What’s driving the program market’s rapid growth in 2022?

In Partnership with

What’s driving rapid growth in the programs market in 2022?

Tight market conditions, increased inflation, and stiff competition are not deterring this sector's expansion

Rhonda Lohmar

QBE North America

Industry experts

Mike Mathews

RPS Signature Programs

Paul Sullivan

Arch Insurance Group

Shawn Woedl

REInsurePro

Rhonda Lohmar is vice president, program manager, at QBE and a member of its North America Programs leadership team. She joined QBE in 2020 and has stepped into successfully managing the relationship with one of its largest partners. Lohmar has a strong eye for continuous improvement and an ability to bring together many groups to develop unique and wide-ranging solutions. Prior to joining QBE, she was vice president and program manager at AXIS Capital for over three years, and before that she held several underwriting leadership roles at MarketScout, CNA Insurance, and Travelers. Her ability to quickly develop and maintain complex relationships, along with her technical expertise in managing risk, makes her well positioned for furthering QBE’s programs growth strategy. Lohmar holds a bachelor’s degree from the University of Colorado – Denver in business administration and management.

QBE North America

Rhonda Lohmar

Mike Mathews is area president for RPS Signature Programs, a division of Risk Placement Services. He is responsible for the development and national distribution of the workers’ compensation program. Mathews led program development and distribution at Arrowhead General Insurance Agency in the workers’ compensation division. He has over 20 years of industry experience with a multi-line underwriting background from Ohio Casualty and Liberty Mutual. Mathews also served as Marsh’s workers’ compensation practice leader for 10 years.

RPS Signature Programs

Mike Mathews

Arch Insurance Group

Paul Sullivan

As CEO and president of REInsurePro, Shawn Woedl is head of the largest program for residential real estate investment properties. He has been the driving force behind the evolution and growth of this unique program through strong and long-lasting relationships with top residential and commercial insurers. With more than 15 years of experience in the commercial and real estate property insurance industry, Woedl has become a recognized expert in the areas of risk management solutions, best practices, and emerging trends. He continues to be at the forefront of the industry, building programs to meet the changing needs of property investors.

REInsurePro

Shawn Woedl

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Tellus in penatibus condimentum malesuada ante vulputate nisi, arcu leo. Amet urna sapien purus vestibulum fermentum a. Cursus metus massa donec sed varius. Nunc enim sit morbi lacus, molestie et nunc. Nullam sed facilisi id malesuada. Ante purus velit, quam scelerisque ultrices scelerisque donec. Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo orci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.

Vault Plus Mortgage and Finance Consultancy

David Merison

“[It’s easy] doing business with these program carriers. It’s easy to set up the program. You’ve got an onboarding template, and it doesn’t take a long time to get the programs up and moving”

Rhonda Lohmar, QBE North AMerica

THINGS are looking rosy for the programs market. The first fiscal quarter of 2022 is in full swing, and market indicators paint a growth picture that reveals a dramatic upswing in the sector. It is estimated that the programs market is growing at a rate three times faster than the standard P&C market, and there are concrete reasons for this rapid increase in business. To help illustrate the story, IB’s Executive Insight series brought together a panel of experts to discuss industry trends. They all agreed on one common thread that has been tied to such accelerated growth in the market: the speed of transactions with program carriers, coupled with the built-in flexibility to pivot to meet industry challenges. “I would say it's the ease of doing business with these program carriers. It's easy to set up the program. You’ve got an onboarding template, and it doesn’t take a long time to get the programs up and moving,” said Rhonda Lohmar, vice president and program manager at QBE North America.

“When there are turbulent times like there’ve been in the past couple of years, we need carriers to respond in a thoughtful, collaborative way that makes for a good partnership”

Paul Sullivan, Arch insurance GRoup

“Right now, probably the two biggest areas are cyber and executive lines. You see incredible increases in rates. The difficulty [is] in trying to underwrite those exposures. There are definitely opportunities in those areas heading into 2022 and beyond”

Mike Mathews, RPS Signature Programs

Multiple solutions With competition stiff in a tight market, the ability to diversify intensifies. The programs market is not oblivious to this insurance reality and has stepped up its ability to work with different partners. “In order to provide those multiple products to your clients, that also give you leverage with the reinsurance community,” Mathews said. “You need a robust internal system to be able to keep those separate products, separate carriers, and then be able to bring that data together to be able to manage multiple programs.” Lohmar agreed that “it’s good to have two or three carriers so that you can spread the risk.”

“If you sum it up in one word, it’s ‘trust.’ When we look for carrier partners to power our programs, we look for companies that have a history in the space and have a solid track record”

Shawn Woedl, ReinsurePro

“We need to be heard,” Sullivan said. “When there are turbulent times like there've been in the past couple of years, we need carriers to respond in a thoughtful, collaborative way that makes for a good partnership." Client concerns are also part of the program puzzle. “There needs to be the trust there. When we deal with our agents and hear from them that they have an issue, [agents need to know] that dealing with you as a program administrator is the same as them [agents] dealing with a carrier," Sullivan said. Woedl couldn’t agree more. “If you sum it up in one word, it’s trust," he said. "When we look for carrier partners to power our programs, we look for companies that have a history in the space and have a solid track record."

“The first thing I thought of was storm perils. You want to work with a carrier that understands modeling very well and that offers enough PML for you to be able to write the business that you are looking at and to be creative in mitigating losses,” Lohmar said. Mother Nature will continue to pose a threat. However, proving an equally daunting contender is the sheer competition that will remain in a tight insurance market well into 2022. “It’s fierce competition. You need to be able to differentiate yourself and continue to try to evolve so that you’re not viewed as a commodity when compared to others,” Mathews said. The flip side When the going gets tough, the tough get going. With roadblocks ahead, turning challenges into opportunities may be the route to take.

Programs market remained robust during the pandemic

Mike Mathews, area president at RPS Signature Programs, added, “The growth in recent years has been supercharged by the fronting carrier model. It’s the model that relies heavily on program administrators because they don’t have the infrastructure to operate an insurance program. “Twenty years ago, State National was the only option in the area, and now you have over 28 fronting carriers that are able to allow programs to thrive in this industry." It's the programs market itself that is moving things forward in the industry, Shawn Woedl, CEO at REInsurePro, pointed out, “with very aggressive pricing oftentimes faster than just a carrier.” The programs market can reliably meet changing industry needs and provide the comprehensive coverage clients are searching for. Speed and overall adaptability become even more paramount in a tight market.

Challenges ahead Despite the growth trajectory, the programs market is not immune to the uphill battle as we climb our way out of a global pandemic. All the panelists agreed that there would be pitfalls in the path northward. “There are some challenges around capacity and around increased demand,” Woedl said. “That portion of the market is still kind of fractured, and [the challenge is] trying to piece those items together to come up with enough capacity to be able to provide for all of your agents that are participating in your program.”

Rapid revenue growth of program business

World events, including a prolonged pandemic, extreme weather events, and carriers pulling back on different lines of business have opened the industry’s door wider to what the programs market can offer. “There is a lot of capital coming in with fronting carriers,” said Paul Sullivan, executive vice president, P&C programs at Arch Insurance. “The easiest way to respond to those quick changes and drastic changes, I think, has been MGAs and program administrators. When there is a pullback in capacity by traditional carriers, as we have seen, that needs to be filled quickly.”

Meeting program needs This begs the question of just what program managers are looking to gain from their carrier partners. “I think they are looking for carriers that have been in this space for a long time and have a track record of success and solid financials,” Lohmar said. Experience in niche markets also tops the list of carrier traits that program administrators are searching for. Of equal importance is the carrier’s ability to listen carefully to the specific needs and concerns of the program administrators.

Read on

Sullivan holds similar views, predicting that “things are going to change very fast. It's not going to be a slow-moving year.” “The biggest challenge will be inflation, because it is going to hit all aspects,” he added. Don't count out extreme weather events either: these continue to strain the working models of insurance providers throughout the industry.

Beyond the technological impact, Sullivan added, there is “a ton of dislocation, a ton of challenges, and therefore opportunities are all over the place.” “Trust your decisions and your data and your information. All of those areas have an immense opportunity that we would not have if everybody was just cruising along."

Arch Insurance North America is part of a global insurer offering superior coverage and service. We participate in specialty lines where the talent and knowledge of our employees are a competitive differentiator. We serve North America from offices in the United States and Canada, providing superb coverage and claims handling through careful and diligent underwriting of risks and business-friendly solutions. With 20 years of operating history and strong financial ratings, our track record remains solid.

Find out more

QBE North America is a global insurance leader focused on helping customers solve unique risks so they can focus on what matters most. We offer a broad spectrum of personal, specialty, commercial, program and crop insurance capabilities. Customers can rest assured they are getting specialized advice from a trusted partner underpinned by risk mitigation, exceptional claims and caring service. QBE provides customers the confidence they need to achieve their ambitions at home, and around the world.

Find out more

REInsurePro is a national program manager with expertise in building specialty programs for niche property risks. Our flagship program for real estate investment properties is the largest and most comprehensive in the country. The program accommodates for tenant-occupied, renovation, new construction, and vacant properties up to 20 units per location with no limit on portfolio size. Our monthly reporting form provides flexibility for investors with all of their locations on one schedule, and simplified billing for agents. REInsurePro is now appointing agents across the country with the ability to quote, bind, and service through our innovative online platform.

Find out more

In Partnership with

Read on

Industry experts

In Partnership with

Read on

Trevor Baldwin

Baldwin Risk Partners

Industry experts

Paul Sullivan is executive vice president of Arch Insurance Group's P&C programs division. He is responsible for all profit and loss results, underwriting strategy development and execution, and program staff. Prior to joining Arch in 2009, he was vice president of Hartford Insurance Group’s financial products division. Sullivan began his insurance career in 1991 at Aetna Casualty and Surety Company. In 1996, he moved to Chubb & Son, where he worked until 2004 in various management liability underwriting and leadership capacities. Sullivan holds a BA in economics from St. John Fisher College in Rochester, NY, and an MBA from Rochester Institute of Technology.

“I think that right now probably the two biggest areas are cyber and executive lines. You see incredible increases in rates. The difficulty [is] in trying to underwrite those exposures. There are definitely opportunities in those areas heading into 2022 and beyond,” Mathews said. Data analytics and technological innovation are other areas that could present an opportunity for the program market. “Our partners are looking to us for product innovations and expertise in areas like data analytics,” Lohmar said.

RPS Signature Programs manages a variety of specialized programs on behalf of highly rated carriers, offering proprietary insurance solutions in niche markets. Headquartered in Rolling Meadows, Illinois, RPS Signature Programs is a division of Risk Placement Services, one of the nation’s largest specialty insurance product distributors. Fueled by a culture of creativity, innovation and teamwork, RPS continues to add top-tier talent to its roster of insurance specialists and growth through new merger partners, all with one central focus – providing insurance expertise and speed of service to its clients. To agents and brokers looking to cover what’s unique, what’s new and what’s next, RPS is your partner in whatever’s possible.

Find out more

Source: Target Markets Program Administrators Association State of Program Business Study

2010

billion

$17.5

billion

$40.5

billion

$53.8

2018

2020

207%

Growth trajectory since 2010

Source: Target Markets Program Administrators Association State of Program Business Study

Hover to see more

Percentage of program administrators that lost a substantial number of customers

Percentage of program administrators that lost a moderate number of customers

Percentage of program administrators that lost a small number of customers

Percentage of program administrators that retained customers

Percentage of program administrators that saw improved retention levels

Percentage of program administrators that lost a substantial number of customers

SPECIALTY

BEST INSURANCE

RESOURCES

RISK MANAGEMENT

NEWS

Key Media

Insurance Business Australia

Insurance Business Canada

Wealth Professional Canada

People

Terms & conditions

Conditions of use

About us

RSS

Asia

specialty

Best Insurance

Resources

RISK MANAGEMENT

News

People

Terms & conditions

Conditions of use

About us

RSS

Asia

specialty

Best Insurance

Resources

RISK MANAGEMENT

News

People

Terms & conditions

Conditions of use

About us

RSS

Asia