The program administrator and managing general agency (PA/MGA) market continues to thrive and is well-positioned for growth in the year ahead, according to “Poised for Growth,” the annual specialty insurance program issuing carrier survey from Guy Carpenter, a global risk and reinsurance specialist.

“The results from this year’s survey indicate the continuation of a thriving PA/MGA market,” said Bill Harris, managing director of specialty programs at Guy Carpenter. “Based upon the results, we are seeing an emergence of themes on change, flexibility and growth that reflect a positive outlook for the year ahead. We look forward to seeing further collaboration between the PAs/MGAs and their carrier counterparts as they work together to achieve mutual growth and profitability in this vibrant insurance market segment.”

Highlights from the survey:

The top challenges are maintenance of rate level (62 percent), new business production (44 percent), professional submissions, such as updated loss information, premium data and financial information on the PA/MGA market (38 percent), maintaining volumes (32 percent), systems (29 percent), PA relationships (29 percent), new competitors (15 percent) and commission levels (6 percent).

The use of direct reinsurers and intermediaries increased to 76 percent from 66 percent last year.

The majority of respondents said the PA/MGA market is now smaller than in past years, but 65 percent said the market would grow in 2013.

Respondents indicated less interest in growth through acquisitions, 44 percent compared to 56 percent last year.

The survey, which analyzes trends and benchmarks movement and offers year-over-year results, includes analyses of the marketplace from the program issuing carriers' perspective, as well as responses specialty insurance carriers and traditional carriers that have specialty program operations.

This year, a record-high percentage of traditional carriers (77 percent) responded. Participants included agencies, underwriters, reinsurance intermediaries and third-party service providers, such as claim administration firms, Guy Carpenter said.

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