Program Administrators: Specialists, Leaders and Innovators
Insurance | Mike Schofield, MiniCo Insurance Agency | Jul 6 2021
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Program administrators may be thought of as a secret weapon for savvy agents and brokers; however, according to a recent survey, their profile and impact on the insurance industry are growing rapidly. Tarket Markets Program Administrators Association's publication The TMPAA State of Program Business Study 2019, reports that program business is growing at a faster rate than the overall commercial insurance marketplace with over $40.5 billion in revenue in 2018, up from $17.5 billion eight years earlier.
Five Benefits of Working With a Specialized Program Administrator
1. Focus on Niche Markets
For independent agents and brokers working with clients in specialty industries or niche markets, program administrators are valuable resources. Program administrators tend to focus on specific industries, markets and exposures, which gives them a higher level of experience and underwriting expertise than a more generalized wholesaler. Plus, agents and brokers can approach a specialized program administrator knowing in advance that they have knowledge of and an appetite for that niche business.
2. Access to an Established Network
Agents and brokers working with a program administrator have access to an established network of specialty programs. A knowledgeable underwriter who identifies an exposure or specific coverage need can leverage their relationships within the network to find the appropriate insurance solution. This gives them an ability to tailor a quote to the specific needs of a client with enhanced flexibility in coverages, deductibles and limits, resulting in a truly customized solution.
Agents and brokers want to satisfy their clients' needs with speed and efficiency, and that is one of the key characteristics of program administrators. Many are small to mid-size businesses and tend to be more responsive and agile when it comes to expediting the quote-to-issue process. Unlike carriers and larger insurance providers, program administrators may have a better understanding of agency or brokerage issues. Many have been granted underwriting authority by the carrier and call upon their experienced in-house teams to issue quotes, bind and service policies, and handle claims.
4. Risk Management
Their specialization and experience with specific industries and exposures give program administrators an enhanced understanding of the risk management and loss control issues affecting their niche markets. Some program administrators offer this information to agents and brokers as a value-added service. Since the program administrator is accountable to the carrier for the program's profitability, it makes good business sense for them to help educate policyholders on tips and tools to become better underwriting risks. These resources may come in the form of brochures, blog posts, videos, newsletters, emails, and more. In some cases, the program administrator may create risk management content specifically for clients to act as a resource and conversation starter when meeting with their agents or brokers.
5. Leaders in Innovation
Program administrators combine underwriting authority and expertise with experience gained from working closer to the end user, which means they frequently identify emerging risks and issues. As customer needs evolve, the program administrator is on the front line to address those changes. As a result, they have become a leading force for innovation in designing coverages, promoting enhancements and developing technology for niche programs. In many ways, program administrators function as a key entrepreneurial force pushing change up to the carrier level.
Working with program administrators can have many benefits for agents and brokers. As with any new professional contact, it is a good idea to consider the program administrator's length and breadth of experience in the class of business being marketed, the carrier partner for the program, the carrier rating, and their endorsement by or involvement with any associations related to that industry.
Mike Schofield is president and CEO of MiniCo Insurance Agency, a full-service managing general agency that offers multiple specialty property and casualty insurance products for a variety of unique industries and exposures. He has more than 35 years of experience in the insurance industry with the last 20 years serving as the top executive of MiniCo’s property and casualty programs. Mike holds a bachelor of business administration degree in management from Lamar University.
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