Program Managers vs. Wholesalers – Key Differences

What are the differences between insurance program managers and wholesalers?

Every deal to buy or sell insurance needs a whole cast of characters, each with a particular role to play. They may appear to do similar things, but their job functions differ greatly in practice. In this article, we break down two different roles in the world of insurance: insurance wholesalers and insurance program managers (often called managing general agents or program administrators).

What is an Insurance Program Manager?

A program manager is an insurance specialist who offers a high level of expertise to clients. Those seeking insurance coverage would seek out a program manager because they need something very specific.

Program managers are specialists working in specific insurance niches and concentrate on certain types of exposure and risk. They represent both the carrier and the insured. They seek to offer both top quality expertise in their area of specialization. 

What is an Insurance Wholesaler?

An insurance wholesaler helps a broker get access to a particular market. Brokers often go to a wholesaler because they can’t access that market — some markets never work directly with brokers — and so the wholesaler can provide this service. No brokers have agreements with every single carrier. Also, often smaller brokers don’t do enough business with a carrier to have an agreement. To access those carriers the broker will have to go through a Wholesaler.

Brokers will also turn to a wholesaler to access specialized coverages for a particular kind of risk. It’s very often with a non-admitted carrier. 

However, unlike program managers, wholesalers are not insurance specialists. They are generalists, working in many areas but not very deeply in any one area.

And, though wholesalers can access specialized markets they are not specialized in any market as a program manager would be.

The Benefits of using a Program Manager

Program managers can offer the insured a specialized and high value insurance product, as well as the benefit of their expertise in a particular insurance area. Wholesalers might get you a good insurance rate, but they wouldn’t necessarily guarantee you a top-quality insurance product or have the specialized knowledge a program manager would offer.

Program managers can accept applications on behalf of an insurer, underwrite and represent insurers by issuing their insurance policies — all things a wholesaler does not have the authority to do.

For each line of insurance coverage, a program manager has binding authority from a particular insurer. A program manager can also underwrite deals to buy insurance on behalf of this insurance carrier — carefully examining the risks that a proposed insurance plan would cover for each insurance buyer and balancing those risks against the premiums the buyer would pay.

In conclusion, a program manager, such as Distinguished, offers specialized coverages with access to industry experts. Many program managers have deep relationships with carriers allowing them to understand the nuances of the program and more freedom with underwriting flexibility.

Distinguished is a program manager specializing in insurance for Real Estate, Community Associations, Hotels & Restaurants. Eligibility and specific coverage information can be found on the Distinguished website. 

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