What carriers check before granting capacity
Governance, loss data and limits: the checklist that decides a capacity negotiation — and how to prepare for it.
Every MGA begins to exist on the day a carrier signs the authority letter. Before that, there is only a thesis. And what separates an approved thesis from a declined one is almost never the niche — it is how well the operation can prove it knows how to govern itself.
The assessment is more predictable than it looks. After a few of these conversations, the checklist is always the same.
1. Who underwrites, and with what record
The first question is about the person. How many years in that specific line, on which books, with what result. The carrier is assessing technical judgement, and technical judgement is not demonstrated in a deck — it is demonstrated in a verifiable loss record.
2. Data: what exists and what is assumption
Then come the numbers. If there is a live book, the carrier wants loss ratio by cohort, frequency, severity and reserve development. If there is not, it wants the source behind every assumption in the plan — and treats anything without provenance as risk.
An assumption without a source is not a number. It is an opinion with decimal places.
3. Governance and authorities
Here the conversation changes register. Saying there is discipline is not enough; you have to show the mechanism: written appetite, authorities by level, a technical committee on a cadence, an audit trail for every non-standard decision. It is exactly what we cover in governance as the condition for scale.
- Documented appetite — what is in and what is out, before the first quote.
- Limits and referral — what the MGA decides alone and what goes up to the carrier.
- Price review — how often assumption is compared against actual.
- Audit — how the carrier will verify all of it twelve months from now.
4. Operations: issuance, settlement and claims
An MGA that cannot issue on time, close a bordereau on the right day and notify claims with complete data creates operational cost for the carrier — and that lands on the books before technical margin does. Technology stopped being a differentiator and became a prerequisite.
5. Economics and capital
Finally the carrier looks at the economics: commission, profit commission, channel payout, and who funds the operation to breakeven. An undercapitalised program is a continuity risk, and continuity risk weighs more than an optimistic projection.
Where a platform changes the conversation
Three of the five points — governance, operations and capital — do not depend on the underwriter. They depend on the structure around them. That is why a program entering through a platform arrives at the table with half the checklist already answered: the governance is the same for every MGA in the group, the platform is the same, and the set-up capital is already committed.
The underwriter answers for what only they can: appetite, technical discipline and network. See the MGAs already trading on that base — or start a conversation about your program.
Half the checklist is already built. The other half is yours.