Annual gross written premium generated by risk retention groups formed to provide a range of liability coverages for insureds engaged in the health care industry has more than tripled in five years–from $403.6 million in 2001 to $1.273 billion in 2005.
The subarea among health care RRGs showing the greatest premium growth is nursing homes, where premium has soared by a factor of almost nine since 2003–from $10.1 million to $86.9 million.
Although no RRGs had formed in this business area prior to 2002, more than 20 have formed since 2003. This is in response to hard-market conditions, in which traditional insurers raised rates for nursing home owners and operators to what buyers considered to be exorbitant levels.
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