The program insurance market is experiencing rapid growth, but signs suggest it may be entering a more uncertain phase. Rates are beginning to decline, while the pressure from litigation is increasing, making risks harder to predict. Despite ongoing investment and innovation, there is a growing concern about the sustainability of this expansion.
At the 2025 Target Market Program Administrators Association (TMPAA) Mid-Year Meeting held in Dallas, industry leaders gathered to discuss these changes and share insights on the market’s future. Chris Pesce, president of One80 Programs, noted the robust attendance at the conference, emphasizing the increasing number of program administrators and carriers. He pointed out that the program segment is continuing to outpace the growth of non-program commercial insurance.
However, this growth comes with challenges. Many executives are preparing for a potential market shift. Pesce highlighted that rates are starting to go negative, particularly in property insurance, while Lloyd’s of London still has capacity that it has not yet utilized this year. The situation varies across different segments; while property insurance is softening, liability insurance remains tight due to ongoing litigation issues. Pesce described the litigation environment as "out of control," with larger settlements becoming common.
Patrick Charles, head of P&C North America at SiriusPoint, brought attention to the ongoing struggles in the auto insurance market. He pointed out that the Managing General Agent (MGA) sector is not exempt from challenges, facing issues like rising loss trends and the impact of California wildfires.
Despite these pressures, the industry remains eager for innovation. Executives noted that program structures are becoming more flexible, and hybrid fronting models are emerging as essential for resilience. Jennifer Burnham from Great American Alternative Markets emphasized that the program market is a hub of innovation, adapting quickly when traditional markets cannot keep pace.
Data management is becoming increasingly important for the future of the industry. Julie Gibbs from Allianz Commercial stated that the ability of MGAs and carriers to manage their data effectively will be crucial for underwriting and assessing risks in real time. She emphasized the need for rapid evolution in data sharing and management practices.
As the industry continues to grow, there are concerns about the availability of talent. Many attendees at the conference expressed worries about the potential talent gap as baby boomers retire. Burnham noted that while there are efforts to attract new talent through internship programs and outreach, more needs to be done. Experienced professionals are shifting from traditional carriers to MGA startups, creating a dynamic workforce shift.
Charles cautioned that the rapid formation of new MGAs could signal potential risks. He stressed that these new ventures need more than just a good idea; they require a solid support system to thrive.
The geography of risk is also changing. What were once considered fringe exposures, like wildfires in the Pacific Northwest or hurricanes moving northward, are now central to underwriting discussions. Burnham remarked that the industry must adapt to this new risk landscape and anticipate future challenges rather than relying on past experiences.
Despite the signs of a softening market and increasing claims volatility, there is still a sense of excitement in the program space. Carriers are engaged, capital is flowing, and innovation is alive. However, success in this evolving landscape will depend on readiness and the ability to adapt. Gibbs concluded that those who specialize, remain agile, and invest in data will lead the way in the future.