State of the FL Med Mal Market – Hard Market Now Unfolding

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By Matt Gracey

Just as the heat of summer begins and ushers in hurricane season here in Florida, unfortunately other dark clouds are forming in the market for doctors’ medical malpractice insurance. For the last twelve years malpractice premiums have steadily decreased until the last few years of flat prices. As the frequency and severity of claims against doctors has begun to rise in the last few years few insurers raised their prices because of competitive fears. Most insurers started taking money out of their claims reserves and offset the growing expenses of legal fees and claims expenses so as not to need to increase their rates. Some decreased dividends and other “behind the curtains” discretionary credits so as not to have to publically announce rate increases. All of this circumvention of straight up premium increases seems to now be behind us as in just the last month a number of companies have either announced or been approved for more significant rate increases. With most insurers of doctors in Florida now losing money on every policy they write the only question now is how much will rates increase and how quickly. My prediction is that many specialties will over the next three years will experience pricing increases of up to twenty five percent, with some even higher. In Georgia, one insurer just announced last week that rates will immediately increase up to forty five percent on one specialty and thirty six percent on another. We in Florida are no longer immune from such market changes, unfortunately.

My best advice to prepare for this hardening of the malpractice insurance marketplace is very simple. First, make sure you are insured with one of the larger, financially strong insurers as many, if not most, of the small insurers and RRGs will very likely either cease covering our doctors or get merged into the larger insurers. The last transition period from soft to hard market conditions in Florida’s malpractice insurance saw the insurers offering coverage shrink quickly from over fifty to under five insurance companies still willing to cover doctors here.

The second move to consider is to join a purchasing group to more strategically and powerfully purchase coverage with your peers. The best programs are very professionally run with top drawer insurers acting as partners not just vendors. There is power in numbers and now is the time to seek such protection.