Wilmington, DE—The financial performance of commercial property casualty insurance program administrators continues to outpace the performance of the overall property casualty insurance markets. Program business premium revenues increased by 9.8 percent reaching $30.1 billion in 2013 up from $27.4 billion in 2012.
The Target Markets Program Administrators Association (TMPAA) released the results of its annual research to document the size, characteristics, growth and other base-line information about the program insurance market. “The State of Program Business Study” was presented at the Association’s 14th Annual Summit in Scottsdale, AZ.
David Springer, TMPAA president President/COO of program administrator NIP Programs, said “once again, this year’s survey results demonstrate the impact that program administrators have on the marketplace – clearly outpacing the other major segments of the property casualty insurance market.”
More than 60 percent of the 285 TMPAA program administer members responded to the survey. In addition to the questions about the size, growth and profitability of the program business marketplace, the survey asked new questions about underwriter compensation and social media marketing strategies.
• Program business is growing more quickly than the overall commercial insurance marketplace. While the size of program business rose 9.8 percent, the growth in direct premiums written for commercial lines increased by only 4.6 percent.
• A closer look at recruitment and training trends in the program space shows that hiring and retaining qualified personnel continues to be a major challenge. Responses indicate that administrators are boosting their training programs to better support the needs of both new and experienced underwriters.
• Survey responses show that administrators do not see social media as an effective marketing tool. LinkedIn and Facebook are the most commonly used social media services.
• A comparison of 2014 administrator responses to 2013 responses showed an average of 3.1 percent growth in the number of programs.
Heidi Strommen, incoming TMPAA president and president of ProHost USA, said “I know of no other trade association that can boast that more than half its members responded to a comprehensive survey of its industry.” Strommen said that, based on the survey’s results, “recruitment and training of qualified job candidates, especially for entry level jobs, continues to be a top priority for both program administrators and program carriers.”
The research study and survey was conducted by Advisen, the commercial insurance research and data analytics firm. The analysis included a survey of program administrators and carriers that operate in the program industry segment. Additional data and analytics were drawn from the Advisen databases of industry metrics.
The TMPAA defines “Program Business” as insurance products targeted to a particular niche market or class, generally representing a group of similar risks placed with one carrier. Administration is done through Program Specialists who have developed an expertise in that market. Administrative responsibilities are negotiated between the Specialist and Carrier, but would include underwriting selection, binding, issuing, billing, and often times marketing, premium collections, data gathering, claims management/loss control and possibly risk sharing. Program Specialists typically target their niches through differentiation either in product, risk management services, delivery mechanism or price. Specialists can distribute these programs on retail, wholesale or direct basis.
The full “State of Program Business Study” and power point presentation of the report will be available in the member’s section of the TMPAA website, www.targetmarkets.com. Others who wish to obtain a copy of the study should contact the Association.
The Target Markets Program Administrators Association is an organization dedicated to the unique challenges of insurance program administration. The TMPAA’s mission is to help program administrators conduct their business more efficiently, with greater proficiency and profitability. The organization provides its membership with an array of business and educational services including access to program carrier decision makers, best practice recognition, Target University, program marketing and distribution, Industry studies and two annual member meetings.
For additional information, contact Ray Scotto – Executive Director at 877.347.5700 or [email protected]
