Increases in medical professional liability are expected to increase further this year as unfavorable profitability trends for insurance companies remain, according to a report by A.M. Best Co. Inc.
Insurers also face significant insecurity responsibilities related to COVID-19, Best said in the report published Wednesday.
Capacity constraints in the most challenging sectors, including hospitals and nursing homes, have led to significant interest rate hikes. , said Oldwick, New Jersey-based credit rating agency.
But sectors of surgery are still "quite competitive", says Best.
Many MPL insurance companies adjusted their pricing over the past year after a decade. of soft market conditions, cost of inflation with losses, declining reserve layoffs and the long-term environment with low interest rates, said Best.
Increases in MPL insurance premiums exacerbate the financial strain on medical practices, making it difficult for some physicians to remain in practice, according to the report.
As the pandemic reduced office visits and elective procedures, some physicians were forced to close their practices, Best said id.
Despite a slight improvement in net income in 2020, US MPL insurance companies saw their sixth year in a row of insurance losses. from 201
Direct premiums for MPL composite increased by 1.1% in 2020 to USD 7.9 billion, after increasing by 4.3% in 2019 and by 2.6% in 2018. This growth followed a long period of soft market conditions and changed industry dynamics that dampened product demand, said Best.
Although the rate of loss decreased significantly in 2020 as non-essential procedures were either delayed or not performed due to the pandemic, it is likely to be short. -Lived, said Best.
Many states have introduced immunity rules to protect caregivers from pandemic-related liability, but these laws are untested in court.  Proposed federal legislation protecting healthcare professionals from COVID-19 liability was introduced by lawmakers late last week.
The rising cost of medical malpractice is likely to ensure an increased use of alternative risk transfer vehicles, such as prisoners and risk management groups in the short term, Best said.
The MPL risk groups still generate the largest amount of direct premium income for direct premiums, $ 1.95 billion, 46% more than the $ 1.33 billion generated by the risk groups focusing on other responsibilities (see chart) . Catalog