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By CYRIL TUOHY, managing editor of Risk & Insurance®

The Target Markets Program Administrators Association (TMPAA), appealing to the needs and habits of its up-and-coming members under age 40, launched its inaugural Leadership 2.0 meeting Monday.

"We're reaching out and saying, 'Look, we want your help,' " said Kronenberg, in an interview with Risk & Insurance®. "Reaching out to the younger members is clearly a major initiative of the association, especially around communication."

Previous attempts to reach members through social communication Web pages on the TMPAA Web site, for example, have not worked well, said Kronenberg.

As a result, Kronenberg said, the time has come for an aggressive initiative to solicit members on how best to communicate more effectively with all segments of the trade group's membership.

At a time when every TMPAA member--indeed almost every member of America's managerial classes--has a Blackberry device glued at the hip and has 24-hour-a-day access to social networking sites like Facebook, the issue for TMPAA leadership is to find out what its members really want and how they prefer to be reached.

"Clearly, every organization needs to grow to be relevant," said Kronenberg. "What we said was that we need to be relevant to the market. We're not a social organization; we're a market-relevant organization."

More than 610 people are in attendance at this year's 9th Annual TMPAA Summit, from Oct. 26 to 28 in Scottsdale, Ariz.

MARKET TURMOIL TARGET MARKETS

Kronenberg also discussed how the troubles at insurance giants AIG and The Hartford have opened the door for program administrators to press ahead in seeking out new relationships with carriers and renew old ties that have lain dormant.

Program administrators work with carriers to underwrite, sell and administer insurance products targeted at niche markets or classes of business placed through one carrier. For example, a program administrator could manage a program from a carrier that focuses only on environmental risk. Another option would be to focus on risks common among state and local governmental entities.

These two different classes of risk are placed through a carrier. The carriers write the checks when a loss ensues, but rely on program administrators to help carriers structure an insurance program.

With the more unusual or complex risks, the more carriers rely on program administrators, particularly if and when administrators remain an island of security and predictability in an ocean churning with underwriters.

Big changes that have roiled AIG have sent program administrators scurrying to review or restructure their contracts with carriers, said Kronenberg, all of which underscores the necessity of having a close working relationship between the program administrator and the carrier.

"There is a realization that nothing lasts forever, and they need to look hard at their contracts and relationships and seek out new partners, which help target markets and speaks to their relevance and significance," said Kronenberg.

AIG, said Kronenberg, has had to work hard to hang on to its program administrators as other carriers have moved into to take AIG's program business. Those changes have spawned plenty of new opportunity.

Alan Belthoff, an executive vice president and chief operating officer in small business for what was then AIU Holdings and is now Chartis, said after the April Target Markets meeting that the company's underwriters continue to look for ways to partner with the program administrators.

"We can approach this as an affinity opportunity and contemplate the buying group and say, 'What unique terms and conditions can we offer that build strength in the program and ultimately benefits the insured?' " Belthoff said.

With the upheaval among carriers during the past year, "one person's pain is another person's gain," said Kronenberg. "Program administrators suffer and benefit at the same time."

Kronenberg was the former CEO of Professional Underwriters, a program administrator specializing in the public-entity segment.Before Professional Underwriters, Kronenberg was CEO of ECS, which was acquired by XL Capital and is now know as XL Environmental.

The TMPAA represents 193 program administrators, 51 carriers and 56 vendor members.

October 27, 2009

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