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Special Section Sponsored by Target Markets Program Administrators Association Carriers Just a few years ago, property and casualty insurers were looking at the program administration arena with some skepticism. Some questioned whether program business could remain profitable over the long haul and whether agencies that did program business were disciplined enough to remain focused on niche markets. Today, of course, all that has changed. Program administrators and carriers that do program business now have a mutually beneficial relationship. “We are the quarterback on the team,” says Dan Meyer, national program underwriting director for Fireman’s Fund Insurance Companies. “We provide capital, the paper on which to underwrite, loss control expertise and actuarial experience. We work with program administrators to jointly develop models and structures for program business,” he says. Meyer asserts that Fireman’s Fund is dedicated to the program administration market. “We maintain high visibility at trade shows and association meetings and we also have high visibility with Target Markets, the only association dedicated solely to program administrators.” Meyer agrees that some carriers looked askance at program business as recently as two years ago. “That was because A.M. Best looked at program business with a jaundiced eye. Best felt that those involved in program business didn’t have the proper controls in place. But that’s changed, and Best has become more program friendly.” According to Meyer, the first thing a carrier should look at when entering into a program arrangement is the producer’s track record. “We want to know how much experience the producer has in a particular niche market. We want to examine the producer’s existing account base. “We want to know if they have the infrastructure in place to write the business, to quote the business and to issue policies,” he continues. “We do our due diligence when entering into such arrangements. We visit the program administrator’s offices, view their files, and we insist that the first 25 risks be submitted to our offices before handing over the underwriting pen.” Asked about Fireman’s Fund’s relationship with the Target Markets association, Meyer said: “We consider Target Markets the ‘Superbowl’ of associations that have program administrators as their members. The networking opportunities that are presented in terms of meeting with program administrators, other carriers that are in the program business and vendors are extremely important to us.” Lois Massa, vice president of sales for Swiss Re Commercial Insurance, agrees with Meyer about the worth of Target Markets. “We believe that one of the primary roles of the carrier in the program administration relationship with agencies is to provide technical training and education. What better way to fulfill that role than through Target Markets? They have educational sessions at both their mid-year meeting and annual meeting. Seminars are conducted by Target Market members so that carriers can share their expertise by participation in those seminars.” Massa says that in the world of program administration, it is important that both parties—the carrier and the program administrator—be clear on what they expect in the relationship. “Moreover, each party should document what they expect. To be most successful, carriers and program administrators should strive for long-term relationships.” → |
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