Program Insurance Market Faces Sustainability Stress Test
The program insurance market is growing rapidly, but it’s entering a more fragile phase. Rates are starting to fall, litigation pressure is rising, and risks are becoming harder to predict. Despite continued capital inflow and innovation, there’s growing uncertainty about whether the current expansion is sustainable.
At the 2025 TMPAA Mid-Year Meeting in Dallas, industry executives shared their insights on the shifting market landscape. “From a distribution standpoint, it’s as healthy as ever,” said Chris Pesce, Division President of One80 Programs at One80 Intermediaries. “We have record attendance at this year’s conference – more program administrators, more carriers. This segment continues to outpace non-program commercial insurance in growth.”
However, growth is only part of the story. Industry leaders are bracing for a potential market shift. Pricing pressures and a surge in capacity are changing market dynamics. “There’s no question – we’re at a tipping point,” Pesce noted. “Rates are starting to go negative, especially in property, and Lloyd’s still has capacity it won’t deploy this year.”
The shift isn’t uniform across all sectors. While property insurance is softening, liability remains constrained due to a challenging litigation environment. “Litigation is out of control,” Pesce said. “Settlements are getting larger, and no one wants to be the next nuclear verdict.”
Patrick Charles, Head of P&C North America at SiriusPoint, highlighted the auto market as a persistent pain point. “The MGA sector isn’t immune,” he said. “We’re all dealing with loss trends and social inflation. California wildfire losses have also complicated an already complex space.”
Despite rising loss ratios in some areas, the industry’s appetite for innovation remains strong. Executives pointed to the flexibility of program structures and the rise of hybrid fronting models as key factors in the sector’s resilience. “The program market continues to be where innovation happens,” said Jennifer Burnham, Division VP at Great American Alternative Markets. “We’ve built this segment to be agile, pulling in reinsurance when needed, adapting quickly when the standard market can’t respond.”
Innovation now increasingly hinges on data management. Julie Gibbs, Regional Head of Portfolio Solutions at Allianz Commercial, emphasized that the future of delegated authority will be defined by how well MGAs and carriers manage their data. “We’re already seeing strong collaboration in data sharing and management, but it’s going to have to evolve even faster,” she said.
The industry faces a looming talent gap as boomers retire. “There’s a looming gap with boomers retiring,” Burnham noted. “While we’re seeing strong internship programs and college outreach, we still need to do more to bring new talent in.”
Experienced talent is shifting from carriers to MGA startups, creating both opportunities and challenges. “You’ve got major movement happening,” Burnham added. “Pair that with investment capital backing new ventures, and it’s a powerful combination – but only if that talent has the infrastructure and support to execute.”
The changing geography of risk is another key concern. What were once considered fringe exposures are now central to underwriting conversations. “I used to think of catastrophe risk as just Texas and Florida,” Burnham said. “Now it’s North Carolina. Now it’s Oregon. We’re underwriting a very different map.”
Despite early signs of market softening and increasing claims volatility, there’s excitement in the program space. Carriers are engaged, capital is flowing, and innovation is thriving. However, survival in the next phase will require readiness rather than reaction. “This is a market that rewards specialization, agility, and long-term vision,” Gibbs said. “The ones who build for scale, who invest in data, and who keep their underwriting sharp – they’ll be the ones who lead.”
