Most program business insurers believe gross premium volume fortheir segment totals at least $20 billion, but a growing subset nowhas doubts that they are actually writing that much as a group, asurvey reported.

Those findings were included in Guy Carpenter's fifth-annualsurvey of domestic insurance carriers writing specialty programbusiness through managing general agents and other programadministrators.

Seventy-six percent of respondents peg the current MGA/PA marketsize at $20 billion in gross premiums or higher, according to theGuy Carpenter report.

While the figure represented more than three-quarters of theissuing carriers responding to the survey, it was a considerabledrop from the 92 percent who said the market was at least $20billion in the prior survey published in May 2008.

The latest survey, published earlier this month, shows that 24percent of respondents believe the market is less than $20 billion,compared to only 8 percent in 2008.

At the top end of the scale, roughly 20 percent of respondentscontinue to believe that the market is $40 billion or higher–afigure that is consistent with the prior survey in 2008.

Between the two extremes, 29 percent of those responding to thesurvey this year said the market is somewhere between $30 billionand $40 billion, while 38 percent placed the figure in the samerange in 2008.

Roughly 27 percent said the market size is $20-to-$30 billion ingross premiums in this year's survey, compared to 33 percent in2008.

This year's survey also revealed that fewer program carriersbelieve they are part of a growing market than they did in recentyears past. Only 37 percent are forecasting market growth.

The figure hasn't been that low since Guy Carpenter's May 2005survey, when only 38 percent saw growth ahead for the MGA/PAprogram market.

In the September 2006 survey, the figure leapt to 65 percent,and in the most recent prior survey–published in May 2008–56percent of carriers surveyed had predicted a growing market.

In this year's survey, the most common response was that themarket would remain flat, with 46 percent believing this to be thecase, while 17 percent foresee market shrinkage.

According to the report, the complexion of respondents haschanged this year, with traditional multiline now outnumberingspecialty carriers. In the past, the two types of carriers weresplit 50-50 among total survey participants, but this time around,63 percent are multilines, and only 34 percent are specialtyinsurers.

Responses to many other survey questions–about challenges facingthe market, targeted program sizes and business lines, and requiredMGA/PA services–were generally consistent with prior surveys.

One notable exception involved the compensation of reinsuranceintermediaries for bringing new opportunities to carriers.

Last year, 100 percent of the respondents said they wouldcompensate intermediaries–either by paying a finder's fee orincreasing MGA commissions to include a provision for theintermediary.

This year, 18 percent said they would do neither, the GuyCarpenter report noted.

Asked to list their top five challenges, carriers highlightedmany of the same concerns as they did last year, with new businessproduction remaining the No. 1 challenge (selected by 66 percent ofrespondents), followed closely by the challenge to maintain currentrate levels (61 percent) and the challenge to maintain or increasepremium (58 percent).

Roughly 40 percent listed the entrance of new market competitorsamong their top-five challenges, up from about 30 percent in theMay 2008 survey.

The report also gives information about carrier access toadmitted paper, carrier interest in industry meeting andconferences, and carrier perceptions about profitability.

Both the latest report and the 2008 report reveal that 92percent of carriers put the overall program business segmentcombined ratio in the 90-to-100 range, but most now expect theresult to be at the higher end of the range.

While the 2008 report had 68 percent of survey respondentspegging the combined ratio in the 90-to-95 range, only 49 percentbelieve those low-end figures are possible for 2009.

The full report and blog entries summarizing sections of thereport are available on Guy Carpenter's intellectual capital Website, www.GCCapitalIdeas.com.