Poll Finds Strong Majority Of RRGs,
PGs Favor Property Coverage Addition
BY KARRIE HYATT
In two recent surveys, strong majori- ties of risk-retention group (RRG) and purchasing-group (PG) managers indicate they would be in favor of
offering property coverage to their
members if given the opportunity.
The Risk Retention Reporter
conducted the surveys in response to introduction of the
Risk Retention Modernization
Act, H.R. 2126, to the House of
Representatives in June.
If passed, H.R. 2126 would allow both RRGs and PGs to write
property coverage in addition to
the liability coverage they already offer.
H.R. 2126 would also create a
mediator in the Office of Federal
Insurance to settle disputes between
non-domiciliary states and RRGs
and PGs; and it would set corporate-governance standards for RRGs.
In 2006, the Risk Retention Reporter conducted a similar survey,
canvassing only RRGs. At that
time, only 40 percent of respondents were interested in property
coverage for their group.
The reasoning for the change
would seem to be the difference in
markets. With the soft market, being able
to write a more comprehensive package
would help to keep members and attract
At the time of the last survey, taken at
the height of the hard market, property
didn’t make such a big difference.
Of RRGs surveyed this summer, 66
percent say there would be a moderate to
definite likelihood their RRG would add
property coverage to the products offered
to their members. Only 34 percent answer
there is little to no possibility their RRGs
would offer the coverage (see chart).
The PG survey returns even more positive results: 33 percent of PG managers indicate they would definitely add property
coverage. Another 33 percent note a high
Purchasing Groups Risk Retention Groups
10% 20% 30% 40%
What Is The Likelihood You Would Offer
Property Coverage To Members?
likelihood they would offer the coverage;
and 11 percent answer there is a moderate
likelihood of offering the coverage. Just 23
percent respond there is little to no chance
they would offer property (see chart).
63 percent indicate there is a high to very
high chance that the additional coverage
would positively aid their business.
RRG managers are less enthusiastic,
with only 30 percent responding
there would be a high to very high
chance that it would help them.
Another question asked was
whether respondents thought the
ability to write property insurance
would make their business sec-
tor more competitive—with new
RRGs and PGs forming to write
that type of coverage.
Only 35 percent of PG respon-
dents believe it would negatively
affect their business and 65 per-
cent think there is moderate to no
chance the addition of property
coverage would make their busi-
ness sector more competitive.
The majority of RRG respon-
dents, 59 percent, also say they
believe the chance of new com-
petition would be low to unlikely.
Many survey respondents are
enthusiastic about the opportunity
to offer property coverage (espe-
cially auto). Several respondents,
however, note the substantial dif-
ferences between underwriting
and claims handling for liability
and for property, observing that many
existing groups would not have the ex-
perience to manage property coverage—
and they caution that careful preparation
would be needed of RRGs before entering
the property arena. NU
BOON TO BUSINESS?
Both PGs and RRGs were asked whether
the addition of property coverage would be
a boon to their business and allow them to
expand their base of insureds.
PGs are overwhelmingly more positive
about the impact that HR 2126 would
have on their business. Of PG respondents,
Karrie Hyatt is man-aging editor of the Risk
She can be reached at