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The Strength of PURE's Model

Reciprocal exchange is a powerful business model, designed for the benefit of everyone involved.

When Benjamin Franklin created the first U.S.-based insurance company centuries ago, it centered on the idea of community: that neighbors—people who share similar values with one another—could pool their risks and take care of each other. Somewhere along the way, the insurance industry lost this focus.

At PURE, our compass points away from today’s shareholder-focused insurance model (and the feelings of distrust it sometimes inspires) and instead leads us toward our members—a community of smart, responsible individuals protecting the good of the group—and toward a return to Franklin’s original vision. The key to this intention is our reciprocal model.

What exactly is a reciprocal insurer?

There are a number of ways to structure an insurance company. The most commonly known are the stock and mutual models. The reciprocal model is simply another structure; and while it is lesser known, over the last decade, it has become a go-to model for new insurance companies. Its popularity has all to do with the power of this model and the alignment it creates for all entities involved.

With this structure, the insurance company is owned by its policyholders and managed by another company: a third party known as an attorney-in-fact. The attorney-in-fact runs the company’s day-to-day operations like issuing policies and handling claims, and they oversee the distribution of expenses based on the membership’s potential risks. PURE is owned by our members (policyholders) and managed by the attorney-in-fact, PURE Risk Management (PRM).

But this isn’t a new concept. It’s as old as insurance itself. And, because the entities involved aren’t trying to profit off each other, the reciprocal model often results in increased savings for policyholders.

PURE’s take on it.

PURE’s reciprocal model is designed to focus on the membership, and this incentivizes us to charge a fair price, pay exactly what is owed after a claim and deliver excellent service to members.

Instead of collecting premiums to increase profits or please outside shareholders, we invest in our members’ homes to make them more resilient and explore new technologies meant to make their lives easier. In short, our structure keeps the membership our top priority when it comes to how their premium dollars are spent.

How it benefits members.

There are many ways in which members benefit from the reciprocal structure, from unique tools designed to make members more informed and safe to money back for our most loyal members. One of the most tangible benefits of membership comes in the form of Subscriber Savings Accounts—accounts held in members’ names to which the company makes yearly allocations dependent on performance and underwriting results.

With members at the core of the model, policyholders regain the power to protect their assets and trust that their insurance works for them. Ultimately, PURE would not exist without our membership, and to prove their value, we designed our company’s whole model around them.

Glossary of Terms

Reciprocal Exchange

An insurance model that puts members first

An unincorporated association in which members (as individuals, partnerships, trustees, or corporations) exchange contracts and pay premiums through an attorney-in-fact for the insurance of each other.


Third party who runs day-to-day operations

A person or entity who is authorized to act on behalf of another person or entity, usually to perform business or other official transactions. PURE Risk Management serves as PURE’s attorney-in-fact.

Subscriber Savings Accounts

A tangible benefit of membership

As part of PURE's unique membership model, PURE may allocate a portion of its total capital to members through individual accounts held in their name, also known as Subscriber Savings Accounts.

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