The medical professional liability (MPL) market has sustained favorable financial results in the face of gradually declining premium and increasing combined ratios. The saving grace for the market continues to be its sizeable reserve releases, which have exceeded $1 billion in each of the last six years for the collection of MPL writers that we consider in our analysis. Through the first quarter of 2013, we are seeing a continuation of the financial trends of recent years. Our consultants project another profitable underwriting year for the composite in 2013, although profit margins will likely decline relative to recent years should the current financial trends continue. Pricing pressure continues to be fueled by increasing surplus levels and the desire to maintain exposures against increasing competition and the migration of physicians to self-insured employment settings. The largest remaining uncertainty lies in the sustainability of prior year reserve releases at the level we’ve observed in recent years.

This article was originally published in the August issue of the Medical Liability Monitor.