Best’s News & Research Service - August 10, 2018 01:07 PM (EDT)
A.M. BestTV at VCIA: Insolvencies Tied to RRGs Formed for Short-Term Reasons, Says Medical Liability Panel
- August 10, 2018 01:07 PM (EDT)
Oldwick //BestWire// - In this A.M. BestTV episode from the annual Vermont Captive Insurance Association (VCIA) conference in Burlington, VT, captive experts say that some risk retention groups (RRGs) that were formed to take advantage of temporary hard-market conditions had poor outcomes compared with RRGs that pursued better underwriting and reserving practices.
Click on http://www.ambest.com/v.asp?v=medmalrrg818 to view the entire program. For full video coverage of the VCIA 2018 conference, including exclusive executive interviews, visit http://www.ambest.tv/vcia18 .
The panelists spoke about the spate of insolvencies among medical liability RRGs.
“Most of the insolvencies that we’ve seen have really been driven by what I’ll call the entrepreneurial RRGs — those who came in at the hard market and decided that this was a profit-making opportunity for them,” said Bruce Whitmore, vice president and senior resource consultant at Willis Global Captive Practice. “If we look at those RRGs that were formed for the right purpose … those organizations have continued to do well and will continue to do well in the future.”
Michael Reveliotty, business development leader at Coverys, said the insolvencies are a concern for the rest of the marketplace, with that concern extending to their insureds.
“The positive side is for the rest of the market, albeit challenging times, there may be an opportunity, for the right price, for companies to pick up and provide capacity to those affected policyholders,” said Reveliotty.
Other VCIA-related episodes of A.M.BestTV include:
- Soaring Risk: Panelists Explain How They Launched a Hang-Gliding RRG: Risk professionals behind a RRG devoted to covering hang gliders and their associations describe how they crafted their own risk solution after losing traditional coverage: http://www.ambest.com/v.asp?v=hanggliding2818 .
- Traditionally Low Profile, the Captive Sector Draws Increasing Scrutiny: Executives say captive insurers are drawing increased attention from regulators, tax authorities and their own sponsors: http://www.ambest.com/v.asp?v=vcia1818 .
- Rated Captive Insurers See Strong Performance Compared With Commercial Peers: A.M. Best Associate Directors Susan Molineux and Fred Eslami say the performance of rated captive insurers once again outperformed their counterparts in the commercial casualty segment: http://www.ambest.com/v.asp?v=vciaadvance818 .
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