Former National Risk Retention Association Board Chair Sanford D. Elsass calls sponsorship money “mother’s milk.” Given its mission and the industry’s small size, NRRA needs sponsorship to survive and thrive.
And thrive it has.
Generous donations by its many sponsors allows NRRA to be at the center of all things RRG. NRRA stands as the first line of defense against any encroachment on the ability of RRGs to succeed under the Liability Risk Retention Act.
In NRRA’s first Sponsor Spotlight, we talked with Joe Petrelli of Demotech, a NRRA Silver Sponsor that provides the insurance industry with Financial Stability Ratings®.
“Demotech dares to be different,” Petrelli says. “We don’t mind smaller companies and we definitely like specialists. That’s why we have a good relationship with the National Risk Retention Association. Rating a risk retention group doesn’t bother us. We like specialists that concentrate on one line of business or concentrate on a particular state. It doesn’t bother us at all.”
What Demotech Does
“Demotech is a niche financial analysis provider,” Petrelli says. “We were incorporated in 1985 and started doing insurance company ratings in 1999 because the legacy rating agencies would not review and rate independent, regional, and specialty insurers. The Demotech Difference is that we are inclined to move when the legacy raters may not do so. We rate small niches that are small by count and are relatively small insurers.
“We like to think we serve the industry,” Petrelli says. “We review and rate 420 risk-bearing entities. We did a study and, of the 400 companies that each of us review and rate, we have about 250 that are uniquely rated by us rather than A.M. Best.
“We have 18 full-time staff plus part-time staff,” Petrelli says. “We have one PhD, two MBAs, and many other qualified people. Our people were brought up in the insurance business. Our average employee has been with us for 20 years, there’s no turnover, and our analysts have over 150 years of experience between them. This is a good company.”