PURE
PURE is dedicated to providing property & causality insurance to successful, responsible families
We provide comprehensive coverage, including insurance for high value homes, automobiles, watercraft, excess liability, jewelry & art; and excellent service to an elite membership.
As a Florida domiciled reciprocal insurance exchange, PURE is unique because it is owned by its members (policyholders). The PURE model has significant benefits for its members:
- The policies are participating. This means members could receive dividends.
- PURE is committed to making use of Subscriber Savings Accounts (SSA) to build surplus in the company, and create value for our members.
- The policies are non-assessable (Florida Statute 629.261). A member’s liability ends with the cost of his/her policies.
- PURE is rated A- (Excellent) by A.M. Best.
- PURE Risk Management, LLC serves as the attorney-in-fact and is led by a management team recognized as leaders in the high net worth property and casualty niche.
- A Subscribers’ Advisory Committee principally made up of PURE members assures that management hears the voice of the membership.
There are many benefits to being a member of PURE. Here are just a few.
We’re highly selective. We know a great deal about insuring successful families and we use that insight to carefully select a distinguished membership. By doing so, we reduce the cost for all members.
We’re new AND we’re secure. PURE is led by a team of professionals widely recognized as the most experienced and accomplished in this niche. For all of the advantages of our experience, we benefit from our fresh start. A.M. Best has recognized our strengths with a financial strength rating of A- (Excellent).
Our coverage is designed with your input to fit your needs. Many people don’t buy enough insurance to rebuild their home or replace their contents. Others (particularly vacation homeowners) buy far more than is needed. We empower our members to buy the right amount – not more, not less.
Our policyholders are members. And the members own PURE. Stock insurance companies exist to maximize the wealth of their shareholders. Our mission is simple: Through innovative products and expert advice & service, we are committed to helping our membership lower the price of their insurance today and reduce their overall cost of risk for the long term.
We’re creating a new standard of service. We believe that the opportunity exists to exceed all expectations of our membership.
A Reciprocal Insurance Exchange is typically defined as a group of individuals, corporations or entities who, as members, agree to exchange contracts of insurance (policies) and share their insurance risks among themselves within their select group. Each member (policyholder) of a reciprocal exchange individually appoints and authorizes a common attorney-in-fact to manage the affairs of the exchange.
Two of the six largest personal automobile insurers in the United States (USAA and Farmers Insurance Group) are reciprocals.
PURE has earned a Financial Strength Rating of A- (Excellent) from A.M Best.
From the press release issued by A.M. Best on August 6, 2008:
“A.M. Best Co. has assigned a financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-” to The PURE Group of Insurance Companies (PURE) and its members: Privilege Underwriters Reciprocal Exchange and PURE Insurance Company. All companies are domiciled in Fort Lauderdale, FL. The outlook for the ratings is stable.
The ratings reflect PURE’s solid risk-adjusted capitalization, moderate operating leverage measures currently maintained and anticipated in its business plan, prudent reinsurance programs and management’s previous successful history in the niche of high net worth personal lines clients. The ratings also contemplate the additional financial flexibility afforded PURE through its parent company with multiple investor sources, as well as the growing positive impact of surplus contributions from PURE subscribers…”
At the end of each year, after accounting for all losses and all expenses, PURE deposits the remaining premium (if any) paid by members into Subscriber Savings Accounts held in the name of each active member.
These deposits are returned to Members if and when they are no longer insured by PURE. Until that time, these funds can be used as surplus to pay losses and help PURE build its financial strength.
The key advantage for PURE and its members is that PURE does not have to pay tax on the “savings” deposited into these accounts; so the balance available as surplus can build much more rapidly than retained earnings in a typical insurance company. Provided members paid their premiums with “after-tax” dollars, there should never be a taxable event for a member either.*
As a point of reference, United Services Automobile Association (USAA) reported that approximately $6 Billion (or more than half of USAA’s surplus) was held in Subscriber Savings Accounts at year-end 2005.
* PURE does not provide tax advice. Please consult your tax professional with any questions.
Surplus is the capital that insurance companies keep on hand to pay losses that may arise from unforeseen events. Most successful stock insurance companies build surplus through the retention of after-tax profits – driven in large part by the premiums paid by policyholders. Most new insurance companies are funded by, and managed for the profit of, outside investors.
PURE aims to keep its insurance premiums low. Accordingly, PURE members are required to make an annual surplus contribution in each of their first five years of membership. Surplus contributions are equal to 10% of their annual High Value Homeowners and Personal Watercraft premium and 4% of annual premium for all other lines of business.
While members should have no expectation of its return, surplus contributions enable PURE members to benefit over time through a combination of lower premiums, future dividends and deposits into Subscribers Savings Accounts.
This material is descriptive only. The precise coverage offered is subject to the terms and conditions of the policies issued.
