While the number of program carriers expanded to at least four dozen in 2008, executives of program divisions say there’s no shortage of program prospects coming their way to match the list of insurance suppliers.
“We’re not going to suffer a lack of opportunity,” said Scott Reynolds, president of United National Group in Charlotte, N.C., one of 48 carriers listed among current carrier members of the Wilmington, Del.-based Target Markets Program Administrators Association.
“I have already seen a lot of submissions. We’ve already gone far enough through the process on several to say no, and we’re looking at several of the others,” noted Mr. Reynolds, who spoke to National Underwriter just six weeks after joining United National from AmWINS Group.
“We will have opportunity,” added the program specialist, who served most recently as president of the specialty underwriting division of AmWINS before taking the position at United National in July, and as chief actuary at AmWINS for four years before that. “We’ll need to see a lot of opportunities, since the success ratio of new program submissions is typically low.”
The reasons carriers give for declining specific opportunities provide insights into broader questions of risk appetite and program requirements, while revealing their capabilities to support particular types of business.
“I don’t really even use the word ‘decline’ anymore,” said Rocco Malandrino, senior program underwriter of Markel Shand in Deerfield, Ill., after he and Henry Lopez, vice president of the program division, presented a number of examples describing how they worked with program managers to find necessary data to get comfortable with programs, or to redefine program boundaries to bring opportunities up to the insurer’s required profit levels.
Mr. Malandrino said the only programs that have failed to make the cut at the eight-month-old division targeting professional liability were not “glued together enough.”
He explained, for example, that in some situations, program managers involved did not have the complete endorsement of a professional association or group. Upon realizing that the desired penetration wasn’t there, program managers decided not to move forward, prompting Shand to offer different solutions—insuring individual risks on a brokerage basis or providing a master certificate, Mr. Malandrino said.
At American Safety Insurance in Atlanta, Ga., Brad Isaacson, vice president of program business, said his division looks at over 100 deals per year, but typically signs on to just four or five.