Evaluating Capacity Partner Fit: Guide for Aspiring MGAs

MGA101 is a video series designed for aspiring MGAs: Featuring Chris Lowell (Managing Director, InnSure) and Somil Jain (Principal & Senior Consulting Actuary, Lewis & Ellis) who break down the complexities of securing risk capacity in practical, easy-to-digest conversations.

This blog explores the factors that go into building a strong MGA–capacity partnership — beyond the financials, covering responsibilities, philosophical alignment and long-term partner fit.

Entering an MGA–Capacity Partnership

Entering an MGA–capacity partnership involves more than just financial discussions. Here are several key aspects that Somil advises MGAs to clarify early on:

• Actuarial modeling- who will build the models?
• Underwriting guidelines- who defines them?
• Quote and bind systems- who creates and manages them?
• Policy forms- who drafts and updates them?
• Technology- who develops and maintains the platform?
• Compliance reporting -who is responsible for it? (This last point is especially important.)

In most cases, the carrier providing the paper and capacity should be able to take on some of these roles. The exact responsibilities vary from carrier to carrier, depending on their expertise, resources, and overall management style. Some carriers or reinsurers, even within the same panel, may take a hands-off approach, if loss ratios fall outside the target range. Other insurers might be much more active, running regular audits and maintaining a stricter oversight.

To evaluate which partnership dynamic would better support your MGA’s growth, check out this video.

Assessing Capacity Partner Fit

Chris suggests evaluating capacity partner fit not just by the level of support provided, but also by how that support feels.

For new MGAs, interaction with carriers is likely daily, especially around red flags, referrals or underwriting triggers. Over time, this may shift to weekly or monthly reviews. During this evolution, it’s worth asking: does the capacity provider’s support feel positive or negative?

• If the relationship feels like constant oversight, it could stifle learning, limiting the MGA’s growth.
• However, if their support comes across as timely and constructive advice from a partner, that’s positive support.

Partnerships where incentives are aligned and adversarial tension is low make for solid partnerships, according to Chris — though they can be hard to find.

Another positive sign is when capacity providers actively connect MGAs with valuable resources and people in their network. Introducing MGAs to resources that can open new doors for them demonstrates their genuine investment in the MGA’s long-term growth.

Aligning Philosophically

If an MGA’s underwriting philosophy is rooted in targeting the safest risks, it makes sense to work with a capacity provider who shares that perspective. On the other hand, innovative and emerging products require a forward-thinking carrier willing to back less traditional approaches.

Long-Term Capacity Fit Vs. Better Terms

Lastly, Somil advises MGAs to prioritize long-term fit over short term advantages. A carrier offering the “best” terms today may not be the right partner for tomorrow.

MGAs that are starting out may overlook long-term fit in favor of securing paper- But the right capacity partnership not only provides financial support — it provides room to mature and grow. With philosophical alignment and mutual trust, capacity providers are more willing to overlook early missteps and support the MGA over multiple treaties.