Launching an MGA: getting your first product priced and live

Starting a managing general agent involves a long list of tasks: securing capacity, agreeing a binding authority, setting up distribution, building compliance processes and hiring underwriters. Pricing sits in the middle of all of them. Until a product can return a correct price in the channels you plan to sell through, there is nothing to sell.

This article walks through the steps between an agreed rating approach and the first live quote, and the decisions that make the most difference for a new MGA.

Start with the capacity partner's requirements

Your capacity provider, whether an insurer, a Lloyd's syndicate or a reinsurer, will have views on how the product is priced. Before any model is built, it helps to agree:

• Who owns the rating guide. Some partners provide the rates. Others expect the MGA to propose them for approval.
• What can change without sign-off. Many binding authorities allow small adjustments within agreed limits, with larger changes needing the partner's approval.
• What evidence they expect. This usually includes test results, a record of changes and regular reporting on quotes and policies written.
• Referral and decline rules. Risks outside appetite should be declined or referred to an underwriter, and the partner will want to see these rules written down.

Getting these points agreed early avoids rebuilding the model later to meet requirements nobody mentioned at the start.

Write the rating guide down properly

A rating guide is the specification for the model. It should set out every input, every rate table, the order in which factors apply, rounding, minimum premiums, fees, taxes and the underwriting rules. It should also include worked examples with exact premiums.

The worked examples matter more than they appear to. They become the tests that prove the model prices correctly, and they settle questions about the order of calculation that the written rules leave open. Ten or twenty examples covering the main risk types, the band boundaries and each decline and referral rule is a good starting point.

Build the model

A new MGA has three broad options for the model itself:

1. A spreadsheet rater. Quick to start, but hard to serve in real time, hard to audit and easy to break. Our article on replacing a spreadsheet rater covers the risks in more detail.
2. Software built in-house. Flexible, but it needs developers who understand pricing, and every rate change becomes a development task.
3. A dedicated rating engine. The model is configured rather than coded, tested on every change and served through an API from the start.

For most new MGAs the third option is the fastest route to market. With Ptally, our consultants build the model from your rating guide using AI to extract the tables and draft the calculation, then check it against your worked examples. The model is readable JSON that your underwriters and your capacity partner can review. You can see a complete example on our model building page.

Test before launch

Every worked example should match to the penny before the product goes live. Beyond the examples in the rating guide, add tests for:

• ages, sums insured and other values on either side of each band boundary;
• every decline and referral rule, plus cases that sit just inside each rule;
• unusual but valid combinations of inputs.

Keep the tests with the model so they run again on every rate change. When a test fails, the quote debugging trace shows the value of every input, lookup and formula, so the cause can be found quickly.

Choose your first channels

Most MGAs launch through one or two channels and add more once the product is stable. Common starting points are:

• Broker platforms, which usually need access to rates through an API.
• Embedded partners, where the quote sits inside another company's customer journey.
• Your own website, using an embedded quote form.
• Price comparison websites, which need fast responses at high volume.

If the rating engine serves every channel from one model, adding a channel later is a configuration task rather than a new build. The Ptally API and embedded forms run from the same model, so prices stay consistent wherever the product is sold.

Monitor rates after launch

The first months of trading show how the pricing performs against real demand. Useful things to track include:

• quote volumes and conversion by channel;
• the share of quotes declined or referred, and the reasons;
• average premium compared with the rating guide's expectations;
• response times, particularly on high-volume channels.

Expect to make rate changes early. With a tested model, a rate change is made in a draft version, checked against the test suite, approved and published. Every change is recorded, which gives your capacity partner the evidence they ask for.

Why upfront cost matters for a new MGA

A new MGA usually has limited funds before premium starts to arrive. Paying a licence fee and funding an implementation project before writing a single policy uses money that could go on underwriting talent and distribution.

Ptally has no implementation fee and nothing to pay upfront. On the Performance plan, the fee is up to 1% of the gross written premium your models write, so cost grows with the business. There is also a flat fee option per live model for MGAs that prefer a fixed cost. Details are on our pricing section.

Getting started

Send us your rating guide, or the draft you are working on with your capacity partner. We will come back with a working, tested model that you can take to your partner for review. There is no implementation fee and nothing to pay upfront. Talk to our team to get your first product priced and live.