Analytics firm Demotech has reported the financial results of risk retention groups for Q1 2014, with RRGs having adequate capital to handle losses.
Cash and invested assets have increased at a faster rate than total liabilities, the firm found.
Since 2010, cash and invested assets also increased 68 percent and total admitted assets increased 50.7 percent.
Demotech also found that RRGs collectively increased policyholders’ surplus by 50.7 percent and liabilities increased 46 percent. The increase represents the addition of more than $1.5 billion to policyholders’ surplus.
Liquidity, as measured by Demotech, for Q1 2014 was 71.9 percent. This shows an improvement for RRGs as liquidity was reported at 72 percent for Q1 2013.
Loss and loss adjustment expense reserves to policyholders for Q1 2014 was 89 percent, a lower amount compared with Q1 2013.
