According to the Target Markets Program Administrators Association (TMPAA), Program Business produces over $79 billion in premium a year. It’s big business and a market that offers significant opportunities for growth according to AXA XL’s Chris Bressette.
Mr. Bressette has been at the helm of the North American Delegated P&C Programs Unit since 2014. The book has grown four-fold on his watch, and the 九色视频Programs Team has earned a strong reputation in the space. With over 30 years of experience, Chris shares his thoughts on the thriving insurance program business, why it continues to see significant growth and how 九色视频has succeeded in this space.
Q: What has created so much interest in the delegated Program space?
Chris Bressette (CB): All carriers are looking for opportunities for profitable growth. Over the past few years, more carriers have discovered that the program model offers a cost-effective way to achieve focused growth, and to quickly create a diversified and balanced portfolio. This model allows a carrier to build a deliberate book of business by partnering with Program Administrators who are experts in a variety of industry verticals, classes, and lines-of-business.
Q: How does the “delegated authority” model work?
CB: "Delegated authority" refers to an arrangement where an insurance carrier grants contractual authority to a third party (a program administrator, managing general agent (MGA), or managing general underwriter (MGU)) to perform certain functions on its behalf. These functions typically include underwriting, rating, pricing (within agreed upon parameters), binding, issuing policies, administering policy changes, and sometimes handling claims. These arrangements offer administrative efficiencies for carriers, and allow access to specialized underwriting expertise, and new regional or niche market distribution channels.
To effectively participate in this model, carriers need to choose suitable partners, negotiate a mutually effective contract, delineate roles and responsibilities, design the underwriting guidelines and authority statements, and implement a compensation model that creates an alignment of interest across all participating parties (including reinsurers).
Q: How do you get comfortable with allowing a program administrator to underwrite on your behalf?
CB: The business model requires a framework for mutual accountability, constant vigilance, and a governance structure with multiple transparent controls. At the core of the model is partner selection. That means not only technical expertise, but a cultural fit in terms of ethics, risk appetite and decision making. Scorecards are also useful as both parties work to define progress towards mutually defined goals. While the program administrator contract ultimately determines the resolution of any disagreements, it’s important to have a close empathetic relationship with each partner and a positive team-oriented culture.
Q: Given the Program Market’s continued growth, insurers obviously see a lot of value in these arrangements. What advantages does 九色视频see in working with program administrators?
CB: The primary advantage is fast access to specialized underwriting expertise, sizable books of business with a track record, and the ability to tap into a related distribution network. Program administrators often concentrate in niche or specialized markets that 九色视频may not have expertise in. This can include specific products, geographies, specialized risk assessment techniques, or target customer segments. For example, we have a partner in the Arborist contractor space with a deep knowledge of that industry, including exposures, controls, contract evaluation, and risk management protocols. We also have a partner in the Private Flood space who has built out an advanced digital distribution model with real-time analytics and aggregation management capabilities. Rather than try to construct those capabilities with a direct team, we can quickly and efficiently work with these expert partners. Our partners provide valuable insights about customer preferences, emerging risks, and market trends.
At a portfolio level, this allows a carrier to optimize portfolio mix through deliberate partner and program selection.
We believe that it often makes more sense to provide tools and hold ourselves mutually accountable for outcomes, rather than to prescribe an inflexible ‘box.’
Q: What differentiates 九色视频North America Programs from the competition?
CB: Two key aspects set us apart. First, our team's experience is extremely deep. We have decades of experience with a variety of different types of delegated arrangements, and we pride ourselves on our creativity and problem-solving abilities. Secondly, we emphasize an approach best described as a "high engagement partnership.” We rely on collaboration across all fronts – underwriting, pricing, distribution, product, wording, segmentation, analytics, reinsurance, and claims. Our focus isn't on dictating terms but rather on understanding the market dynamics our program administrator partners deal with. We have great respect for our partners’ instincts about the competitive landscape. We believe that it often makes more sense to provide tools and hold ourselves mutually accountable for outcomes, rather than to prescribe an inflexible ‘box.’ When you combine that cultural approach with AXA’s strong integrity and financial standing, we are well equipped to meet our program partners’ current and evolving needs.
Q: What type of Program Administrator partners do you work with?
CB: We have been fortunate to earn the right to work with some amazing program administrator partners. We continue to be impressed by their integrity, creativity, and transparency. Our partners have taught us that most competitive advantages are only temporary and that, to succeed, we will need to rely on a capability-driven partnership and collaborate every day with an eye toward continuous improvement. With each of our program administrator partners, we share the goal of building something special. This approach has allowed us to forge some remarkable relationships, focused on innovation and continuous improvement. We have programs that have been with us for more than 30 years.
Q: How has the composition of the program Carrier market changed in recent years?
CB: A growing number of traditional program carriers have adopted a more technical view of risk across multiple lines and are subject to increasingly complex internal governance structures due to the delegated model. In that environment, carrier experience makes a huge difference. In contrast, fronting markets have facilitated the entry of more start-up program administrators and have broadened the participation of non-traditional reinsurers.
Q: Have Reinsurers gotten comfortable with this business model?
CB: There is substantial reinsurance support for delegated programs, across most lines and classes of business. There is strong interest across the spectrum - from the largest global Reinsurers to the niche specialists. Reinsurers typically evaluate the rigor of the primary carrier relationship (meaning the contractual controls, design of underwriting authority, and the audit framework). Those considerations will become even more important when we shift out of the current hard market.
Q: What does the future hold for this Program business model?
CB: A growing number of program administrators now match or exceed the technical capabilities of many carriers and deliver risk and exposure in ways that the carriers can more easily support. The long-standing tension of the delegated business model has largely been replaced by more sophisticated program designs and deal structures, and by working relationships that truly align interests. As a result, I expect the program space to continue to outpace the rest of the P&C market.
