Med mal insurance sector could consolidate
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Berkshire Hathaway Inc.’s acquisition of Medical Liability Mutual Insurance Co., which was announced Monday, is likely to be followed by additional consolidation among medical professional liability insurers, says Fitch Ratings Inc.
Berkshire Hathaway announced Monday that its National Indemnity Co. unit would acquire the largest New York underwriter of medical professional liability insurance following completion of its conversion to a stock company from a mutual company.
“Fitch believes the (medical professional liability) sector, which includes a large number of undiversified specialty underwriters, is likely to see further acquisition-related consolidation in the next few years,” the New York-based rating agency said in a commentary issued Tuesday.
“Following a decade of highly favorable profitability and strong capital formation, many MPLI specialists with strong capital positions have limited opportunities for future capital deployment as the broader MPLI market is faced with declining premium volume, increasing price competition and deteriorating underwriting performance,” said Fitch.
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