In our world of specialized or segmented skills and markets, many independent agencies are thriving by serving distinct, homogeneous classes of insureds. In time, many of these areas of concentrations evolve into formal, carrier-underwritten insurance programs.
There are many paths to program status. However, in general, strong candidates for elevating a book of business to program status will have a proven loss history and agency expertise in that class of business, along with competitive market intelligence and an established distribution system.
Increasingly, elevating such coverage niche or special expertise to program status is proving an excellent way to generate premium growth and enhanced profitability, including through equity participation in the program. Also, it may, depending on the specific program and class of insureds, help buffer against customary cycles in insurance markets.
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