Page 30 - 2016 State of the Market from AmWINS

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INDUSTRIES
PROGRAMS
Speed, efficiency, and customer service
essential to competing for program business
To get a sense of just how competitive
program business has become, look
no further than the 2016 meeting of
the American Association of Managing
General Agents (AAMGA).
More than 300 people attended the first-
ever program business session at the
annual meeting, reflecting both an appetite
and market for program business that has
grown significantly in recent years.
“There is a huge interest on the part of our
carriers in doing program business,” says
Ben Sloop, president of AmWINS Access,
the small business division of AmWINS
Group, Inc. “Ten years ago, perhaps a
dozen carriers had dedicated program
departments; today, there are more than
50. The broader scale and advanced
analytics provided by larger MGAs and
program administrators has led more
and more carriers to build programs in
areas traditionally dominated by broad-
based binding authorities, such as small
business and mono-line catastrophe-
exposed property.”
Capacity in the program sector is coming
from many sources. “There has been
increased competition from traditional
program carriers and alternative capital,
as well as ferocious competition from
reinsurers,” says Ben Francavilla,
president of AmWINS Program
Underwriters.
“We’ve also seen London’s casualty
appetite increase over the past 12
months,” adds Andrew Brown, president
of AmWINS Transportation Underwriters.
Program business is feeling the pressure
from the open market as underwriters,
hungry to produce revenue in a soft
market, try to lure individual accounts
from programs.
“In particular, we’ve seen open market
underwriters writing traditionally prohibited chance,” says Sloop. “Because AmWINS
classes – woodworking, waste haulers,
pizza delivery. We are definitely feeling
that pressure from a pricing perspective,”
says Francavilla.
On the other hand, a pullback from
open market underwriters on some
lines of business has created additional
opportunity for program managers.
“Losses on some lines of business, such
as auto and workers’ compensation, have
led some traditional carriers to cut back
or even pull out of the space, resulting
in more opportunity for growth,” says
Brown. “We’ve been able to build out
our capabilities in program business for
trucking as well as professional employer
organizations and staffing, which are
always difficult classes.”
Buyers can also expect program
underwriters to be increasingly creative
on coverages. Although details differ by
class of business, coverages can often be
found that aren’t available on an individual
account basis. “The key to a successful
program is the ability to offer specialized
coverages,” says Francavilla.
For many agents and brokers, identifying
a new niche to target with a program
offering is often easier said than done.
“A smaller retail shop may have a hard
time finding a carrier willing to take a
has established successful relationships
with program carriers, there is more of
a willingness on their part to do startup
programs with us.”
Keys to building a successful program are
having the underwriting expertise specific
to the targeted niche, the scale to be able
to build premium volume, and the data
and technology to support that platform.
“Carriers look for underwriting talent,
best-in-class technology, and superior
distribution,” says Brown. “Retail agents
and brokers look for speed and efficiency,
because it really is a customer service-
driven line. We believe in servicing
retailers quickly and giving meaningful
premium volume to carriers while having
the underwriting expertise to create a
profitable program.”