Starting an MGA sounds straightforward on paper: find a niche, build a product, get capacity, sell policies. In practice, the path from concept to contract is longer, harder, and more nuanced than most founders expect. In a recent InsurTech Association webinar, two seasoned MGA advisors, John Willemsen, founder of Willemsen Advisors, and Somil Jain, a credentialed actuary with over 25 years of experience at firms like AIG and Travelers, shared the lessons they’ve learned helping dozens of MGAs get off the ground (and watching others stall out). Bob Sargent, ITA co-founder, moderated the session, drawing out practical guidance that any aspiring MGA founder should hear before their first carrier meeting.
The message was consistent from both panelists: this is doable, but only if you come prepared. The MGA market is a $110 billion space with thousands of programs already competing. Having a good idea is the starting line, not the finish.
Takeaway 1: Capacity Is Everything, and Carriers Will Test You
Capacity is the single most important thing an MGA needs. Without a fronting carrier and a reinsurance panel, you don’t have a business. “Without capacity, you’re not an MGA. You can’t really do much,” Jain said. But getting capacity means surviving a gauntlet of scrutiny. You’ll sit across the table from chief underwriting officers and actuaries who have reviewed thousands of business plans. Willemsen put it bluntly: “I’ve seen some 3,000 business plans of MGAs in this space. And so have many of my colleagues and peers across the industry. They’re going to ask a lot of tough questions, and you have to be prepared.”
What does “prepared” look like? Willemsen recommends having 25 to 30 concrete data points in your business plan, each backed by evidence. Don’t just claim a 57% ultimate loss ratio; explain how you’ll get there, what happens if you miss it, and what sensitivity analysis you’ve run. Jain echoed this with a practical test: “Make sure you can go 10 questions deep on every piece of data or claim in your deck.” If you can’t, you’re not ready for that carrier meeting. And showing up half-baked has consequences. Willemsen warned that pitching too early creates “carrier fatigue,” making it harder to come back even with a stronger plan.
Takeaway 2: Distribution Kills More MGAs Than Bad Underwriting
Both panelists identified distribution as the primary reason MGAs fail in their first three to five years. “Distribution is the number one killer of programs that I have seen,” Willemsen said. Founders consistently overestimate their ability to generate premium volume. They project $10 million in 18 months and end up at $2 million, which strains the carrier relationship and undermines the economics of the program.
Jain broke down MGA failure into three categories: insufficient distribution volume (capacity or funding gets pulled), poor loss ratios (you’re writing business, but it’s unprofitable), and founder team breakups (assumptions not written into contracts lead to infighting). Of those three, he noted, distribution shortfalls are the most common. The fix starts before launch. “When you think about your distribution, make sure you’re double-checking your assumptions,” Willemsen said. Validate with brokers. Get references. Have a specific, detailed plan for how premium flows in, not just a hockey-stick projection.
Takeaway 3: Start Small, Stay Fractional, and Know What You Don’t Know
Jain offered a clear framework for early-stage founders: start small, start fractional, and be honest about what you don’t know. “You don’t need to hire a full-time underwriter day one,” he said. “Think about fractional. Think about people who have done something like this before and can help on a fractional basis until you get to the point of needing that lead underwriter hire.”
Willemsen agreed, recommending that founders think about three roles from the beginning: an underwriter, an operations person, and a distribution lead. You don’t need all of them full-time on day one, but you need the expertise covered. Jain described two models: finding the rare “unicorn” who brings technical expertise, credibility with carriers, and a willingness to work for equity; or assembling a fractional team where different people cover different needs. Either way, the key is having enough insurance knowledge in the room. “If a deck comes across our desk and basically says, ‘I know nothing about insurance but I’m a very strong tech person,’ we can sniff that out immediately,” Willemsen said. Technology is welcome, but it has to be backed by underwriting substance.
The panelists also covered admitted versus surplus lines strategy (surplus lines offers rate and form flexibility but adds regulatory complexity), NDAs with carriers (mutual NDAs are standard; be wary of anyone who refuses to sign one), and product-market fit in insurance (where hit ratios and renewal retention matter more than the 400% year-over-year growth that tech investors expect).
The full recording of this session is now available on our site. Both Somil Jain and John Willemsen participate in ITA’s monthly office hours program, where members can book free 15 to 20 minute meetings for individual guidance. Visit insurtechassociation.org for details and upcoming events.
