With $30.1 billion in program business premium revenues in 2013—a 9.8% increase over $27.4 billion in 2012—the financial performance of this commercial insurance market segment continues to outpace the overall property-casualty marketplace, according to the Target Markets Program Administrators Association (TMPAA)'s annual “State of Program Business Study,” released Oct. 20 at TMPAA's 14th Annual Summit in Scottsdale, Ariz.

More than 60% of the 285 TMPAA program administer members responded to the survey, which focused on the size, growth and profitability of the program business marketplace, as well as underwriter compensation and social media marketing strategies.

Among the key findings:

Program business is growing more quickly than the overall commercial insurance marketplace—increasing 9.8% in 2013, compared with a 4.6% increase in direct premiums for overall commercial lines.
Hiring and retaining qualified personnel continues to be a major challenge in the program space. Administrators are boosting their training programs to better support the needs of both new and experienced underwriters.
Administrators do not see social media as an effective marketing tool. LinkedIn and Facebook are the most commonly used social media services.
A comparison of 2014 to 2013 responses shows an average of 3.1% growth in the number of programs.

TMPAA defines “program business” as insurance products targeted to a particular niche market or class with similar risks that are placed with one carrier. Administration is done through program specialists with an expertise in that market. They typically target niches through differentiation in product, risk management services, delivery mechanism or price, and distribute these programs on retail, wholesale or direct basis.

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