The “State of Program Business Study” was presented at the Association’s 13th Annual Summit in Scottsdale, AZ. The study pegged the program administration market in 2012 at $27.4 billion in premiums up from $24.7 billion in 2011.
Premium revenues increased 10.8 percent in 2012, more than three times the rate of premium growth in the overall commercial insurance markets. Premiums in the commercial lines market increased only 3.3 percent, according to figures from AM Best. Roughly one-in-ten commercial insurance dollars are distributed through the Program Business distribution channel.
Among the reports other findings:
- Carriers and program administrators report an estimated 2,075 individual programs – an increase of 3.5 percent from the 2,000 individual programs estimated for 2011.
- The number of confirmed organizations in the United States that meet the definition of program administrator remains relatively unchanged. From the estimated 950 program administrators estimated in the 2012 survey, TMPAA recorded a slight increase to 1,000 for this year’s survey.
- Program administration is a growing and vibrant market. Many administrators reported growth in their book in a challenging market place. They are also optimistic that this growth will continue in the future.
Program Administrators reported an 84 percent renewal rate in 2012, unchanged from 2011. The research consisted of two surveys – one distributed to Program Administrators and a second distributed to insurance carriers that use the program distribution channel.
The research study and survey was conducted by Advisen, the commercial insurance research and data analytics firm. The analysis included a survey of program administrators, carriers and managing general agents. Additional data and information was drawn from the Advisen databases of retail brokers, managing general agents and underwriters and wholesale brokers.
Click here to access the 2013 State of Program Business Study