NU Online News Service, May 4, 11:00 a.m.EDT--The specialty program market appears primed forexpansion as carriers more aggressively seek new business,according to results of a survey by Guy Carpenter & CompanyInc.

In its inaugural survey of domestic insurers that write asignificant amount of program business through programadministrators, Guy Carpenter found that the market appears readyfor expansion, provided that current rates can be maintained andthat program information is sufficient and reliable.

The survey, said Carl Bach, vice president of Guy Carpenter'sProgram Manager Solutions Specialty Practice, can be used toprovide "valuable insight" into the expectations and requirementsspecialty program carriers have for their programadministrators.

"It is our hope that by understanding these needs, participantsin the specialty program marketplace will be able to work that muchmore efficiently and effectively," Mr. Bach said.

Additionally, the response to the survey showed increasedactivities and opportunities for specialty program carriers,including the emergence of new markets, new program administratorsand new products. The survey also showed an increase in merger andacquisition activity and in the number and variety of third-partyservice providers, as well as a rise in the use of alternative riskmechanisms.

Those responding to the survey estimated they will write between70 and 80 new programs during 2005, with 38 percent of specialtyprogram markets increasing this year. Specialty program carriersindicated little preference between different types of programs interms of geography. Both national and single-state programs werepreferred by 30 percent of respondents to the survey, and 40percent preferred regional programs. Additionally, the surveyshowed these preferences to be driven more by underwritingdecisions than licensing issues.

Respondents were also divided on how, and more specificallywhere, claims should be handled. The use of third-party claimsadministrators is a requirement for 40 percent of those carriersresponding to the survey, while 35 percent said that they prefer tokeep claims administration in-house. An additional 25 percent ofrespondents said they require the use of an in-house claimsdepartment.