A Guy Carpenter survey says specialty-lines carriers believe maintaining rate levels and new business production pose the biggest challenges for the insurers over the next year.
In its Eighth Annual Specialty Insurance Program Issuing Carrier Survey 2012, 62 percent of respondents say maintaining rate levels pose the biggest challenge. That is slightly higher than 57 percent in 2011, but behind the high of 71 percent in 2010. New business production was a concern of 44 percent of respondents, up slightly from 41 percent in 2011.
From 2006 to 2012, the only time maintaining rate levels did not dominate the question was in
2006 and 2008. In 2006, the first year the question appears, the results were close to even. But in 2008, 77 percent of respondents say new business production was their major concern and 58 percent say it was maintaining rates.
Professional submissions—such as updated loss information, premium data and financial
information on the Program Administrator and Managing General Agency market—were the third largest concern at 38 percent.
Other concerns were:
• Maintaining volume—32 percent.
• Systems—29 percent.
• Program Administrator Relationships 29 percent.
• New competitors—15 percent.
• Commission levels—6 percent
This year’s online survey received responses from 34 company representatives asked to choose three of the biggest challenges their corporation face writing programs over the course of the next 12 months.
Gauging the size of the markets, 54 percent say the gross written premium of the PA/MGA business stands at $20-$30 billion, and 15 percent went higher to $30-$40 billion. Only 12 percent put the figure at more than $50 billion.
On the question of growth, 56 percent of carriers say they are not seeking acquisitions, a major shift from 2010 when 72 percent of respondents say they were interested in making acquisitions. Of those seeking to make acquisitions, 38 percent wanted to acquire an MGA or Managing General Underwriter and 35 percent were interested in teams of people.
Managing Director of Specialty Programs at Guy Carpenter, Bill Harris, says the survey reflects a thriving market reflecting “a positive outlook for the year ahead.”
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