Medical professional liability insurers have enjoyed historically strong underwriting levels and combined ratios under 100 for several years, but the good times may be coming to an end as several factors are conspiring to chip away at profits over the next three years, according to a new report.
In its latest report, “Medical Professional Liability: Looming Threats to Solid Performance,” Conning Research & Consulting says the regulatory and judicial environment, declining prices due to the market cycle, continued low investment returns and the movement of physicians from private practice into large hospitals — many of which self-insure — will challenge profitability in this line going forward.
“We see a picture of declining profitability, which we believe will lead to returns on capital falling below the average for the overall industry by 2015,” the report says.
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