WHAT a difference a couple of years make. In 2003, as premiums rose in the hard market, program administrators had it made–if they had access to insurers. The problem was that many didn't. Carriers fled the program business market or, in several well-publicized cases, were forced into bankruptcy by bad underwriting results. Given the dearth of markets, program managers were left scrambling to find homes even for programs that were proven profit-makers. Startup programs, meanwhile, were all but outlawed by most insurance companies.
Today insurers have turned the spigot back on. Carriers are wooing program administrators as they haven't since the late 1990s. Insurers are willing to broaden coverage, and a program administrator with a proven track record and a new idea for a program can find a receptive audience for it.
But while the challenge of finding a market has largely evaporated, others have taken its place. Program administrators face increasing costs for such expenses as marketing and IT support. In some lines, premiums are under growing pressure. Even the Spitzer investigation could become a concern.
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