“Program business, in my view, denotes specialization. There's definitely been a move toward specialization, especially given the recent market shifts and the conditions that we face today. There's more and more business coming into the excess and surplus line sector, and as a result, increasingly businesses being handled by generalists.
What the retail broker was looking for, to solve problems effectively, is specialization. That's what program managers speak to.
There's a lot of growth and interest in programs. It comes from a number of different angles. One, there's a robust M&A environment for program administrators. Increasingly, you see sole proprietors, program managers that want to sell their firms, based on the valuations they perceive in the market. Sometimes it's driven by succession.
Also, there's an increased interest in the part of carriers to partner with program managers effectively, to drive costs down and be more efficient, when they run a business model.
The program and wholesale business is a very, very busy space. If we looked at six months of last year, double digits increases in most stamping offices for excess and surplus lines. By the time the bill is tallied, the excess and surplus lines market in the U.S. is north of $50 billion.
There's going to be increased scrutiny and focus on best in class distribution partners on the part of retailers in terms of wholesale. Wholesale is going to grow. It's going to be robust. This is a prolonged period of market disruption that we're facing, and so it's going to be quite important.”