What is a Managing General Underwriter?

As an MGU, RSG Transactional Risks Europe participates in a contract known as a binding authority agreement (the Binder).

The Binder appoints RSG Transactional Risks Europe, by name, to underwrite on behalf of and bind the risk capital of the Insurers who are a party to the Binder.

For 2019, RSG Transactional Risks Europe has a binding authority agreement for policy limits up to £/$/€100m for Warranty and Indemnity Insurance &I transactions and £/$/€50m for Commercial Tax Insurance. Our Insurers have each agreed to take a percentage of each risk bound meaning that RSG Transactional Risks Europe does not have to ask approval for underwriting guidelines, policy wording or pricing. RSG Transactional Risks Europe acts as agent under the Binder and has full authority to bind the Insurers under the Warranty & Indemnity and Tax insurance policies it provides.

Insurers commit risk capital on an annual basis through the binder. They agree to participate on all of the risks that RSG Transactional Risks Europe underwrites and accepts on their behalf over the course of that year.

The list of Insurers is attached to every policy RSG Transactional Risks Europe issues and remains unchanged for the year. The significance of this arrangement is that RSG Transactional Risks Europe does the underwriting and binding of insurance capacity but the Insurers pay any claims through a dedicated lead insurer to ensure the insured deals with a singular voice representing all Insurers on the Binder.