Risk Retention Groups' Premium Volume Continues To Increase
January 19, 2024
The premium volume of risk retention groups (RRGs) continues to increase, according to a new report by Douglas A. Powell, senior financial analyst of Demotech, Inc.
RRGs reported $4.3 billion in direct premiums written through the third quarter of 2023, up 1.7 percent from the same period in 2022.
During the same period, RRGs reported a 14.1 percent increase in policyholders' surplus, a rise of $746.3 million.
"RRGs have a great deal of financial stability and remain committed to maintaining adequate capital to manage losses," Mr. Powell said in the report.
In addition, cash and invested assets rose by 8 percent, while total admitted assets increased by 8.2 percent.
RRGs were first authorized under legislation Congress passed in 1981. Under that law, RRGs were only allowed to write product liability and completed operations coverage for policyholder-owners. In 1986, Congress expanded the law by passing legislation to allow RRGs to write all casualty coverages except workers compensation.
Currently, there are 243 RRGs, according to the Risk Retention Reporter.
January 19, 2024
