Medical malpractice insurance market expected to soften
side note: Wow! I found this to be a surprise. Even with the investment sector still moving in relative chaos, the highly respected Standard & Poor’s Rating Service is forecasting a continued soft market for medical liability insurance. What does this do to the argument that medical malpractice insurance rates are climbing unchecked through the roof?
The medical malpractice insurance market appears likely to soften more, as insurers continue to battle what one ratings service calls “significant challenges.”
Standard & Poor’s Ratings Service is forecasting that the market will continue to soften as prices declined at a more moderate pace.
The ratings service notes that medical malpractice insurance writers apparently achieved better operating results in 2008 and through the first nine months of 2009 than it had forecast two years ago because of
larger-than-expected favorable reserve development.
“Even without the ups and downs of the pricing cycle, medical malpractice insurers face significant challenges, including volatile losses, the long-tail nature of the reserves and exposures, and the potential for adverse legal verdicts,” Standard & Poor’s said in a statement. “We have only seen a handful of insurers sustain profitability throughout pricing cycles, and they have generally been the larger, more diversified insurers in a highly fragmented industry.”