Current Issues In Medical Malpractice Insurance - PowerPoint PPT Presentation

Loading...

PPT – Current Issues In Medical Malpractice Insurance PowerPoint presentation | free to download - id: 43872-MDM5Z



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Current Issues In Medical Malpractice Insurance

Description:

... Medical Malpractice Insurance. Carolyn L. Greene ... Current Issues in Medical Malpractice Insurance ... Everyone is a lead with their own list of 'pet' issues ... – PowerPoint PPT presentation

Number of Views:107
Avg rating:3.0/5.0
Slides: 35
Provided by: joanns
Learn more at: http://www.casact.org
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Current Issues In Medical Malpractice Insurance


1
  • Current Issues In Medical Malpractice Insurance

Carolyn L. Greene - Willis Re Inc. John H. Mize -
Tillinghast
April 2002
This document was designed for discussion
purposes only and is not intended to present
detailed information on our analysis and
findings. It is incomplete, and not intended to
be used, without the accompanying oral
presentation and discussion.
S\People\Mizej\Presentations\CAS Mtg 04152002.ppt
2
Current Issues in Medical Malpractice Insurance
  • Overview
  • Financial Results
  • Underlying Trends
  • Primary Marketplace
  • Reinsurance Marketplace
  • Input on Renewals
  • Opportunities for Actuaries

2
3
Financial Results
4
Current Issues in Medical Malpractice Insurance
Source Bests Aggregates and Averages
4
5
Current Issues in Medical Malpractice Insurance
Source Bests Aggregates and Averages
5
6
Current Issues in Medical Malpractice Insurance
Source Bests Aggregates and Averages
6
7
Current Issues in Medical Malpractice Insurance
Source Bests Aggregates and Averages
7
8
Current Issues in Medical Malpractice Insurance
Source Bests Aggregates and Averages
8
9
Current Issues in Medical Malpractice Insurance
Source Bests Aggregates and Averages
9
10
Current Issues in Medical Malpractice Insurance
Source Bests Aggregates and Averages
10
11
Underlying Trends
12
Current Issues in Medical Malpractice Insurance
12
13
Current Issues in Medical Malpractice Insurance
U.S. Median Medical Liability Awards and
Settlements
800
700
600
in Thousands
Settlements
500
Awards
400
300
200
1993
1994
1995
1996
1997
1998
1999
Source Jury Verdict Research
14
Current Issues in Medical Malpractice Insurance
Claim Frequency per 100 Physicians
20.00
18.00
16.5
16.0
15.6
15.5
15.2
15.1
16.00
14.3
14.2
13.8
13.4
14.00
12.00
10.00
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
Source St. Paul Physicians Surgeons 2000
Year-End Update
15
Current Issues in Medical Malpractice Insurance
  • Observations Trends
  • Frequency relatively flat - but more concentrated
    mix?
  • 1 million limits severity trend 5 to 8
  • Higher trends for long-term care
  • Greater frequency of shock losses

16
Primary Marketplace
17
Current Issues in Medical Malpractice Insurance
  • Market Drivers
  • Poor financial performance
  • Physicians - price competition/use of reserve
    redundancies
  • Hospitals - pricing discipline/aggregate
    maintenance
  • Investment yields
  • Loss of capacity
  • St. Paul leaves marketplace
  • PHICO, Frontier, PIE, etc. - Gone
  • MIIX financial troubles
  • More to come?

18
St. Paul Major Markets
State Share Position
SC 50.4 1 AR 50.0 1 NE 47.4 1 SD 42.2 1 ND 39.
9 1 NV 39.5 1 IA 32.9 1 MN 38.8 2 WV 30.7 2 L
A 27.0 2 DC 26.7 2 DE 26.4 2 NC 24.6 2 KS 22.9
2 GA 20.8 2 Average 34.7 Source CCS
19
Current Issues in Medical Malpractice Insurance
  • Market Drivers
  • Poor financial performance
  • Physicians - price competition/use of reserve
    redundancies
  • Hospitals - pricing discipline/aggregate
    maintenance
  • Investment yields
  • Loss of capacity
  • St. Paul leaves marketplace
  • PHICO, Frontier, PIE, etc. - Gone
  • MIIX financial troubles
  • More to come?

20
Current Issues in Medical Malpractice Insurance
  • Current Status of Medical Malpractice Market -
    Primary
  • Physicians
  • Premiums almost uniformly on the up-swing
  • Driven by losses, investment income, elimination
    of balance sheet conservatism, and reinsurance
    costs
  • 15 or larger increases in filed rates common
  • Reduction in discounts - material but tough to
    quantify
  • Issue is affordability more than availability
  • Hospitals
  • At last - excess insurers listen to actuaries!
  • Focus on specific and aggregate attachments
  • Large premium increases combined with retention
    increases

21
Current Issues in Medical Malpractice Insurance
  • Current Status of Medical Malpractice Market -
    Primary
  • Long term care
  • General deterioration in loss experience - with a
    few very bad jurisdictions
  • Historically large rating credits
  • Heavy underwriting, large premium increases and
    new/higher retentions
  • For-profit vs. Not-for-profit
  • Some opportunistic pricing?
  • Flight to alternative markets

22
Reinsurance Market
23
Current Issues in Medical Malpractice Insurance
  • General Reinsurance Overall
  • Results no better than primary market
  • Top twenty reinsurers, 2000 combined ratio 114.2
    versus 113.8 for 1999
  • U.S. reinsurers reported a 141.6 combined ratio
    for 2001
  • Enough is enough adequate pricing or let
    business go

24
Current Issues in Medical Malpractice Insurance
  • Domestic Reinsurers
  • Twelve Months Ended December 31, 2000

9/30/2001Combined Ratio
1999 2000 Combined Combined Ratio Ratio
American Re-Insurance Company 115.3 117.1 136.1
Converium Reinsurance (NA) Inc. 107.6 116.7 11
1.8 Employers Reinsurance Group 116.2 117.0 132
.0 Everest Reinsurance Company 103.3 103.2 115.
6 NAC Re (XL Re) 146.5 173.3 117.3 Odyssey
America Reinsurance Corporation 129.8 104.8 113.
7 Swiss Re American Corporation 109.5 121.4 176
.3 Transatlantic Re 106.4 100.4 116.7
25
Current Issues in Medical Malpractice Insurance
  • Reinsurance Considerations
  • Field of domestic reinsurers has been reduced by
    two-thirds from a decade ago
  • 120 stand-alone companies operated, 30 remain
    with most linked to global partners
  • The five largest reinsurers control over 38 of
    the estimated 125B market
  • To compete reinsurers must have many times the
    capital formerly required, A.M. Best the price
    of reinsurers admission, driven by market
    forces, is moving toward 1B of Surplus

26
Current Issues in Medical Malpractice Insurance
  • A Sampling of Consolidations in the Reinsurance
    Arena
  • Overseas Partners Reliance Re
  • X.L. Capital NAC Re/Global Capital Re/Mid-Ocean
    Re
  • Fairfax Holdings Odyssey/TIG/Sphere Drake
  • Partner Re Winterthur/SAFR US
  • Gerling Global Constitution Re
  • Trenwick Chartwell/Lasalle Re
  • Folksamerica USF Re
  • Employers Re Kemper (GE)/Frankona Re
  • Berkshire Hathaway General Re/Cologne Re
  • Swiss Re MG/Underwriters Re
  • Munich Re American Re

27
New Equity Capital
28
Input on Renewals
29
Current Issues in Medical Malpractice Insurance
  • Renewals General
  • Lack of clarity on reinsurers position. Changed
    wordings, requests for more information,
    restructuring of programs, general uncertainty
  • Capacity available but at a price
  • Negotiations tougher and longer
  • Reinsurers taking strong position on pricing
  • Must have good information, good loss history,
    good presentation with good story
  • Back to technical trending and pricing approach
  • Everyone is a lead with their own list of pet
    issues
  • Late pricing and extended negotiations created
    bottle-necks
  • Greater consideration of alternative options by
    clients with predictable loss exposure

30
Current Issues in Medical Malpractice Insurance
  • 2002 Reinsurance Renewals Specific
  • Rate increases, depends on loss history
  • More swing plans-high minimum/maximum
  • Tighter terms across the board
  • Accelerated premium payments
  • Annual terms instead of continuous
  • Caps on liability
  • Focus on balance in layers
  • Increased use of inner aggregate and loss
    corridors

31
Current Issues in Medical Malpractice Insurance
  • 2002 Reinsurance Renewals Specific (continued)
  • Limits reduced, no free capacity
  • Premium caps
  • Reduced scope of line covered
  • Excess cessions increased ILFs
  • Reduce/remove profit sharing
  • Territorial concerns
  • Reduce ceding commission
  • Few, if any, multi-year programs
  • Increased communication between primary carrier
    and reinsurers

32
Opportunities for Actuaries
33
Current Issues in Medical Malpractice Insurance
  • Opportunities for Actuaries
  • Actuarial evaluations - now required for
    renewals
  • Hospitals
  • Large physician groups
  • Large long term care entities
  • Assistance in evaluating excess/reinsurance
    proposals
  • Captive feasibility studies
  • Actuarial evaluations
  • Financial forecasts

34
  • Current Issues In Medical Malpractice Insurance

Carolyn L. Greene - Willis Re Inc. John H. Mize -
Tillinghast
April 2002
This document was designed for discussion
purposes only and is not intended to present
detailed information on our analysis and
findings. It is incomplete, and not intended to
be used, without the accompanying oral
presentation and discussion.
S\People\Mizej\Presentations\CAS Mtg 04152002.ppt
About PowerShow.com