While there’s no silver bullet when it comes to complex, specialty insurance placement, the skills of a Program Administrator come close. Program Administrators leverage their market expertise and industry credibility to guide their agency partners and clients through an insurance landscape fraught with rate increases, capacity restrictions, and underwriting challenges. The value they provide is quite clear, considering program administration brought in roughly $53.8 Billion in premiums in 2020.
Why work with a Program Administrator? Here are six reasons an independent agent should partner with a Program Administrator when working with clients in niche markets who need more than a run-of-the-mill insurance product.
Top Reasons to Work with a Program Administrator
- You’re tapping into a wealth of specialized expertise. Typically, retail insurance agents and brokers work across a broad range of clients, selling everything from homeowners insurance and auto coverage to basic general liability. Their strength lies in their ability to sell coverage across a broad range of clients and industries. However, there are situations where a client comes to the agent with a unique set of needs that are outside the agent’s scope of expertise — for example, a cannabis farmer needing commercial auto insurance or a self-storage facility seeking cyber coverage. In these types of circumstances, there is no “out-of-the-box” solution. This is where a Program Administrator steps in.
Program Administrators focus on a single, niche market. This day-to-day experience gives them an invaluable understanding of the market, its unique exposures, and how to customize an insurance program to fit a client’s individual needs. Because they’re so focused on one target market, Program Administrators stay at the forefront of what’s happening in the space and they’re often the first to know about shifting market conditions, major industry advancements or challenges, changes to local or state regulations — and how all those things might impact their clients’ insurance needs or coverage.
- Program Administrators provide carrier access. Program Administrators work to carefully cultivate relationships with quality carriers they know have the appetite and financial means to support their target market. Because Program Administrators have such deep expertise in their target market, carriers trust the business Program Administrators bring them. Carriers know a good Program Administrator is often the first to pick up on emerging risk exposures and other relevant industry trends that can impact a carrier’s profitability.
These carrier relationships are highly beneficial for a retail agent and their client. Program Administrators can open doors to carriers that an independent agent simply wouldn’t have access to otherwise — particularly in hard market conditions or when trying to place an especially tricky risk.
- Program Administrators have underwriting authority. Because carriers trust the expertise of the Program Administrators they choose to work with, they grant them authority to actually underwrite their programs and product lines. Often Program Administrators have in-house teams that can do everything from issue quotes, bind and service policies, and handle claims. This relieves some of the administrative burden from the carriers, who benefit greatly from how well the Program Administrators know the space and its associated risks. But it also works in favor of the retail agent and their client, as well, by expediting the process and ensuring the coverage proposal sufficiently addresses their needs.
- Program Administrators offer innovative insurance solutions. Program Administrators know their target market inside and out, which means they know how to address the broad range of unique risks their clients face — and they build custom solutions accordingly. Sometimes this means leveraging carrier relationships. For instance, a Program Administrator can be an agent’s strongest asset at the negotiating table with a carrier as they’re discussing coverage, terms, limits, and deductibles for an insured.
Program Administrators also offer assistance for difficult-to-place risks. In some situations, carriers aren’t willing to extend business to an individual insured they consider risky, or they simply choose to pull back capacity across the board for a particular type of risk in a hard market environment. In these cases, Program Administers are a resource for exploring options outside the admitted market by tapping into E&S Lines.
- Your clients will benefit from risk management and loss prevention expertise. Many Program Administrators offer risk management and loss prevention guidance, alongside their other services. Because Program Administrators have such an extensive background within their market they have literally “seen it all.” They know the common risks that historically plague their clients and the emerging challenges that are on the horizon. This puts them in the position to offer guidance and resources for how insureds can mitigate their exposures and improve their overall risk profile — which can potentially allow agents to negotiate better terms for their clients.
- You and your client will enjoy personalized customer service. A Program Administrator’s success hinges on their ability to build deep, lasting relationships — with both their carrier and retail agent partners. They very intentionally engage with their clients, insurance carriers, and other industry stakeholders to foster ongoing communication and collaboration. For you and your clients, this may look like passing along marketing brochures, forwarding helpful industry reports, offering risk management tips, or sharing news about upcoming industry events, and more.
Conversely, the better a Program Administrator understands the needs and challenges across their client base, the better they can partner with their carriers, offering them new program ideas to better meet the needs of insureds.
MiniCo was founded in 1974 with the singular focus to create specialty insurance solutions, and we are proud to be one of the top Program Administrators in the nation. For two years in a row, we’ve been voted a 5-Star Program Administrator by Insurance Business America, in recognition of our commitment to our agents, insureds, and carriers. Reach out today to speak to one of our specialists and put our expertise to work for you and your clients.