Medical professional liability insurers have been performing well for the past several years, but the industry's profitability will likely deteriorate over the next three years, according to a new study by Conning, an investment management company for the global insurance industry.
“For the past several years, medical liability insurers have posted historically strong underwriting profits and combined ratios well below 100 percent,” said Stephan Christiansen, managing director at Conning. “While they are still writing profitable business today, we now forecast deterioration in profitability over the next three years, due primarily to four emerging threats. Insurers face issues with declining investment returns, changes in regulatory and judicial environments, movement of doctors out of private practice, and market cycle changes.”
The Conning study, “Medical Professional Liability: Looming Threats to Solid Performance” reviews the market and structural issues that pose a threat to medical professional liability insurer performance, and explores the strategies of specialists, multiline insurers, and risk retention groups in the market.
“As we researched the market forces it became clear that the combined effect of these issues would begin to reverse much of the positive changes seen in medical professional liability in past years,” said Steve Webersen, director of research at Conning. “Some scenarios considered in our analysis could bring the sector past the point of deteriorating profitability and into another period of net losses in the next three to four years. Companies will need to rethink their strategies and operations to anticipate these changing conditions.”
Learn more: www.conningresearch.com.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].