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Member, Beacon International Group, Ltd.
Medical malpractice insurers continue to post strong results despite facing challenges such as pricing pressures, looming upheavals in health care delivery and rapid consolidation, said an A.M. Best Co. Inc. report.
The sector posted a 93.8% combined ratio for 2012, moderately deteriorating from the 89.9% combined ratio for 2011, according to the report issued Monday by Oldwick, N.J.-based Best.
“Undeniably, the medical professional liability insurance line continues to generate strong underwriting gains and has put together seven consecutive years of unprecedented operating earnings, despite weak investment conditions and what has been characterized as an unusually long soft market phenomenon,” says the report.
The report notes the sector’s underwriting and operating results outpaced the overall property/casualty sector, and insurers continued to follow conservative investment practices.
“In the aggregate, this sector continues to be flush with liquidity and has produced positive operating cash flow and steady increases in surplus year over year,” says the report.
Insurers in the segment also have benefited from ongoing reserve redundancies, lower-than-average frequency of reported claims, and a general decline in the number of claims brought to trial.