The program business sector is growing at a rate that outpaces the broader commercial insurance market.

Between 2022 and 2024, program business premiums grew 40 percent to $110.8 billion in 2024, according to estimates in The TMPAA State of Program Business Study 2025, which put 2022 program business premiums at $79 billion. In contrast, over the same two-year time period, premiums earned for commercial P/C lines rose by about half as much, rising some 21.3 percent.

When The Target Markets Program published its first study back in 2011, program business volume was $17.5 billion, less than 15 percent of the 2024 figure.

Between 2022 and 2024, average administrator revenue rose by 49 percent, climbing from $13.8 million to $20.6 million. After two consecutive declines from 58 percent in 2018 to 45 percent in 2020, and then 39 percent in 2022, the percentage of administrators utilizing a Lloyd’s syndicate rose to 53 percent in 2024.

A recent industry survey from the TMPAA found that nearly half of the respondents reported profit margins above 26 percent in 2024, and 37 percent reported profit margins above 36 percent. In 2022, less than one-quarter (22 percent) reported such high profit margins of over 36 percent.

In 2024, 83 percent of administrators and 88 percent of carriers reported premium growth. Over half of administrators launched one to three new programs in the past two years, and 42 percent plan to launch two to three more in the next 24 months. At the same time, 84 percent of carriers exited at least one program, primarily due to poor performance.

Nonadmitted programs now account for 53 percent of premiums.

Auto programs saw the most significant rate 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 percent, 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 percent of administrators planning to launch new programs in the next two years.

Artificial intelligence (AI) emerged as an important topic in the 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 percent of administrators and 35 percent of carriers maintain dedicated AI budgets. Among carriers, 31 percent consider AI a strategic priority, 29 percent are investing cautiously, and 25 percent 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.

Threats include capacity constraints, reinsurance volatility, market saturation, regulatory scrutiny, economic pressures, and weak underwriting discipline among new entrants. Program business is expected to continue outpacing broader P/C growth, with technology, specialization, and disciplined underwriting as key success drivers.

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.

This article was previously published by Insurance Journal.