Are you considering entering a new program business in 2018? It’s hard to argue with the track record of program businesses lately. You probably remember that the 2017 TMPAA State of Program Business Study found growth in the program industry far outstripped growth in the commercial lines market. In fact, the industry revenues were up nearly 12 percent between 2014 and 2016. At the same time, the number of program administrators is pretty stable, with about 2,100 programs and 1,000 program administrators.
Entering a new program business makes sense, but it requires thoughtful preparation and quick execution, argues a white paper on the TMPAA website. It’s not something to jump into just because it’s trendy. Here are some of the paper’s suggestions for doing it right:
Research the market. Learn about any other players serving the market, and whether their clients are happy or dissatisfied. Are there particular aspects of the program that raise red flags? What are the opportunities for growth?
Team talk. Consult your team and assess whether the program fits with your existing business and could be profitable. Do you have the bandwidth to handle more business or will you need to add staff or outsource pieces of the work?
Strategic plan. Work with your team to come up with a plan, including time frames and responsibility assignments. Make sure you have short- and long-term goals. Put figures to your plans, so you know you have a return on investment that makes it worth the effort. Put it in writing, so all involved will see the path forward.
Technology. Assess whether you have the technology in place to stand the program up and to keep it running smoothly. Whether you’re already a NetRate customer or just considering becoming one, we can certainly help with this step! It’s important to have a technology partner with deep insurance experience.
Marketing. Come up with your messaging and ensure you have the budget to carry it out, even if it means sharing the cost and effort with distribution partners.
Let us know how we can help! Call 877-790-1114 or drop us a line via our website, http://www.netrate.com/contact-us/.