The program administration market has experienced an amazing growth trajectory in the past decade, increasing by 131% between 2010 and 2018. According to the most recent data from Target Markets Program Administrators Association (TMPAA), program administration business today represents $40.5 billion in annual premium in the property/casualty (P/C) industry with more than 1,000 program administrators in the market. We spoke with Chris Leisz, president, RPS Programs, about the health and vitality of program business and its continued innovation and relevance in the insurance industry.
“The program administration market is comprised of a pool of thought leaders who are passionate about building programs and delivering new solutions to clients,” says Leisz.
“We have deep industry expertise with a focus and commitment on meeting the needs of the industries we support. This passion and knowledge are behind the success of program business, which is evidenced by the fact its growth has outpaced the P&C industry program administration supports.”
Building a Successful Model
The program administration market model mirrors the global economy’s move toward specialization. “We are not generalists by trade,” reinforces Leisz. “Each office has staff members with specialized expertise in their respective industry vertical anywhere from 20 to 30 years. We provide a proprietary product with tailored underwriting for the industries we support as well as customized business processes to optimize and facilitate the buying cycle and our agents’ sales and marketing approach in the programs we are offering.”
The success of RPS’ program business model is also due to its commitment to work with a finite number of markets for any particular industry.
“Our insurer partners’ profitability is important to us, it’s not about growth for growth’s sake,” says Leisz. “We want to ensure they remain committed to our programs. We look for profitable growth and partner with the right carriers to accomplish this.”
Carriers Find Specialists in Program Administrators
Leisz explained that insurers over the years began to look at their fixed vs variable costs solutions in determining how best to deploy their capital expanding their footprint and profitably grow their business.
“Program administrators bring deep expertise to build and manage programs, enabling insurers to grow with variable cost solutions rather than having to employ in-house underwriters and marketers to support their industry growth plans,” he says. “Carriers will continue to look to partner with specialists in order to continue to grow their books of business without having to spend the financial resources to put together distribution, underwriting, policy servicing, IT and marketing teams.”
Most recently, RPS launched two new proprietary programs. Its Attorney Shield program with a top rated LPL carrier provides an online Lawyers Professional Liability solution designed for a solo practitioner and law practices with two or three attorneys. “We delivered a tailored solution with a truncated application process and enhanced user experience that is easy for agents to deploy for the solo practitioner and smaller firms,” explains Leisz.
RPS also launched a brand-new public entity program with a top-rated carrier to offer a first-dollar, low-deductible insurance product for public entities and special districts.
“In creating the program we leveraged our strong relationship with the carrier and brought expertise to implement a distribution strategy and a technology strategy which involved building the underwriting and rating guidelines platform,” Leisz says.
Program Administration & COVID-19
Leisz emphasizes that the specialist model used in program business delivers results and will continue to do so post-COVID-19.
“The underpinning of the model made sense pre-COVID-19 and may make even more sense post-coronavirus. As carriers continue to adopt their next normal, they will be partnering even more with specialists to continue to round out their overall portfolio and address customer concerns.
“RPS is poised to incubate new solutions post-COVID-19 either using our brokerage, binding or program administration capabilities. We can help our carriers create and navigate solutions that are customer-focused.
“In fact, the program administration space can come up with solutions quicker than other areas because we are able to commit both the talent and processes to the challenges we face. Within RPS, for example, we’ll look at the current marketplace, what our clients are facing and how we can offer them appropriate solutions. The program market will be one of the champions coming out of COVID.”
The hallmark of the program administration market is the talent and passion of the individuals working in the space to deliver robust, nimble solutions. RPS Programs is dedicated to continuing to look for and foster business opportunities in program administration business for our agency partners and carriers.