RRG Cession Rate Holds Steady in 2020

The risk retention group cession rate held steady in 2020, with RRGs collectively ceding 45.8% of premium to reinsurers in 2020, a slight increase from the 45.4% of premium ceded to reinsurers by risk retention groups in 2019. The hard market has tightened the reinsurance market, but that tightening does not appear to have had a significant impact on overall cession rates for the RRG industry.

In an April 2021 Risk Retention Reporter Special Feature, Bill Hodson of Gulfstream Risk Advisors, LLC noted that the hardening market had a larger impact on the property side of P&C lines, with tightening for liability lines being more selective. Hodson noted the liability lines affected included E&O, D&O, commercial general liability for certain industries, including nonprofits, and commercial auto liability.

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