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Program Business Market Hits $17.5 Billion in Gross Written Premiums

Posted on 01 Nov 2011

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The Target Markets Program Administrators Association (TMPAA) released the report and results of its research to document the size, characteristics, growth and other base-line information about the program insurance market. The first-ever "The State of Program Business Study" was presented at the Association's 11th Annual Summit in Scottsdale, AZ.

Respondents to the survey reported that the program business continues to grow despite falling rate levels as a greater number of program administrators saw premiums rise in the past year. With program administrators seeing increasing value in placing specialized risks, survey respondents are optimistic about prospects for future growth.

The study pegged the program administration market at $17.5 billion in premiums. It is composed of about 750 program administrators and involves an estimated 1,750 individual programs.

TMPAA describes program business as insurance products targeted to a particular niche market or class, generally representing a book of similar risks placed with one carrier. Program Administration may include marketing, underwriting selection, binding, issuing, billing, premium collections, data gathering, claims management/ loss control and possibly risk sharing. Specialists distribute these Programs on a retail or wholesale basis.

Interestingly, program administrators and insurers are in sync when it comes to their view of the components crucial to establishing a successful program. On top of both group's list is underwriting profitability. Other key factors for the two groups are gross written premium, commission rate and growth rate.

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, carriers and managing general agents. Additional data and information was drawn from the Advisen databases of retail brokers, managing general a