Growth Momentum Continues for Program Business: TMPAA
Program business is growing at a rate that outpaces the broader commercial insurance market.
Between 2010 and 2020, the program business sector grew from $17.5 billion in commercial insurance revenue to $53.8 billion. In 2024, premium volume climbed to $110.8 billion, up from $79 billion (40%) in 2022.
Growth in direct premiums earned for commercial P/C lines rose by only 21.3% over the same period.
Between 2022 and 2024, average administrator revenue rose by 49%, climbing from $13.8 million to $20.6 million. After two consecutive declines from 58% in 2018 to 45% in 2020, and then 39% in 2022, the percentage of administrators utilizing a Lloyd’s syndicate rose to 53% in 2024.
Despite ongoing consolidation within the program space, the estimated number of U.S. program administrators increased to 1,150 in 2024, driven by the continuous entry of new participants into the market.
A recent industry survey from the Target Markets Program Administrators Association (TMPAA) found that nearly half of the respondents reported profit margins above 26%. In 2022, 22% reported profit margins over 36%, and that number rose to 37% reporting profit margins exceeding 36% in 2024.
In 2024, 83% of administrators and 88% of carriers reported premium growth. Over half of administrators launched one to three new programs in the past two years, and 42% plan to launch two to three more in the next 24 months. At the same time, 84% of carriers exited at least one program, primarily due to poor performance. Nonadmitted programs now account for 53% of premiums.
Auto programs saw the most significant increases, while cyber, management liability, and workers’ compensation experienced declines, reflecting broader market adjustments and changing risk appetites.
Although renewal rates dipped slightly to 82.3%, the lowest since 2011, larger firms maintained strong retention rates, suggesting that established firms may have a leg up when it comes to client loyalty. Larger administrators reported not only higher retention rates but also the highest profit margins, the highest proportion of revenue increases, and more new program introductions than smaller administrators.
Respondents to the TMPAA State of Program Business Study 2025 identified key strengths of the program model, including niche specialization, underwriting talent, speed to market, and increasing use of technology. Overall, program administrators and carriers have a positive outlook for continued expansion, with 96% of administrators planning to launch new programs in the next two years and 59% planning to launch two or more.
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Artificial intelligence (AI) emerged as an important topic in the 2024 Target Markets survey. Most administrators and carriers described their engagement as early-stage and said they are still learning the pros and cons of AI investment. About 28% of administrators and 35% of carriers maintain dedicated AI budgets. Among carriers, 31% consider AI a strategic priority, 29% are investing cautiously, and 25% are just beginning to explore applications.
Opportunities lie in continued growth, deeper AI and data analytics integration, specialization in emerging risks, and stronger carrier administrator partnerships. Many view AI as a future enabler of more innovative underwriting, faster decision-making, and improved customer service, the survey said. The consensus is that the industry is only beginning to explore its full potential
Threats include capacity constraints, reinsurance volatility, market saturation, regulatory scrutiny, economic pressures, and weak underwriting discipline among new entrants. Heavy dependence on capacity and reinsurance support, uneven underwriting discipline, fragmented data and technology infrastructure, and intense competition remain key concerns, the report said. Talent shortages across underwriting, technology, and leadership roles further complicate growth and operational resilience.
The report noted that interest in nontraditional carrier structures is gaining ground. “A growing number of administrators are exploring hybrid fronting and fronting carrier models to access capacity and navigate underwriting constraints. While adoption remains measured and future expansion is uncertain, the trend points to a broader willingness to consider flexible arrangements that support growth and specialization,” the report said.
Program business is expected to continue outpacing broader P/C growth, with technology, specialization, and disciplined underwriting as key success drivers. Looking ahead, administrators, insurers, and service providers remain optimistic about the sector’s future, consistently describing it as a bright spot in the insurance ecosystem, the report said.
The 10th biennial survey presents 2024 business results and reflects the perspectives of 99 program administrators representing 930 programs, 70 insurers representing 1,836 programs, and 46 service providers.