practice: a broker portal your producers actually use is the most visible first build an MGA can ship, because the people it helps first are the ones sending you business.
AMS (agency management system)
An agency management system (AMS) is the system of record an agency or MGA uses to manage clients, policies, documents, carrier relationships, and accounting. AMS products were built for retail and wholesale agency workflows, and growing MGAs often stretch one to cover program operations it was never designed for. That gap (not the AMS itself) is usually where the manual work accumulates.
In practice: before assuming the core has to go, read our guide on whether you have to replace your AMS, the honest sequence usually starts with the workflows around it.
Policy administration system
A policy administration system (PAS) is the core software that creates and maintains the policy itself (issuance, endorsements, cancellations, renewals) as the authoritative record of coverage terms. Carriers run policy administration systems as a matter of course; an MGA issuing on delegated authority needs the same discipline at program scale. In smaller shops the AMS, a document template, and a spreadsheet often quietly share the job.
In practice: whichever system holds the policy record, every other tool (portal, rating, reporting) should read from it and write to it, not around it.
Data migration validation
Data migration validation is the process of proving that records moved from one system to another arrived complete and correct (through counts, field-level checks, and reconciliation reports) before the new system takes over. It is the difference between a migration you can evidence and a hopeful export. The failure mode it prevents is discovering a bad record on a live renewal, in front of a broker or a carrier.
In practice: validation is a named gate in our integrations and migration work, renewals are never cut over until it passes.
Human-in-the-loop AI
Human-in-the-loop AI is a design pattern in which software drafts, extracts, or recommends, and a person reviews and approves the output before anything binding happens. In MGA operations that means AI can propose a Classification or pre-fill a submission, but an underwriter’s approval is what moves the work forward. The pattern matters here because delegated authority makes the MGA answerable to its carriers for every decision, automated or not.
Named as an operating model rather than a pattern, this is what an AI Operational Workforce means: the mundane, redundant work of a program (intake, chasing, matching, assembly) is carried by software with feedback loops that correct it as it goes, while a person owns every decision that touches rating or binding.
In practice: this is how our governed AI for intake and Classifications is built, the software suggests, a human approves, and the approval is recorded.
E&S / surplus lines
Excess and surplus lines is the segment of the U.S. insurance market where risks that standard, admitted insurers decline are placed with non-admitted insurers through specially licensed surplus lines brokers. Non-admitted carriers are exempt from most state rate and form filing requirements, which gives them room to write unusual or fast-changing risks, with the trade-off that state guaranty funds generally do not stand behind their policies. Program business run by MGAs is often E&S for exactly this flexibility.
In practice: E&S flexibility shows up in your systems as program-specific forms, rating logic that changes more often, and carriers who still expect disciplined bordereaux on all of it.
Fronting carrier
A fronting carrier is a licensed insurer that issues policies for a program while transferring most or substantially all of the underwriting risk to reinsurers or another risk-bearing party, keeping little of the risk itself in exchange for a fee. Fronting exists because the parties who want to take program risk (often reinsurers) may lack the licenses or ratings to issue paper directly. The fronting carrier contributes its licenses, its ratings, and its regulatory standing.
In practice: a fronted program adds another party that expects timely, accurate reporting from the MGA, because the fronting carrier answers to regulators and reinsurers for business it did not underwrite itself.
Combined ratio
The combined ratio is the measure of an insurance program's underwriting performance: losses and expenses expressed as a percentage of earned premium. Below 100 percent means the program made an underwriting profit before investment income; above 100 percent means it did not. It is the number a carrier looks at first when deciding whether to keep, grow, or withdraw the authority behind a program.
In practice: this is the measure your carrier partners judge the program on, which is why the reporting they receive from you, and how quickly it arrives, is not administrative housekeeping. It is the evidence the number is built from.
Where to go from here
Definitions get you into the conversation; a map of your own systems gets you to decisions. Our MGA systems checklist turns this vocabulary into an inventory you can complete in an afternoon, and the MGA Systems Assessment turns that inventory into a phased plan priced against your actual scope.