Based on available results for medical professional liability (MPL) specialty writers during the first half of 2011, it appears that recent trends will persist. Premium volume continues to drift downward, and coverage-year combined ratios continue to creep upward as softer rate levels impact underwriting results. Further, lower bond yields are reflected in lower investment income. It appears as though investment income will continue to decline as recent Treasury yields have reached new lows. Nonetheless, favorable reserve development persists, supporting strong calendar-year results.
Based on data compiled by National Underwriter Insurance Data Services from Highline Data, we examined the collective financial results of a group of insurers specializing in MPL coverage with direct written premium amounting to almost $4.4 billion in 2010. Specifically, we considered the historical relationship between first-half and full-year financial results together with our view of current market trends to project what the year-to-date 2011 results might imply about the market.
This article was first published in Medical Liability Monitor.