As a member-owned entity, an RRG does not have to follow the fluctuating market price. Overhead is usually lower than for an ordinary insurance company. RRGs are usually managed by cost-conscious outside management firms that vie for RRG business. The cost savings can be passed on to the members through lower premiums or dividends. Specialized underwriting is another plus.
Underwriters serving risk retention groups become experts in one industry.
Similarly, specialized coverage is also intrinsic to RRGs, as their policies are tailor-made to meet the needs of one industry. RRG members must put up capital to join, so most stay with the RRG for the long haul. As a result, agents usually do not have to get competitive quotes at renewal. Easier renewals and a high retention rate mean agents can spend more of their time getting new business. The high renewal rate should also reduce the RRG's expenses, which boosts its bottom line.