Staying true to mission while managing risk

How HAI Group’s “Secret Sauce” drives sustainable success.

When Best upgraded HAI Group’s financial strength rating from A (Excellent) to A+ (Superior), it reflected more than solid financial performance — it acknowledged a disciplined, member-centred approach to risk management and growth. For Ed Malaspina (pictured), president & chief executive officer of HAI Group, maintaining and improving those metrics over the next three to five years will demand a careful balance of innovation, prudence and purpose.

“Insurance,” Malaspina told Captive International , “has its own unique set of challenges.” Chief among them is the escalating impact of climate-related events. As storms grow more frequent and severe, insurers are under increasing pressure to maintain solvency while continuing to serve policyholders fairly. “Ultimately,” he explains, “the insurance company has a fiduciary responsibility to be there tomorrow — so that if something does go wrong, we can be there as that backstop.”

That responsibility requires a fine equilibrium between what HAI Group can offer, what it can tolerate, and what it needs to survive long-term. The organisation’s success thus far, Malaspina argues, lies in its ability to remain disciplined — not just in underwriting but in maintaining a long-term perspective amid short-term volatility.

A Member-Owned Mission

As a member-owned insurer serving public and affordable housing agencies across the contiguous United States, HAI Group’s identity is tightly interwoven with its policyholders’ mission. Growth, therefore, is not a simple matter of expanding market share. It must be achieved in a way that continues to prioritise the needs of members and the communities they serve.

One of the ways HAI Group achieves this alignment is by ensuring its employees deeply understand the environment in which its insureds operate. “Our team of insurance people will actually go get the same designations and certifications that the employees of our insureds hold,” Malaspina explained. For example, staff members pursue the Public Housing Manager certification — a widely recognized designation in the public housing industry— to gain firsthand insight into the operational and regulatory realities faced by housing agencies.

This shared knowledge base helps HAI Group tailor its services more precisely to member needs. Moreover, the organisation’s governance structure — with strong input from a board and several committees composed of employees from member housing agencies — ensures that emerging issues within the housing sector directly shape strategic planning. “They provide information on what the future looks like, what the funding sources are, and some of the challenges they’ll have,” Malaspina noted. “It’s important for us to use that as a building block for the future.”

Innovating in Risk Control

HAI Group was founded on the principle of risk control, and that philosophy continues to guide its evolution. When public housing authorities struggled to find affordable cover decades ago, HAI Group helped transform the market by promoting stronger risk management practices — regular inspections, property upgrades, and preventative maintenance.

Today, that ethos persists through a range of innovative programmes. One example is the Loss Prevention Fund, which provides reimbursement grants to insureds for safety and risk-mitigation projects such as improved lighting, repaired walkways, or enhanced security systems. “While it’s not enough money to fund everyone,” Malaspina conceded, “it is a programme that we offer to make a tangible difference.”

Another unique initiative involves upgrading roof shingles for policyholders who suffer property damage. “If you have roof damage,” he says, “we’ll replace your standard roof shingles with high-impact shingles at no extra cost.” It’s a win-win approach: members receive a stronger, longer-lasting roof, and HAI Group reduces the likelihood of future claims. “You probably won’t see that in most insurance companies,” he adds. “In this case, we both win.”

The Power of Research and Data

Research plays a crucial role in HAI Group’s strategy, not only to inform underwriting but to challenge misconceptions. “Stereotypes in certain industries can be very difficult to overcome,” Malaspina explained. Affordable housing properties are sometimes mischaracterised by potential business partners or reinsurers, and robust data is essential to correct that narrative.

HAI Group’s research arm, the Public and Affordable Housing Research Corporation (PAHRC), is a nonprofit organization that partners closely with housing-focused groups across the country to produce and collaborate on innovative research.

“From a research perspective, it’s important to show what our properties really look like and how they perform,” he continues. This data also helps legislators and the general public better understand the industry. HAI Group’s advocacy is not overtly political; rather, it focuses on education and communication, leveraging research to promote informed decision-making.

Controlled Growth: The “Secret Sauce”

Asked about the organisation’s “secret sauce,” Malaspina told Captive International that this lies in knowing when not to grow too fast. “We often zig when people zag,” he explains. “When we look at new business opportunities, we decline probably 85% of them. Most companies would take a lot of new business, but we believe controlled, stable growth is one of our keys to success.”

That selectivity translates into impressive loyalty and financial stability. HAI Group boasts a 98% policy retention rate — a figure that speaks volumes about member satisfaction and trust. The company writes roughly $300 million in premiums annually, yet operates with a lean team of just 180 employees. “We do it very efficiently,” Malaspina said. “That’s part of our secret sauce.”

Looking Ahead

For HAI Group, maintaining its A+ (Superior) rating will depend not on radical reinvention but on steadfast adherence to its principles: prudent risk management, disciplined growth, and a deep commitment to its member community. In an era of increasing climate uncertainty and shifting housing policy, that combination of stability and empathy may be more valuable than ever.

“Ultimately,” Malaspina concludes, “it’s about being there tomorrow — for our members, for their residents, and for the communities we all serve.”

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