Profitability continues to decline from peak levels: Reserve releases fund dividends while surplus stabilizes

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By Chad C. Karls, Susan J. Forray | 21 May 2015

In 2014, surplus grew slightly, leaving the medical professional liability (MPL) industry in a financial position roughly consistent with where it’s been since the end of 2011. The release of prior-year reserves has spurred the increased capitalization and favorable operating ratios in the MPL industry of late. Additionally, the industry’s pattern of declining frequency has ended, and indemnity severity trends have remained manageable. MPL insurers continue to face declining market share due to the continued acquisition of physician practices by hospitals and healthcare systems and the preference of newly trained physicians to join these larger systems.

Reprinted from the Second Quarter 2015 issue of Inside Medical Liability, Physician Insurers Association of America. Copyright, 2015.