| Trend | Range | |
|---|---|---|
| Entity medical malpractice |  |
+3% to +15% |
| Loss-affected accounts | Highly variable rate increases | |
| Managed care errors & omissions | ||
| Blue plans | |
+10% to +30% |
| All others |  |
Flat to +5% |
| Physicians medical malpractice | |
+3% to +10% |
| Loss-affected accounts | Highly variable rate increases | |
Key takeaway
The health care professional liability market is experiencing continued hardening, as carriers seek to return to profitability through rate increases, underwriting discipline, controlled capacity deployment and other de-risking strategies. Given the increased underwriting rigor, presenting high-quality submission data is critical.
Insurers are seeking a pathway to profitability.
- Profitability is front and center for carriers due to medical malpractice combined ratios that have been in excess of 100% from 2015 through 2018 and increasing loss severity. Increased loss severity is occurring in single-plaintiff cases, as well as in batch cases. Insurers are also concerned about potentially catastrophic losses from systemic exposures. These dynamics put continuing pressure on rate, terms and conditions and available capacity.
- Underwriters are inundated with submissions, but are focused on profitability, not top line growth. This means that submission differentiation through quality data is paramount. Clean data in an easily navigable format allows underwriters to differentiate risks and price their products accordingly.
- Many are grappling with the question: Is the departure of a significant reinsurer from the medical malpractice space in Q3 2019 a harbinger of more market withdrawals?
- One of the most challenging health care segments is managed care E&O. Markets are retracting terms and conditions asking for higher retentions and seeking increased rate.
Insurers are focusing on systemic risk.
- There are several systemic risks (i.e., risks that span an entire industry, not just one organization) currently plaguing the health care industry: opioids, sexual abuse and molestation, and technology. Technology issues include cyber breach risk, implementation risk and risks resulting from lagging regulatory guidance, as the regulators struggle to keep up with technology changes in the space.
- Insurers are paying increased attention to these systemic risks as they consider their entire portfolio of health care accounts. They are rigorously underwriting these exposures through detailed requests for exposure and loss data, risk management procedures and litigation management strategies.
- Medical malpractice markets are limiting their exposure to systemic risk through the application of limiting and/or clarifying language, sublimits and potentially outright exclusions on their forms.
