Getting With the Program


The brightest star in the wholesale/specialty arena appears to be program business, in which program administrators — specialized brokers who have an in-depth understanding of a particular market segment — work with carriers to target a niche.


“An underwriter really understands those products and really understands what he’s selling.”


Steven DeCarlo, AmWINS


In an age that increasingly values the twin concepts of community and specialization, attention is turning to the niche players who dominate the market for program insurance business. Programs also appear to be an exception to overall patterns of limited growth or even declines in surplus lines, wholesale and specialty premiums.


Program administrators serve a narrowly defi ned audience, handling marketing, distribution and other functions. They work closely with carriers that assume the risk.


“I have come to realize that the program administrators, the people who live and breathe a particular segment, learn and study that segment, do a deep dive into that client base,” Matthew Power said. “They bring an awful lot of value.”


One advantage of programs is that the business they develop is less likely to migrate if pricing becomes an issue, panelists said. Program administrators are also savvy marketers who aggressively harness technology.


Some carriers are willing to work with program administrators because the economic fortunes of program administrators are tied directly to the profi tability of the insurance business placed.


Programs may also serve as farm teams for insurance carriers. “The problem is they get bought by insurance companies once they get really good,” Steven DeCarlo said. “There’s the other side of the equation.”


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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