The TMPPA Summit will be held in Scottsdale, Ariz., Oct. 15 through Oct. 18.
TARGET MARKET REPORT
A growing sector
gathers for its annual
meeting in Scottsdale.
T he advent of more and more technology and concerns about capacity and rate are issues that will perplex and challenge every aspect of the commercial insurance business for years to come. One thing, though, is certain, the programs business is flourishing. How the sector should respond to emerging players with new technologies, as well as other
hot topics will be on the agenda at the Target Markets Program Administrators
Association’s 17th Annual TMPAA Summit, Oct. 15 through Oct. 18 in
Christopher L. Pesce, president of Maritime Program Group in Westbrook,
Conn., and the TMPAA president-elect, said the level of disruption within the
program market has yet to play out.
“I think what the program administrators are looking at is how to become
part of the solution — how to partner with Insurtech to come up with a better
mousetrap and keep themselves relevant,” Pesce said.
“It’s a tall order.”
While it’s tough to compete with “very sophisticated technology operators,”
program administrators are confident in their own ability to innovate and in
how quickly they can adapt to changes in the market.
John Colis, president and chief executive of Euclid Insurance Services
Inc. in Itasca, Ill., said that the sector is seeing “a flood of money” backing
new Insurtech start-ups aiming to digitize and, to some extent, automate the
Colis said it “remains to be seen” the extent to which these ventures will
compete with program administrators — or become program administrators
themselves. However, the issue is definitely on program administrators’ radar.
“What this looks like and how it is implemented remains to be seen and will
be interesting to watch,” he said.
A session at TMPAA’s Summit will explore specifically how Insurtech will
impact distribution networks utilized by program administrators, said Ray
Scotto, executive director of the Wilmington, Del.-based trade group. Most
administrators use the independent agent network, but some go to the market
directly, he said.
“We need to explore the impact on this entire industry segment.”
The group’s leaders will also discuss the results of a study that shows there
is continued growth of the program business segment of the market, and the
segment is outperforming the general commercial segment “by a pretty good
The managing general agent and program market growth in 2016 exceeded
that of the total P&C market by 32 percent, according to a July study by
Conning, an investment management company for the global insurance
In 2016, comparable firms in Conning’s MGA database grew by 4. 9 percent
compared to 3. 7 percent for the P&C market overall.
“I think the program business is somewhat in vogue right now, with more
carriers and surplus capacity within the industry signing on,” Pesce said.
“Deploying that capacity with
program administrators is cost
effective and speedy. Whether it’s a
start-up carrier or a carrier simply
looking for expansion, the fact that
so much surplus is in the industry
right now is to the benefit of program
Another topic of importance is
heightened interest in the space from
large acquirers, Colis said.
The healthy segment, he said, is
“… the companies that will be
most successful will be the
ones that can differentiate their
offerings through product,
service or analysis such as
— Jerry Prendergast, insurance programs
underwriting manager for specialty markets, Munich
• Program administrators are
confident they can co-exist with
• Program business is growing
faster than the P&C market overall.
• Insurtech investments are
flooding into the sector.