Another Year of Malpractice Insurance Premium Reductions

From Massachusetts to Northern California, From National Insurers, The Doctors Company to Pro Mutual, Insurers are declaring large dividends again this year.  As the market rolls along into its seventh year of favorable loss development, companies are able to return funds allocated for forecasted losses, claims are lower than budgeted, which allows for the company to return funds in the following year. 

Specifically, the company that our agency represents, The Doctors Company, will hand out a 21 Million dividend to its members in premium credits and cash disbursements.  Plastic Surgeons, Internal Medicine, Hospitalists, and other nationally endorsed specialists in every state as well as the core TDC states of Colorado, Florida, Georgia, Idaho, Maryland, Montana and Ohio are all declare large percentage dividends for the physician policyholders.  

MAG Mutual, Medical Mutual of Maine, and other physician owned carriers are bringing that benefit to their physicians as well.  Agency's and specialty societies, Dedicated risk managers, sophisticated administrators and effective leadership of medical groups all has resulted in this significant drop in premium, directly because of fewer and lower claims.  

The market continues to be soft for physicians.  Many top competitors are working to pass out credits, complementary coverages and pay retiring doctors dividend payments in cash.  The Doctors Company will lower rates by 10% overall in the state, with deeper discounts applying to the physicians who have earned the credits through clean loss records.  Ironically,  this latest round of rate decreases comes at a time when the cost per claim and settlement is rising.  Although the number of claims is lower nationally, the attorneys still need to pay their lead defense counsel and expert witnesses and the cost of discovery is higher than it has been in recent years. The rate reductions will cause the earnings ratios to lower, cutting margins and, ultimately and soon result in a need for companies to take rates back up. 

In Arizona, MICA takes rates down again, resulting in a 38% rate reduction since 2007, West Virginia malpractice Insurers are also lowering.  
Right now, during this one year of renewals at least, call your direct, low cost representative to ensure your group is represented to each specialty insurer.  Brokerage works better in markets not so highly specialized.  The Doctors Insurance Agency works tirelessly to develop premiums which will reflect the true risk presented by your medical group.  

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