Top 10 Program Business Takeaways from Target Markets Summit Rob Reed, VP Sales | Oct 31, 2018

Alternative Capital

Program insurance continues to be a bright spot in an otherwise challenging market. It’s growing at more than double the rate of the market overall and attracting traditional and new players alike. And what better place to take the pulse of the program market than at the annual gathering of this market’s signature event – the Target Markets Annual Summit.

In a prior post, The Rise of the MGA, we described how the insurance value chain is shifting in the MGA’s favor. In this post, we offer some new observations about how programs are changing the behavior of players up and down the value chain.

  1. Growth of program business continues.  Attendance at the annual Target Markets Summit was up 10% over last year, and included a host of new entrants, new markets, and new service providers. Interest in programs is rising.  
  2. Retail agents and wholesalers entering programs. These players are ‘evolving’ into the program space – consolidating existing risks, identifying markets, and establishing underwriting expertise. 
  3. Increase in wheels-based ambitions. Many program administrators and retail/wholesale specialists are pursuing trucking and other commercial auto risk types. Perhaps the appetite for commercial auto business is shifting, at least among producers.
  4. Established players seeking to smooth onboarding of new programs. Technology and operating efficiencies are improving the speed of program launches – and making it easier for program administrators to change markets and carriers to capture new books.
  5. Data centricity is key. MGAs want to own their actuarial and operational data, and carriers are beginning to acknowledge this new paradigm.
  6. Carriers trying to please everyone. Many carriers hope to offer a system to MGAs but recognize MGAs may want to acquire their own. In response, carriers are trying to be agnostic about how they interact with and share data. 
  7. Compliance is critical (whether the carrier or MGA owns the system). Carriers are still struggling to put processes in place to support compliance in this new paradigm.
  8. InsureTechs now coming to Target Markets. They know insurer capacity is available at this show (with 60+ carriers attending), particularly in programs. Program teams are already configured to onboard new books, and many InsureTechs fit nicely into the program model.
  9. Best of breed rules. Few, if any, carriers are trying to build systems to support programs. If anything, the program units of carriers are seeking a separate system for programs that is responsive, economical and trusted. The era of a single system for everything seems to have passed.
  10. Speed is still a top priority. Program products are complex, and the pace of change is fast. Flexibility and expertise are required in this space. Large, multi-year system projects don’t cut it in the program space.

Clearly, the program market is evolving. Whether you are a long-time incumbent or recent entrant, standing still is not an option. Opportunities are there for the taking if you can adapt to the new rules of the game.

Rob Reed began his career in the insurance industry in 1997. Starting as an Underwriter Trainee at Prudential, Rob went on to become an agency interface specialist at CGU Insurance Limited and OneBeacon Insurance companies. With his deep domain expertise, Rob joined Instec as a Sales Executive in 2001, and has since helped dozens of insurers solve challenging operational issues with tailored solutions. As Vice President of Sales, Rob serves as a key partner, guiding prospective clients through the sales engagement and initial implementation processes.