Risk Retention Groups Saw Significant Premium Growth in 2020

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August 17, 2021 |

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Risk retention groups' (RRGs) premium volume increased significantly in 2020, according to the Risk Retention Reporter.

RRGs' gross premiums climbed to nearly $3.84 billion last year, a nearly 7.2 percent increase from 2019, when RRGs generated just over $3.58 billion in gross premiums.

Of the 15 domiciles with the highest RRG premium volume, Alabama had the biggest RRG premium volume increase, with gross premiums rising 64 percent to $17.7 million in 2020, up from $10.8 million in 2019, according to the Risk Retention Reporter.

Other domiciles with big increases in their RRGs' gross premiums include Kentucky, whose RRGs had $20 million in gross premiums in 2020, a 56.1 percent increase from $12.8 million in 2019; Tennessee with $65.8 million in 2020, up 38.5 percent from $47.5 million in 2019; and South Carolina with $205.2 million, up 36 percent from $150.9 million in 2019.

Domiciles with the highest RRG gross premium volume include Vermont with close to $2.39 billion in 2020, up from nearly $2.18 billion in 2019, and the District of Columbia with $483.4 million in 2020, up from $463.4 million in 2019.

As of July 2021, Vermont had the most operational RRGs—79, up from 78 a year earlier—followed by South Carolina with 39 RRGs, up from 32 a year earlier, and the District of Columbia with 30, up from 29 the prior year.

In all, there were 226 RRGs operating as of July 2021, up from 216 a year earlier.

RRGs were first authorized under legislation Congress passed in 1981. Under that law, RRGs only were permitted to write product liability and completed operations coverage for policyholder-owners. In 1986, Congress passed legislation allowing RRGs to write all commercial casualty coverages except workers compensation.

After meeting the licensing requirements of one state, a risk retention group can operate nationwide with minimal interference from nonchartering state regulators.

August 17, 2021