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$17.5B program administration market has 1,750 programs: Study

$17.5B program administration market has 1,750 programs: Study

The $17.5 billion program administration market has an estimated 1,750 individual programs, according to a study by the Wilmington, Del.-based Target Markets Program Administrators Assn.

The average program administrator administers about three programs, has $20 million in written premiums and employs about 16 individuals, according to the survey of 92 program administrators and 34 insurers, which was conducted between June 14 and Aug. 3 and released Saturday. Research for the study, which was sponsored by Bermuda-based Argo Ltd., was conducted by New York-based Advisen Ltd.

While there are 750 administration firms, larger firms that administered more than $50 million in premiums account for more than half of the premiums written, according to the survey. Program administrators reported their agencies had program relationships with 57 insurers; the five most frequently mentioned were Lexington Chartis Programs, ACE Ltd., QBE Insurance Corp., AmTrust Underwriters Inc. and Munich Reinsurance America Inc.

The survey also found that while some insurers insure more than 50 programs, 65% insure less than 20 programs. In terms of insurance coverage, the five largest areas are package, 26%; professional liability, 17%; all lines, 10%; casualty, 9%; and workers compensation, 9%. In terms of industries, the largest concentration of programs was in professional services at 10%.

Copies of the report, “The State of Program Business 2011," can be obtained here.