Program Administrator / Specialty Program — Administration Fee on Managed Insurance Program

💡 Accountant's Note

Program administrators specialize in niche markets — they develop underwriting criteria, marketing materials, distribution channels, and claims management protocols for specific industry segments or risk types: horse farms, towing companies, golf courses, marinas, fitness centers, cannabis dispensaries, professional employer organizations, etc. The carrier provides the risk capital; the program administrator provides the expertise and distribution. Revenue: the program administrator earns a fee (25–35% of program premium) for designing and administering the program — significantly higher than retail broker commissions because the administrator is doing the carrier's underwriting work. The fee is earned at policy binding — point-in-time for each policy written in the program. Profit commission (additional income): if the program's loss ratio is below the target (the program administrator's underwriting discipline benefits both the carrier and the administrator through profit sharing).