Program Business Market Grew 9.8% in 2013: TMPAA

November 2, 2014

Commercial property/casualty insurance program administrators outperformed the overall property/casualty insurance market last year. Program business premium revenues increased by 9.8 percent, reaching $30.1 billion in 2013 up from $27.4 billion in 2012.

In comparison, the total P/C industry grew commercial lines premiums by only 4.0 percent in 2013, according to ISO.

The Target Markets Program Administrators Association (TMPAA) released the results of its annual “The State of Program Business Study” at the association’s 14th Annual Summit in Scottsdale.

More than 60 percent of the TMPAA’s 285 insurance 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.

The program business growth in 2013 slowed just a bit from 2012, when, according to the last TMPAA study, program revenues grew 10.8 percent. TMPAA reported 5 percent growth for 2011.

David Springer, TMPAA president and 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.”

An insurance program in TMPAA’s definition is an insurance product targeted to a particular niche market or class, generally representing a group of similar risks placed with one carrier.

Survey responses indicate that the number of programs grew about a 3.1 percent in 2013.

Among the TMPAA study’s key findings:

  • Hiring and retaining qualified personnel continues to be a major challenge. Administrators are boosting their training programs to better support the needs of both new and experienced underwriters.
  • Program administrators do not see social media as an effective marketing tool. LinkedIn and Facebook are the most commonly used social media services.

Heidi Strommen, incoming TMPAA president and president of ProHost USA, 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 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.

Source: Target Markets Program Administrators Association (TMPAA)

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