About 460 risk retention groups have been created since 1986 and about 240 of them have gone out of business, AM Best Associate Director Fred Eslami said during a July 30 webinar hosted by the firm.
“The right reason for setting up a risk retention group is when the commercial insurance industry is not properly providing the right coverage or the stability of coverage and pricing that a certain sector needs,” Pamela E. Davis, president and CEO of the Nonprofits Insurance Alliance, told CQ Roll Call after the webinar.
“If you are just trying to do something that you believe will underprice the market, and make a quick profit you are not likely to succeed with a risk retention group,” she said.
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