In the intricate world of insurance, Risk Retention Groups (RRGs) have emerged as a distinctive solution for businesses and government entities.
These specialized entities were brought into existence by the federal Liability Risk Retention Act of 1986, carving a unique path in the insurance landscape. RRGs operate in a manner that sets them apart from traditional insurance companies, granting them the autonomy to serve their members more effectively.
WaterStreet Company offers cloud-based Policy Administration for P&C insurance, designed by insurance experts for insurance experts.
Risk Retention Groups (RRGs)
A Risk Retention Group is a state-chartered insurance company with a specific focus on liability insurance coverage for commercial businesses and government entities.
RRGs are distinctively different from conventional insurers due to their exemption from obtaining individual state licenses in every jurisdiction they operate in. They are not bound by state insurance regulations, further differentiating them from the traditional insurance landscape.
Members of RRGs must be business entities, creating a cohesive and like-minded group that shares a common interest in mitigating liability risks. This collaborative approach fosters a unique synergy within RRGs, allowing them to cater to the specific needs and demands of their members effectively.
RRGs operate as mutual companies, signifying that they are owned by the members themselves. This ownership structure grants the members more control over the insurance processes and decisions, creating a sense of ownership that is rarely found in traditional insurance companies.
How Do RRGs Work?
While RRGs may be licensed as standard mutual insurers, they can also take on the role of captive insurers. A captive insurer is a company established by a parent company for the sole purpose of providing insurance coverage to the parent company. This flexibility in licensing allows RRGs to adapt to the specific requirements of their members, offering tailor-made solutions.
RRGs are tailored to address specific types of liability risks within homogeneous groups. These groups share similar liability risks, which can include professional liability for various fields such as doctors, lawyers, public accountants, and architects. Public entities like municipalities often find solace in RRGs to manage their liability risks effectively. These groups serve as a unique solution for situations where insurance may either be unavailable or unaffordable, a common challenge in the insurance market.
The policies offered by RRGs are designed to cover a range of liability risks, such as medical and legal malpractice. However, it’s important to note that certain risks, like property damage caused by a flood, are not typically covered under RRG policies. These policies can be owned by a variety of entities, ranging from professional organizations like law firms to public institutions such as universities and county administrations.
Policy Administration Needs for RRGs
Here at WaterStreet Company, we have decades of experience working with insurance companies of all specialties. Kelly King, CFO of WaterStreet Company, has offered the following tips to help guide RRGs toward finding the right Policy Administration Software.
1. Robust Member Portal
A well-designed Member Portal is important to ensure efficient policy administration within RRGs. This digital gateway serves as the hub for notifications, renewal processing, endorsements, audit updates/adjustments, payments, claim reporting, and knowledge-sharing. It may host essential resources like news, advice, blogs, and archives. A robust Member Portal enhances member engagement and ensures seamless communication between members and the RRG.
2. Automated Renewal Process
To streamline the renewal process and promote member self-service, an automated renewal process is essential. This process should allow members to easily interact with underwriting decision-makers, ensuring a smooth transition into the new policy term for renewal retention. The ability to customize coverage and make informed decisions is key to retaining satisfied members.
3. Efficient Application Process
The application process for prospective members should be user-friendly and well-designed. An easy-to-navigate application process is crucial for attracting new members and expanding the RRG’s reach. Simplifying the onboarding process can lead to increased membership and growth.
4. Customer Relationship Management (CRM)
RRG managers must have the ability to manage member communications. This involves sending member texts and email blasts to keep them informed and engaged. CRM tools also enable RRGs to prospect professional groups aligned with their target members and collaborate with associations in campaigns. A strong CRM strategy can strengthen member relations and drive growth.
5. Scalability
The right Policy Administration Solution should support a more complex business model if the RRG decides to connect with additional distribution channels or business partners, such as reinsurers. This scalability is vital to accommodate the evolving needs of RRGs as they expand their operations and partnerships.
WaterStreet & RRGs
As the insurance landscape continues to evolve, RRGs stand as a testament to the adaptability and innovation within the industry, providing vital coverage where traditional options fall short.
WaterStreet Company supports RRGs with next-generation P&C Policy Administration Software. Access all policy, claims, and billing data with 60+ standard reports and data integrations throughout for informing the policy lifecycle. Members gain access to their own white-label Insured Portal for easy communication and document sharing.
Reach out to WaterStreet Company today to request a consultation and demo.
