Re-entry into the Traditional Insurance Marketplace The experience of one member can lead to all members having to pay extra premiums. Poor Underwriting Results from other Members The Disadvantages of Risk Retention Groups The professional services of an underwriting manager and claims staff can be hired or set up to develop expertise specifically for the Risk Retention Group's interests. Members often need to share information about their businesses, which can help their operations. Members have superior insight into what their exposures are and can address them accordingly allowing them to be included in the insurance coverage.Īs members are at risk they will be more receptive to implementing loss control measures that will, in turn, improve losses and reduce premiums. There is more stability of insurance as in fluctuating market conditions, a Risk Retention Group allows members to more accurately know what their insurance costs will be and to plan accordingly.Ĭoverage is often broader than in the regular insurance market. The Risk Retention Act allows Risk Retention Groups to be formed and to be exempt from state laws. The advantages of establishing a Risk Retention Group can be summarised as follows:Īs risk Retention Groups are owned by their members, profits are retained by policyholders rather than being passed to a commercial insurer.
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