EDIC Provides a Roadmap for RRG Success

Formed in 1992, Eastern Dentists Ins. Co. (A Dental Society RRG) (EDIC) has successfully served its members for more than 30 years. The Risk Retention Reporter spoke with EDIC President and CEO Edward Carroll on the factors that have contributed to EDIC’s long-term success, navigating a challenging investment environment, and strategies for achieving healthy premium growth at a small risk retention group.
Carroll took over as the EDIC president in July of 2022 after holding leadership roles at the traditional medical professional liability carriers ISMIE Mutual Insurance Company and CMIC (recently rebranded as Integris Group).

Risk Retention Reporter: You came onto EDIC from traditional medical professional liability carriers, namely CMIC and ISMIE. How does EDIC, which is focused on dentists, compare to your experience at traditional MPL carriers?

Edward Carroll: It’s actually very similar to the MPL—formerly PIAA—companies. Most of those companies came out of the state medical societies during the malpractice insurance crunch. The societies started their own insurance companies that were focused on providing coverage at a reasonable price for their members. That is even more so for RRGs, due to the RRG focus on liability insurance. The move was a good fit, because I was used to that type of organizational focus both at CMIC and ISMIE. Prior to that I was at Chubb which is a huge multinational stock company. The focus there was on delivering shareholder value. The are different pressures for companies like Chubb. At EDIC—like ISMIE and CMIC—we focus on making sure that our members are taken care of.

The investment market was tough in 2022, with both bonds and stocks taking a tumble, contributing to surplus declines for RRGs collectively. How has EDIC approached the current investment market?

Carroll: We’re fortunate that we are very well capitalized, and we don’t need to sell bonds or any other assets to fund operations. So, the hit to surplus right now is really all on paper. Our board understands that, the company understands that, and AM Best understands that as well. AM Best recently reaffirmed our rating of A- stable.

We are staying on top of it, but we’re not going to try to chase rate in the investment market. We are buying more bonds at a higher interest rate as our current bonds expire, which is helping regarding our bond yield.

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