Aggregate direct written premium for the composite of medical professional liability (MPL) specialty writers continues its decline from a high in 2006 of $6.8 billion to $5.1 billion in 2014, a 26% decrease. Six months into this year, this trend is continuing, with direct-written premium down 4.7% from the same period in 2014. Despite the decline in net premium, robust competition, and historically low investment yields, MPL specialty writers continue to be profitable and continue to increase surplus levels. Net income for this composite is projected to approach $1 billion in 2015. But in the face of these positive overall results, pretax calendar-year underwriting and investment income are trending downward. Milliman consultants Brad Parker and Chuck Mitchell provide some perspective in this article.
This article was originally published in the September 2015 issue of the Medical Liability Monitor.