The Reciprocal Advantage

Reciprocals are widely recognized as one of the most effective and cost efficient methods of managing risk.

In terms of cost efficiency, the not-for-profit status of reciprocals instantly reduces overheads through government exemption from income tax. We do not pay broker or agent commissions, and profits are returned to subscribers rather than being lost to outside shareholders. To date, we have released over $73 million to subscribers.

Members also benefit from the operating principles of the reciprocal:

• Since members are part of the same industry, our ability to forecast the likelihood and cost of potential losses is more accurate, and therefore more controlled.
• Our financial stability increases with the number of members, while overhead is reduced and the opportunity to purchase reinsurance for "shock" losses improves.
• Members benefit from the shared knowledge base of the reciprocal, thus enhancing our ability to better convey and manage risk.

Additionally, Canadian reciprocals are treated like traditional insurance companies for investment and reporting purposes, providing subscribers with a common and accepted regulation and monitoring standard.

For more information, please contact us.