Market Overview

A.M. BestTV at VCIA: Insolvencies Tied to RRGs Formed for Short-Term Reasons, Says Medical Liability Panel


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

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to view the entire program. For full video coverage of the VCIA 2018
conference, including exclusive executive interviews, visit

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

Other VCIA-related episodes of A.M.BestTV include:

  • Soaring Risk: Panelists Explain How They Launched a Hang-Gliding
    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:
  • Traditionally Low Profile, the Captive Sector Draws Increasing
    Executives say captive insurers are drawing increased
    attention from regulators, tax authorities and their own sponsors:
  • 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:

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