Med mal insurance rates keep rising as insurers struggle with losses

Medical malpractice rates, which were already increasing pre-pandemic, are still hardening, although the hikes have started to moderate.

“The market has been in a state of correction for the last 24 to 36 months, and that’s the result of several years of loss ratios that were really exceeding any sort of metrics acceptable to the underwriting community,” said Martha Jacobs, Aon PLC’s Pittsburgh-based national health care practice leader.

The med mal insurers “are catching up and trying to get adequate rates,” said Chris Zuccarini, Radnor, Pennsylvania-based managing director of Risk Strategies Co. Inc.’s national health care practice, who said he is seeing rate hikes range from 5% to 25%, with hospitals and senior care facilities seeing higher rates than physicians. 

Rate hikes are “very much jurisdictional or venue driven,” so in tough legal venues, such as Cook County, Illinois, “those rate charges are a lot more substantial,” said Paula Sullivan, Chicago-based senior vice president at Marsh LLC.

There is a broad range of increases because of the number of variables involved, including hospital systems’ revenue and individual experience. “It’s not a one-size-fits-all approach,” said Jeff Holthaus, Kansas City, Missouri-based health care team leader for Lockton Cos. LLC.

“I feel that much of the market correction that we’ve seen in the past 12 months will be impactful going forward” and that rate hikes will moderate, Ms. Sullivan said.

A.M. Best Co. Inc. retains a negative outlook on the sector. While there have been positive rate changes, there are still issues of rising severity, frequency, losses and concerns about social inflation, said Sharon Marks, associate director at the Oldwick, New Jersey-based ratings agency. “None of this is going away,” she said.