UMAs are very similar to franchises in other industries – they are strictly described as agencies that act on behalf of a registered insurer or Lloyd’s agent using an outsourced model. UMAs are effectively “outsourced branches” of insurance companies that do all the work of an insurer. The UMA uses the capital of the insurance company and receives binding authority from the insurance company on whose behalf it underwrites. UMAs often have a specific focus in a niche or specialist class of insurance business. They are also called Managed General Agents (MGAs) in some overseas markets.

These agencies are typically started by entrepreneurs with experience in the insurance industry or individuals who have identified a niche opportunity in the insurance market. Underwriting managers are appointed agents of the insurer and are usually involved in the risk selection and pricing, policy, claims and premium administration. UMAs receive outsource/administration fees and are also eligible to participate in the underwriting profits that they generate for the insurance company.