Page 24 - 2016 State of the Market from AmWINS
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24 | Am2W2 IN| SASmtaWteINoSf SthteatMe oafrktehte Market
INDUSTRIES
HEALTHCARE
Strong capacity, below-cost pricing, and coverage expansion
all favor healthcare professional buyers
The entrance of new capacity into the Although the larger price reductions carriers to maintain premium levels
healthcare professional liability market achieved on renewals last year are less sufficient enough to keep writing the line.
appears to show no signs of slowing prevalent, most accounts can achieve Additionally, although medical malpractice
down. The historic profitability for this line at least 5 percent decreases, with those has been profitable for several years, the
of business is attracting an increasing experiencing loss problems seeing flat coverage has experienced an uptick in
number of new markets in the space, and renewals. The one exception to the trend claim severity.
with large physician medical malpractice is long-term care facilities, where an uptick
carriers such as Medpro, TDC, Coverys in claim severity is leading markets to try to Claims concerns also arise as providers
and Proassurance entering the E&S obtain premium increases on their book. look for additional or more lucrative
healthcare space over the last few years, revenue opportunities in a post-Affordable
business has been moved from the Carriers are competing on coverage Care Act world. “We see physicians
traditional E&S healthcare carriers. as well. “Companies are offering expanding into areas they may not be
enhancements such as expanded medical familiar with – bariatric surgery, med-spas,
“There have been several new entrants directors’ liability that covers not just laser treatments. As a result, some of the
adding capacity, which has driven E&O, but also direct patient care. We’ve growth of claim frequency in those areas
pricing further downward. We’ve seen seen carriers offer higher sub-limits may be attributed to lack of provider
some underwriters writing business at for regulatory fines and penalties and experience,” says Chester.
rates below the loss costs. If anything, include some level of cyber coverage
the market is even more competitive in automatically,” Chester reports. Retail agents and brokers benefit from
2016 than last year, making things more partnering with a wholesale broker with
challenging, especially for markets that Cyber liability also remains a key concern, experience and expertise in the healthcare
have been around for a while,” says with healthcare accounting for the largest sector. “We are specialists whose goal
Philip Chester, senior vice president and percentage of data breaches across all is to align with insurance carriers that
professional lines broker at AmWINS industries. Nearly 90 percent of healthcare provide the right resources,” says Chester.
Brokerage in Farmington, Connecticut. organizations have experienced breaches “Our healthcare practice is committed
in the past two years, as reported in a to solving problems and connecting
New entrants in the healthcare E&S recent Ponemon Institute study. agents and brokers with markets that
marketplace include Vela, Crum & Foster, have the infrastructure and expertise to
and Hallmark. Traditional P&C carriers At the same time competition for accounts provide viable solutions in a cost effective
that have historically shied away from is increasing, the buyer pool is shrinking program.”
healthcare professional liability have due to the ongoing trend of mergers and
entered the sector as well, including acquisitions among healthcare providers.
Liberty Mutual, and even specialized P&C This combination raises concerns about
carriers such as AmTrust have begun the long-term profitability of the healthcare
writing healthcare professional liability. liability sector as well as the ability of
