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Malpractice Insurance EXPERT ADVICE

State of the Medical Malpractice Insurance Market

in Florida, 2018

Back in early 2018 I wrote about our alerting their competitors of their pricing this market on average had over an 11%
deteriorating Florida malpractice insur- strategies in this transition time from soft direct loss of their surplus in 2016! They
ance market conditions in these terms: to hard market conditions. are almost literally throwing their money BY MATT GRACEY
“The edges are cracking but the core Shortly we will receive the state of at the losses to try to stem the bleeding,
remains firm and determined.” I now Florida’s independent study of the mal- but how long can they or will they keep
would say even in these last nine months practice insurance market that is that up? from a soft to hard market in the early
true signs of the hardening market are released every year in October by State of 3. In 2016 there were 3,173 claims 2000s MagMutual raised its rates 86% in
becoming more commonplace and wide- Florida’s Office of Insurance Regulation. closed with payments, up 14.7% from one year on most of its radiologists
ly talked about and accepted by experts Here are some highlights to remind you the 2,766 closed with payments in 2015. insured in Florida, along with stiff rate
in this sector. In our notoriously cyclical of the already deteriorating conditions 4. For claims that were closed with increases on almost all of its other
professional liability insurance market in highlighted in last year’s report. payments, on average over $1.149 mil- insured doctors. With its loss ratio this
Florida our favorable soft market condi- 1. The very important measure called lion was paid to each patient plaintiffs, high many are speculating that they and
tions lasted longer than any other period, the “combined ratio” of all of the top 20 for legal fees, and court costs. But here is other insurers with high loss ratios will
but now have come to an end. With an insurers of healthcare providers and doc- the staggering trend: that payment be forced to raise rates dramatically again
increasing number of plaintiff claims tors in Florida worsened from 101% in amount in 2016 was an increase of 31% in the near future, or settle for losing lots
against Florida doctors, with new 2015 to 104.7% in 2016, representing from 2015, and the 2015 amount was of money each year in Florida insuring
lawyers moving into the specialized field only the second loss for insurers in the 34% higher than in 2014!!! These mar- doctors, which most insurers cannot or
of suing doctors, and a sharp increase in last 13 years. If we break out just physi- ket cracks are deep and wide! will not tolerate.
large excess limits verdicts against doc- cians and surgeons from facilities, then 5. There are some rather-startling
tors, we are seeing continued serious the insurers’ losses are even worse, at combined loss ratios of some of the pop- Matt Gracey, medical malpractice
financial losses for a number of the pop- 121%, which means for every hundred ular insurers of Florida doctors. insurance specialist with Danna-Gracey,
ular insurers of our state’s physicians and dollars paid in premium the insurers lost Remember, a 100% combined ratio is can be reached at (800) 966-2120 or
surgeons. $21. It is hard to make this up on quan- breakeven for an insurer before invest- matt@dannagracey.com.
Most insurers are now either filing for tity! (This does not factor in the insurers’ ment returns:
rate increases or raising rates by not investment returns, which help, but in MagMutual: #2 insurer of doctors in
allowing certain discounts on their poli- this low-interest-rate time their mandat- Florida, with a 16% market share -
cies, actions which do not require gov- ed conservative investments will not 130.6% combined ratio!
ernment approval as official rate changes come close to handling such a high com- So MagMutual was losing $30.60 dol-
do. These silent rate increases also help bined loss ratio.) lars for every $100 collected in premi-
insurers effectively raise rates without 2. The top 20 insurers in Florida in ums per this study. In the last transition

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‡‰‘–‹ƒ–‹‰ ™‹–Š ‰‡‡”ƒŽ ‘–”ƒ –‘”• –‘ †‡•‹‰‹‰ ƒ ‡ƥ ‹‡– ƪ‘‘” ’Žƒ ˆ‘” ’ƒ–‹‡– ƪ‘™Ǥ Luckily, you don’t have to do it all yourself.

ƒ—ˆƒ ‘••‹ Š‡Ž’• Š‡ƒŽ–Š ƒ”‡ ‘”‰ƒ‹œƒ–‹‘• Ƥ† ‘’’‘”–—‹–› ‹ –‘†ƒ›ǯ• ŠƒŽŽ‡‰‡•Ǥ

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South Florida Hospital News southfloridahospitalnews.com October 2018 9