Risk Retention Groups' Premiums Increase during First Quarter of 2022

Risk retention groups (RRGs) saw increases in premium volume in the first quarter of 2022, according to a newly released analysis by Demotech, Inc.

In all, RRGs reported $2.1 billion of direct written premiums in the first quarter of 2022, up 7.9 percent over the first quarter of 2021, according to Demotech's Analysis of Risk Retention Groups—First Quarter 2022: RRGs Report Slight Increase to Policyholders' Surplus (June 8, 2022), while during the same period net written premiums rose to $1.4 billion, up 9.1 percent over the first quarter of 2021.

In addition, from the first quarter of 2021 to the first quarter of 2022, RRGs' cash and invested assets increased by 4.2 percent, while total admitted assets increased by 4.4 percent.

"RRG s remain financially stable while providing specialized coverage to their insureds," said the RRG report, which was written by Demotech Senior Financial Analyst Douglas Powell. "The financial ratios calculated based on the reported results of RRGs appear to be reasonable, keeping in mind that it is typical and expected that insurers' financial ratios tend to fluctuate over time."

Created in 1981 by Congress under the Product Liability Risk Retention Act and expanded in 1986 under the Liability Risk Retention Act, RRGs can underwrite members' product liability and casualty coverages with the exception of workers compensation.

As reported earlier, Vermont in 2021 had the most RRGs of any state—82—followed by South Carolina with 42 and the District of Columbia with 28.