March 1st, 2012

Poised for Growth: Guy Carpenter’s 7th Annual Specialty Insurance Program Issuing Carrier Survey, Part I

Posted at 1:01 AM ET

The Program Administrator and Managing General Agent (PA/MGA) market continues to be an important part of the overall insurance marketplace. When Guy Carpenter and Company (Guy Carpenter) conducted its first survey in 2005, little had been published about this exciting segment. Agencies, underwriters, reinsurance intermediaries and third party service providers such as claim administration firms, all were asking the same questions:

  • How big is the program market?
  • What do program carriers look for in programs?
  • What types of PA/MGAs are carriers looking for?
  • Which lines of business are most attractive to program carriers?

The above list is not exhaustive.

Now, seven years later, the same questions are being asked, and Guy Carpenter continues to provide the industry with our annual survey analysis of the current program marketplace from the program issuing carriers’ perspective.

While Guy Carpenter attempts to maintain survey consistency from one year to the next, we have to balance this goal against the emerging needs of the PA/MGA marketplace. Further, respondents change each year. We provide this service as a means of benchmarking key industry issues rather than as an effort to capture granular detail. Our goal is to shed light on the direction of the PA/MGA market and stimulate appetites for program business. Once again, we thank all who replied for investing their valuable time in assisting us with this effort.

About This Year’s Respondents

As in past years, the respondents were a mix of both traditional insurance companies that have specialty program operations (69 percent) and true, specialty insurance carriers (31 percent). This is the highest percentage of “traditional” carrier response we have had over the course of the seven years we have been conducting the survey and it represents a 13 percent increase over last year’s results. It would appear that as carriers continue to search for new areas of premium growth and market share, the traditional insurance companies see programs as one way of achieving these goals.

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Those responding this year are widely licensed in more than 40 states with both admitted (92 percent) and non-admitted (87 percent) paper. These represent the highest percentages over the course of the last five years.

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The size of programs targeted by the respondents this year shows a continuing trend towards smaller programs, with a majority of the carriers (76 percent) targeting programs with premium volumes between USD5 million and USD15 million.

All respondents attend one or more annual industry conferences that involve the program space. The American Association of Managing General Agents (AAMGA) and the National Association of Professional Surplus Lines Offices (NAPSLO) continue to be seen as valuable conferences for the carriers. However, respondents ranked the Target Markets Program Administrators Association (TMPAA) conference as the number one conference in terms of value provided.

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