Medical Professional Liability Insurers Post Underwriting Loss Again


U.S. medical professional liability insurers reported an underwriting loss again last year, according to Fitch Ratings in a new report that says the results are drawing more scrutiny around reserves that are shrinking.

For the second consecutive year, the medical professional liability insurers (MPLI) market reported a statutory underwriting loss, with a 102 combined ratio in both 2016 and 2017.
Fitch said the MPLI results in the calendar year continue to benefit from the development of a significantly favorable loss reserve, which accounts for an average of 20 percent of the annual earned premiums for the last 10 years.

But according to Fitch General Manager James Auden, the backup power level is dropping. En From the most recent years of accidents, positive growth levels representing the largest proportion of all reserves have fallen significantly,, said Auden.

The market is also facing other pressures, including mergers and acquisitions and consolidation, which could create more problems over time. Birincil The consolidation of hospitals and health care practices is shifting the employer’s employment to larger groups that are more likely to use self-insurance and capital or alternative risk programs, which will reduce the demand for primary MIB coverage,. He said.

The MPLI line is a smaller product segment in the US property / accident (P / C) industry, and pricing and market performance tends to follow a different cycle than other commercial lines, as large portions of market shares are held by monoline authors. Fitch. The period of historical profit deficits is related to the cost of the MPLI claims and the cost of legal remedies.

Private insurers hold the majority of MPLI’s market share. These organizations have limited expertise and insurance facilities to distribute this capital outside the MPLI markets. M Excessive capital and writing capacity at MPLI is a major obstacle to any improvement in pricing, despite the recent deterioration in recent damages, eng said Fitch’s director Gerry Glombicki.

Fitch says that larger medical liability insurers have been encouraged to grow through merging with their smaller peers. However, in spite of the increase in K / C market acquisition activity over the last two years, there are few people who may affect the MPLI market. Nevertheless, Fitch added that many MPLI experts have limited capital incentives for incentives to seek merger partners, as they can withstand significant future challenges.

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