10/23/2018

Program Business Update - Q3 2018

Specialization is the key to success in the booming program business market.


The competitive conditions seen in program business are showing no signs of abating and are driven by record levels of capacity. “There is simply a lot of carrier capacity that has entered the program space over the course of the past several years. The program sector is not only growing, it is one of the fastest growing sectors of the market,” says Ben Francavilla, President of AmWINS Program Underwriters.

In 2017, the growth of program markets in the U.S. outpaced the growth of the rest of the property-casualty market, according to Conning & Company. Francavilla also points to the Target Market Program Administrators Association’s (TMPAA) October summit as further evidence of this trend.

“Sixteen years ago, there were 12 carriers represented at the TMPAA summit. This year, there will be more than 60,” he says.

Capacity in the program sector is coming not just from traditional program carriers and E&S markets, but also from alternative capital, reinsurers, and even standard-lines insurers. “We continue to see an evolution of the market where carriers are looking to programs as a place to grow, especially when other products have become stagnant,” Francavilla says.

There is a great deal of competition across program business. With few exceptions, buyers will find competitive pricing, as well as broad and creative coverages, even in the loss-sensitive classes. However, there are some exceptions, the most notable of which is transportation.

“The transportation sector within the programs marketplace is mirroring the results outside the marketplace, so it is very difficult to try to place a new, standalone auto program. However, we have broad access to markets who will write auto as an ancillary piece within a program,” says Francavilla.

Capacity is likely to keep increasing as carriers look for additional ways to grow written premium. Although this robust market presents opportunities for retail brokers, it should be approached with some caution. Success in program business requires combining a wide range of knowledge about many different classes of business with a high level of specialization, something that underwriters and MGAs new to a line of business may not be able to provide. Retailers should also look for program administrators with proven underwriting skills, a history of profitability, an extensive distribution network, actuarial expertise, and effective supporting technology that can scale with increases in business.

“In the program space, the ability to truly and fully understand risk is essential,” Francavilla says. “We manage over 60 programs in the AmWINS Underwriting Division. Our program offerings cover a range of different risks and industry areas, with over three decades of experience, as opposed to just a year or two. That makes a huge difference in this market.”

Contact Us

To learn more about how AmWINS can help you place coverage for your clients, reach out to your local AmWINS broker.  If you do not have a contact at AmWINS, please click here.

Legal Disclaimer. Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.

(c) 2017 AmWINS Group, Inc.

Most Popular Insights

Four Key Additional Insured Endorsements for Contractors

11/13/18

Construction contract negotiations, which determine the kind and amount of insurance required for a construction project, can be time-consuming, complicated and frustrating. Project owners require contractors on a project to name the project owner as an additional insured on the contractor’s casualty insurance program. It's important that both project owners and contractors understand the coverage provided by these additional insured endorsements. This article discusses four common ISO additional insured endorsements related to commercial general liability policies purchased by contractors, including their limitations, conditions and exclusions.

Insurance Commissioner Orders Carriers to Pay for Mudslide Damages

03/22/18

The Thomas Fire, the largest fire in California's history, subsequently led to a mudslide on January 9, 2018, which caused a massive amount of damage in Santa Barbara and Ventura counties. The California Insurance Commissioner has issued a formal notice reminding carriers to pay for damage, citing the "efficient proximate cause doctrine." This article takes a closer look at the doctrine and how it has been challenged in court over the years.

Ordinance or Law Insurance Coverage

01/11/18

Ordinance or Law insurance coverage provides limited protection for costs associated with repairing, rebuilding, or constructing a structure when physical damage to the structure by a covered cause of loss triggers an ordinance or law. Compliance with ordinances and laws after a loss can add 50% or more to the cost of a claim. This article will help you educate your insureds on exclusions and limitations and help them take a proactive approach to their insurance program.

Employment Practices Liability in the Age of #MeToo

01/11/18

In 2017, the issue of sexual harassment – especially in the workplace – gained greater awareness as accusations of harassment by high-profile individuals were constantly in the news. In many cases, sexual harassment lawsuits seriously impacted businesses and their respective insurers. Employment Practices Liability Insurance not only provides protection against employee lawsuits, but can also help your clients mitigate their sexual harassment risks.

Why Your Employees' Driving Record Can Be a Reflection on Your Company

Due to the Doctrine of Negligent Entrustment, the consequences of allowing an employee with a poor driving record to operate any motor vehicle for work purposes extend beyond a possible traffic violation or accident. These seven tips will help you to proactively manage your drivers and maintain your CDL files as part of your fleet safety program.

8 Areas in which the Electronic Logging Mandate will Impact Trucking

The Federal Motor Carrier Safety Administration mandate which requires nearly all U.S. truck operators to use electronic logging devices (ELDs) to track duty status has been upheld in court and will take effect December 16, 2017. The mandate will impact not just the trucking industry, but the trucking insurance sector as well.

Sign Up For Our Monthly Newsletter

Sign Up