Risk Retention Group Benchmarking Study Available

actuarial report

Risk Retention Group Benchmarking Study Available

The 2018 Risk Retention Group (RRG) Benchmarking Study, an in-depth look at RRG financial statement data, complete with trends and comparisons to the admitted market, is now available from Pinnacle Actuarial Resources, Inc., Bloomington, Ill., a property/casualty actuarial firm.

The Benchmarking Study examines a wide variety of metrics, including the number of RRGs, capitalization, premiums, loss and loss adjustment expenses, loss development patterns, underwriting expenses, underwriting and investment income, and operating ratios.

One of the report’s key elements is a review of RRGs by industry segment – other liability, commercial auto liability and medical professional liability. According to Pinnacle, this allows for more in-depth analysis of metrics such as premium risk state, combined operating ratios and subsequent loss reserve development.

As featured on the IRMI Captive.com website, some of the report’s more interesting findings include the following:

  • Annual RRG premium volume has increased significantly in recent years, totaling more than $3 billion in 2017, up from just over $2.5 billion in 2014.
  • Of the 226 RRGs identified in an A.M. Best Co. database for 2017, nearly two-thirds were domiciled in 3 states: Vermont, where 37 percent of RRGs were domiciled; South Carolina, where 15 percent of RRGs were domiciled; and Washington, DC, where 13 percent of RRGs were domiciled.
  • Medical professional liability (MLP), was, by far, the biggest line of coverage written by RRGs. The nearly $1.8 billion of MPL premium volume in 2017 was roughly 60 percent of RRGs’ total premium volume.

To download the report, click here.