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Thorough due diligence limits surprises, unwanted outcomes on program package: internal carrier resources are critical to success in program business arena.

Article Excerpt
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SPECIALTY PROGRAM BUSINESS can provide a noncorrelated source of profitable commercial premium for companies looking for top-line growth or to supplement their core books of business. If not done properly, however, it can be the source of unanticipated losses and unwanted surprises.

A comprehensive initial due diligence undertaken in advance of creating the delegated authority relationship, together with an ongoing professional audit and review process, will greatly improve the opportunities for success.

Recognizing that the process is considerably more involved than what can be described in a brief article we outline some of the key aspects from a risk capital provider's perspective below.

* Look Inward: To be successful in the program arena, the under writing company must be properly positioned to conduct program business.

The first step is to look internally to evaluate structure, process and resources dedicated to developing and managing program operations. The company must be organized and resourced to enable it to support and manage multiple programs in various business segments, while at the same time objectively monitoring profitability, performance and compliance.

If the company lacks experience or capability in the program area, it is extremely unlikely that it...

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