Program Business Premiums Topped $32.3 Billion in 2014

Industry Revenues Doubled in Five Years, Study Reports.

Wilmington, DE—The financial performance of commercial property casualty insurance program administrators continues to outpace the performance of the overall property casualty insurance markets. Program business premium revenues increased by 7.4 percent reaching $32.3 billion in 2014 up from $30.1 billion in 2013.  

The Target Markets Program Administrators Association (TMPAA) released the results of its annual research to document the size, characteristics, growth and other base-line information about the program insurance market.  “The State of Program Business Study” was presented at the Association’s 15th Annual Summit in Scottsdale, AZ this week.

In five years, total program business insurance revenues nearly doubled. The first study reported $17.5 billion in commercial insurance premium revenue in 2010. Today it is $32.3 billion.
 
Additional key findings in the just-released study included:

  • The number of insurance programs increased slightly with approximately 2,100 Programs and 1,000 Program Administrators.
  • While the rate of growth of the program industry has slowed from more than 12 percent in 2013, the industry’s current rate of more than 7 percent from 2013 still substantially exceeds the growth rate of the commercial lines market. The overall commercial insurance industry posted a 1.7 percent increase during the same time period.
  • The study reports that data collection and analysis continue to garner increasing interest among program administrators

“Our annual program business study once again confirms that program business is the fastest growing segment and one of the most vibrant sectors of the commercial insurance market,” said Heidi Strommen, president of ProHost USA and current president of TMPAA. “We are able to maintain our fast-paced growth despite signs of a softening market.”  She added that some of the many challenges facing program administrators include the use of predictive analytics and the establishment of start-up insurance programs.

The annual research study was sponsored by Allied World, BMS Intermediaries, The Chubb Group of Insurance Companies, Ironshore, NetRate Systems and Rockhill Specialty Programs.

The TMPAA defines 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 includes product marketing, underwriting selection, binding, issuing, and may also include billing, premium collections, data gathering, claims management/loss control and risk sharing. Specialists distribute these programs on a retail, wholesale or direct basis.

The study was conducted by the research firm Advisen and was released at the Association’s 15th Annual Summit on October 27, 2015. The analysis is based on the survey of program administrators and carriers. More than 200 program administrators and program carriers responded to the survey. Additional analysis was drawn from the Advisen databases of retail brokers, managing general agents, underwriters and wholesale brokers. Advisen is a member of the TMPAA.

The full “State of Program Business Study” report is available for TMPAA members. Others who wish to obtain a copy of the study should contact the Association.

Click here to access the 2015 State of Program Business Study.


Click on the company name below to learn more about the 2015 research sponsors.

Allied World Insurance Company
 •  BMS Intermediaries  •  Chubb Group of Insurance Companies  • Rockhill Specialty Programs  •  Ironshore  •  NetRate Systems