Regional vs. National Good ideas don’t have to be national. They can start small. The question is who grows them.


Prove you can do it in your back yard fi rst before you try to sell an idea to a carrier that’s going to have to invest a lot of money to fi le a product.


Glenn Clark, Rockwood Programs and Target Markets Founder


Insurance programs can thrive in limited regions, but growing them into multi-state and national efforts requires proper licensing, infrastructure and carrier relationships.


The path by which a program might expand its reach depends in part on whether it is focused on admitted or non-admitted offerings.


Developing programs based on admitted business means fi ling for permission in respective states, subjecting the coverages to regulatory review. Programs based on non-admitted products can move quickly but must be handled by properly licensed distributors.


That ability has traditionally been one of the principal strengths of wholesalers, including MGAs and program administrators. “I maintain 50 state E&S (excess and surplus) licenses. Each one of the states has a different rule. Each one of the states has a different bond. I have to get fi ngerprinted 15 times a year,” Glenn Clark said. “It’s sacrosanct. I must do that.”


Clark recommends that those considering launching an insurance program might start in a smaller way by demonstrating a program’s viability in one state or region. Given that success, it may be easier to convince a carrier to support the program on a larger basis. “Pretty much they’re not going to support you unless you’ve got a history of doing it before,” Clark warns.


“The bigger issue in someone going national versus regional is their ability to penetrate those particular markets,” Vincent Pugliese said. “In the majority of cases where they have one program, they’re typically more of a regional type of orientation. That’s where their sub-producer base is. That’s where they have the greatest penetration.”


Copyright © 2010 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.


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