Insurers remain bullish on medical professional liability sector
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Despite concerns about increasing medical professional liability exposures, most insurers remain bullish on this sector of the property/casualty market.
Berkshire Hathaway Specialty Insurance Group, launched in June by Omaha, Neb.-based Berkshire Hathaway Inc., is beefing up its capabilities to focus on hospitals and integrated delivery systems, physician group practices and allied health care facilities that include dialysis centers, urgent care clinics and ambulatory surgical centers, said Peter Eastwood, president of BH Specialty.
BH Specialty also recently hired Leo Carroll as senior vice president of health care professional liability. Mr. Carroll, previously was senior vice president and head of health care professional liability at Zurich North America, has spent most of his career in this sector.
“I generally view (the health care industry) as a growing sector of the U.S. economy,” Mr. Eastwood said. “We have an opportunity to provide customers with a high-quality balance sheet to which they can transfer risk.”
Moreover, “the medical professional liability business is a profitable segment of the commercial property/casualty market even with the decline in premium. Institutions are retaining more risk. This shows it's an industry that is very invested in risk management. This is a positive sign in helping to drive positive results,” he said.
But even with insurers entering the market, the continuing decline in premium volume means the market probably has bottomed out.
“Rates have now equilibrated at the level of an appropriate combined ratio. They really can't go down any more,” said Rob Francis, chief operating officer of The Doctors Co. in Napa, Calif. “There is a possibility of a rapid increase in rates if the frequency and/or severity increase as a result of (the Patient Protection and Affordable Care Act), but it also could lead to deterioration in insurer profitability.”
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