Fostering Optimal Program Relationships

Program startup and transition costs vary, but even smaller programs can reach the high six or even seven figures for carriers and program administrators alike.

The cost rises even further when accounting for lost growth potential when it’s necessary to transition a program. Time, effort, and the distraction of moving a program, or the lost time that may have otherwise been spent on developing other new program opportunities, leads to additional cost.

Given this large investment, it is worth examining behaviors that create strong relationships and mutual success in the form of underwriting profitability and growth.

Each party brings complementary strengths to the relationship. The program administrator has a detailed understanding of client needs, close relationships with retail distribution, specialized underwriting and risk management expertise, program-specific actuarial and predictive modeling, and a problem-solving mentality. Carriers bring access to industry-level information and trends, insights into other businesses and potential commonalities, modeling resources, additional claims expertise, and a risk-bearer perspective that can help foster better underwriting performance.

Combining these strengths through open communication and transparency, as well as considering each partnership action through the other party’s point of view, leads to stronger and more productive relationships. This produces increased levels of underwriting profitability, support for coverage and appetite expansion, better outcomes for customers, and program growth.

At the annual Target Markets Program Administrators Association meeting in October 2025, I moderated a panel conversation on “What Makes a Good Program Partner.” The session combined perspectives from leading program administrators and carrier executives to explore what mutual expectations should look like, how clear and consistent communication can strengthen partnerships, and how both sides can adapt together for long-term success.

Based on a combination of that panel discussion and my own perspective, here are some ideal behaviors for both parties, the benefits of these actions, and the potential negative consequences of contrary actions.

Collaborative problem solving.

Shock-losses or other major program issues such as capacity constraints, changes in reinsurance availability or cost, increased loss trends, or other unexpected challenges occasionally happen. Program administrators need their carrier partner to react to these negative developments in a measured and collaborative fashion, so that the underlying cause of the problem is addressed and the actions taken do not unnecessarily punish unrelated clients. This ensures that the more profitable risks stay in the program and adverse selection is not introduced.

Additionally, the programs space is widely expected to be more stable than the general marketplace, so carriers that are more deliberate and collaborative in making underwriting changes will generate increased loyalty from the program administrator, the distribution channel, and customers.

Maintaining a portfolio focus.

This may come across as obvious, but I have seen some carriers take inflexible stances on individual accounts or small subsets of accounts that while taken on their own are not perfect but are part of a larger relationship or a program administrator’s market presence. Granted, these suboptimal accounts cannot be too far off target, or aggregate to a level that creates imbalance in a book of business. However, programs are supposed to create solutions for classes of business and their retail relationships.

If a given program can responsibly write some of these accounts (in balance with the portfolio), the program maximizes its value to retail partnerships and is positioned to write a larger share of the best-in-class risks as well. Being focused purely on single accounts risks losing preferred accounts to competitors who will leverage their ability to provide a broader solution to secure the most profitable business.

Program administrators need to be adept at quantifying the impact of each account on the overall portfolio mix and regularly communicate the projected portfolio profitability to their carrier partner so that all parties understand the evolving composite results of the strategy.

Valuing program administrator feedback on coverage expansions and restrictions.

Carriers who work to promptly evaluate, construct, and implement new or broader coverage offerings with their program administrators are some of the best partners to have. This demonstrates a commitment to keeping the program market relevant (ideally leading) and speaks to a carrier’s trust that their program partner understands the needs of the collective customer base.

Carrier shortfalls can include inflexibility on new coverage concepts due to unproven wordings, or sometimes even carrier proposals to constrain coverage because they see non-program divisions of their company taking certain actions. Pushing coverage restrictions without regard to conditions in the program space or underlying profitability of the program is almost always a mistake.

Most programs look to differentiate their coverage and service offering so that customers are willing to pay slightly more to belong in the program and form longer-term relationships, versus the annual bid mentality that can be more prevalent in the general market. Programs that are successful in doing this run higher retention ratios of their better-performing accounts and as a result produce better underwriting profitability.

Responsiveness.

Some carriers are deliberate and decisive, often because the primary levels of program management are empowered to make business decisions. Carriers in this category are amazing to work with because while they may adjust the program administrator’s recommendation, they usually put the program in the best position to write quality risks (even when complicated) and cast each party in the distribution chain as solutions oriented.

On the other end, carriers that do not empower their programs team to make key decisions often spend so much time on analysis or approval requirements that quality opportunities pass them by. This creates significant problems for program administrators as they have typically provided guidance on turnaround timelines or might be looking to provide a solution when a competitor stumbles. In either case this damages the program’s reputation in the marketplace and prevents both parties from capitalizing on opportunities.

Continuous underwriting improvement.

Being an underwriting expert in your specialty and having distribution relationships is not enough. Program administrators should be constantly scanning the market for better ways to understand and measure the risks they underwrite, and work with their actuaries and the carrier to integrate that into their process.

Without continuous improvement, the program administrator’s underwriting capabilities will fall behind that of their competition and eventually result in adverse selection for the underlying program.

Be willing to walk away from unprofitable business.

There are accounts and programs where the program administrator does not have the right tools to quantify and charge the correct premium or structure the offering in a way that will produce an underwriting profit. This could be due to the constraints of operating on an admitted basis, because the marketplace will not support required actions, or because there is just too much uncertainty.

While the immediate financial consequences to a program administrator of non-renewing a large account or shutting down a program completely can be daunting, program administrators need to be willing to recognize these situations and act. If they do not, they are not fulfilling their obligation to put carrier underwriting profitability as the number one priority.

My company and I made this determination about a program and collaborated with our carrier to mutually terminate our agreement and wind down the program. While the carrier was disappointed that the program did not work out as hoped, they respected and agreed with our recommendation.

Measure and reference success in underwriting profits generated, not premium volume.

Citing volume of business written may be meant to show a positive point of reference, but without connecting that to the combined ratio produced for its carriers, the program administrator comes across as focused on top-line growth instead of underwriting profitability. This can create an environment of mistrust in any program relationship (and certainly does not support establishing a new one).

Instead, be sure to understand and speak about the combined ratio of programs under management. Carriers that hear program administrators talk in these terms know that the program administrator places more focus on underwriting profitability and as a result is more willing to listen to new opportunities with an open mind.

Edicts and ultimatums.

These wear down relationships because there is a winner and loser, which sows resentment and mistrust (and often a resolution to find a new partner). Instead, working collaboratively, in a way that values the interests of both parties, can result in unique solutions and achieve better outcomes for the program and for the strength of the partnership.

Lack of Transparency.

Not sharing how each party views the business at a detailed level (cost components, constraints, preferences, goals, corporate requirements, etc.) creates a disconnect between how each party views the business and how to create mutual success going forward. If partners are operating with incomplete information, then it is hard for them to anticipate needs and address those in a meaningful way. This often results in unnecessary conflict and impedes program development.

Some of the most enjoyable and productive program relationships I have had included people that I knew and cared for on a personal level. This kind of relationship is not easy to build as we often focus heavily on business, but it is important to also spend time together as people.

As an industry, we often have meals together, which is a great foundation, but I would advocate for broader fellowship between the program teams at each company. Many group activities can develop this deeper connection between the teams. The key is for the activity to be broadly enjoyable and provide time for actual interaction.

Ultimately, successful relationships are those based on transparency, where each party understands and properly considers their counterpart’s interests, integrating that insight into their communication with the other party and their overall decision-making process. Challenges will arise during any long-term partnership, but in the words of John Colis (CEO, Euclid Insurance Services), “both sides need to extend some grace to each other.” If they do, and they assume the best of each other, then they will be positioned to productively address challenges and reach optimal outcomes for the program and for each other.