Medical Malpractice Insurers Continue to Generate Strong Profits

New York is one of several states that have enacted so-called “tort reform” policies aimed at lowering medical malpractice insurance premiums. Last year, New York created the taxpayer supported Medical Indemnity Fund, which limits the damages the families of children seriously injured by medical negligence at birth may receive.

A recent report may lead some to question whether such efforts to lower the cost of medical malpractice insurance are really necessary. A release from A.M. Best, a company that provides insurance ratings and information, states that the medical malpractice insurance sector continues to generate strong profits.

According to the release, “The medical professional liability insurance (MPLI) sector continues to stand out among insurance sectors for its ability to garner profits and generate returns far in excess of the composite averages of its property/casualty peers.”

The release went on to explain that last year the MPLI sector had underwriting and operating results which outpaced other insurance sectors. MPLI insurers also showed stable investment returns and consistent increases in surplus.

This information seems to indicate that the medical malpractice insurance sector is strong and highly profitable. This is contrary to claims made by some advocates for tort reform that there is a crisis; and actions need to be taken to lower medical malpractice insurance premiums in order to keep health care costs down.

In reality, tort reform efforts may only serve to deprive victims of medical malpractice of the funds they need and deserve, while further increasing the profit margins of the already highly profitable malpractice insurers.

Source: AM Best, Medical Professional Liability Outperforms, But Is This Sustainable, 2 May 2012