Rate predictions
Trend | Range | |
---|---|---|
Entity medical malpractice | ![]() |
Flat to +10% |
Physicians medical malpractice | ![]() |
–7% to flat |
Managed care errors & omissions | ![]() |
Flat to +10% |
Key takeaway
The health care professional liability market is in transition. Despite substantial carrier merger and acquisition activity, capacity remains widely available, yet increasing severity is manifesting in sharpened focus on underwriting rigor and rate adequacy. Buyers should be prepared for more protracted and detailed negotiations requiring forward planning and longer timelines.
The health care industry landscape is continuously shifting.
- Increasing M&A activity, bankruptcies and (rural) closures create a shrinking pool of potential insureds and premium in the marketplace.
- Substantial regulatory uncertainty due to a fluid political landscape (What will happen with Stark laws?) will continue into 2019.
- Financial pressure: Decreasing reimbursement alongside increasing costs are leading some facilities to seek ways to expand their revenue streams.
The sector faces new, emerging and accelerating risks.
- The opioid crisis is a key focus of carriers. To quantify exposures, carriers are asking ever more detailed questions on opioid management and control programs; MCE&O exposures are increasingly faced with exclusionary language.
- The proliferation of eHealth tools and solutions is changing health care delivery and creating new areas of liability and regulatory scrutiny.
- Sexual abuse cases are increasing; the result of intensified focus arising from #MeToo and shifting cultural attitudes.
Increasing severity is putting pressure on carrier loss ratios and thus rate.
- Increasing severity trends, particularly in specialty areas, are putting upward pressure on rates and terms and conditions. These trends have created pricing distress in venues historically considered more favorable and within a few specialty segments of the market (e.g., correctional care risks are seeing increases of 10+ %).
- Some carriers are at an inflection point and are refining their geographic underwriting strategy and withdrawing from some segments. Yet capacity is still widely available and even growing, as evidenced by new entrants in the London marketplace.
- Expect terms and conditions to come under greater scrutiny from carriers in high focus areas: opioids, sexual abuse, cyber, etc.
Related content tags, list of links
Survey Report
Financial, Executive and Professional Risks (FINEX)
Healthcare