The Doctors Insurance Agency is a national healthcare liability brokerage. We are immersed in the interstate Medical Professional Liability Insurance markets. Accordingly, we spend much of our time reading about issues in these markets, meeting with carrier executives, and interacting with the various state's and product underwriters. We understand the issues and help clients obtain policies and premium discounts the general insurance brokers can't and don't.
Between 2009 and 2020 we experienced the longest soft market cycle in the history of the medical liability insurance industry. Now, the hardening market is resulting in carriers simultaneously removing discount programs, declining and restricting applications, and increasing base premiums. The alarms warning of this have been sounding since August of 2019. These alarms presented in the form of articles, conferences, webinars and company announcements. Then in March of 2020 (concurrent with the pandemic shut down orders), the capital which had been funding reserves, holding down premium renewals and reducing prices for 10 years had come to an abrupt stop.
Clients have surprised and disappointed at the renewals (and angry at their brokers and carriers).
They are certain there’s another carrier eager and waiting to take their business at a lower rate, if only asked.
- There are still supported incredible practice profile and risk management discounts.
- There are premiums that can reflect good claims history.
- There are still earned credits and program discounts available.
- There are reasonable renewals, competitive carriers, and smart specialty insurance brokers out there.
The Doctors Insurance Agency strives to be that representative and to find those programs for our clients.
The reality of lowering claims frequency and reliable average payouts have stopped. Insurance carriers have had to adjust rates to support the necessary reserves. Insurance carriers have needed to pump up those reserves to fit within the standards of third-party financial analysts.
Claims continue to tick upward, and the average cost of defense and indemnification has increased by an average of 4% to 6% for eight years now.
Those are unavoidable pressures on premiums. Artificially holding them down by spending reserves and banking on low claims expense is not a plan for future growth and stability in the medical professional liability insurance market.
The reality is that the markets have shifted:
- Capital markets are retreating.
- The COVID-19 pandemic has created an unprecedented level of uncertainty about claims presenting.
- Overall claims are up.
All of this is affected by changes in the market.
The devastation of COVID on the health care system is only now beginning to manifest. Increased loss expenses, higher average claim settlements and larger case reserves will affect premiums within the medical liability industry.
Decreasing capital, COVID uncertainty and imminent payouts, and the need for additional doctors to meet emergent, testing and preventive medical service during the pandemic have all acted to change the medical malpractice market.
Also driving up the costs is the expanding healthcare industry:
- More primary care providers
- Chronic care management
- Midlevel owned clinics
- More midlevel professionals collaborating with medical doctors
- Explosive growth in wellness integrative medicine
- IV Therapy
- Health tech solutions mean uncertainty and careful underwriting
As the medical professional liability industry works hard to maintain its leadership position as an integral part of supporting access to healthcare in the United States. The medical professional liability insurance industry will be there to support healthcare professionals through sustainable premiums, healthy reserves and strong financial ratings.