The medical professional liability industry is profitable despite premium increases, according to Charlottesville, Va.-based SNL Financial. That industry experienced a profitable year in underwriting, demonstrated by a combined ratio of 82.6 percent in 2009. However, the industry continued to endure declines in direct premiums written, which fell 3.7 percent to $10.8 billion, compared to $11.2 billion in 2008.
Small declines in premiums for most top writers led to little change in the top 20 rankings compared to last year. Once again, Medical Liability Mutual Insurance Co. took the top spot with $756.8 million direct premiums written, followed by Berkshire Hathaway Inc. and The Doctors Co.
One of the few movements included ProAssurance Corp. and American International Group Inc. swapping spots. AIG dropped to fifth place due to its 13.8 percent annual premium decrease. Allied World Assurance Co. Holdings Ltd. rose to the No. 17 spot with direct premiums written increasing 18 percent to $150.9 million.
Despite the decrease in premiums, the top 20 writers managed to post a combined ratio of 81.3 percent, with only three of the top 20 companies experiencing a net combined ratio greater than 100 percent.
“Favorable loss cost trends, tort reform and higher rates in prior years have led to the extraordinary results for these insurers,” said Jon Wright, director of insurance at SNL. “However, soft market conditions are also evident in premium declines and companies booking higher accident year loss reserves.”
SNL ranked the insurers based on their 2009 NAIC statutory property/casualty statement filings. SNL calculates medical professional liability direct premiums written by summing the claims made and occurrence premiums, which are as-reported lines of business in the NAIC quarterly statements. The rankings are limited to U.S. filers only.
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