What’s a reciprocal insurance company?

A reciprocal insurance company (or “exchange”) is one way to structure an insurance carrier. (Stock insurance and mutual insurance companies are the other types.) In the reciprocal setup, the carrier is owned by policyholders but managed by a separate entity called an “attorney-in-fact” or AIF. The attorney-in-fact runs the day-to-day operations of the carrier, such as issuing policies and handling claims.

A brief history of reciprocal insurance companies

The whole idea behind a reciprocal insurance exchange is to allow policyholders to spread risk around. Reciprocals began in 1881 when dry good merchants in New York finally got fed up with overpaying to insure their buildings. They decided to pool their money together and self-insure each other instead.

Is Kin a reciprocal insurance company?

Kin offers policies through two reciprocal insurance companies: 

• Kin Interinsurance Network 

• Kin Interinsurance Nexus Exchange. 

That means when you buy a policy from either of those carriers, you own part of the reciprocal company – and their interests are fully aligned with policyholders (subscribers).

Reciprocal insurance carriers are customer-centric by design

Customers are the very heartbeat of a reciprocal insurance company – without subscribers, it literally would not exist. In addition to owning part of the company (through the purchase of a policy), customers may also receive distributions of excess profits or surplus growth if claims are lower than expected.

As reciprocal exchanges, Kin Interinsurance Network and Kin Interinsurance Nexus Exchange aren’t incentivized to raise prices to increase profits, which helps keep homeowners insurance costs low for customers.