Medical professional liability
NICHING THE NICHE:
A REFINED FOCUS Various factors in current trends in the medical professional liability sector led to the creation of Pro-Praxis, as Bob Allen, its president, told HRMR.
“T
hey are starting their own managing general agency,” someone whispered during a recent meeting of the Professional Liability Underwriter Society (PLUS). “It’s a tough market,” another person chimed in.
It does not take long, if you are a player in medical malpractice space, to determine they are talking about Bob Allen’s recent transition from head of healthcare at Torus Insurance to becoming president of Pro- Praxis Insurance, an independent underwriting agency. Capitalized by the Cooper Gay Swett & Crawford group (CGSC), the aim is to build Pro-Praxis into an underwriting platform that employs specialization and operational excellence to assist all parties within an insurance transaction. The strategy for specialization (and current market trends) would ultimately shape why, who and where Bob Allen and Pro-Praxis focus their attention.
AM Best, Conning & Co, Standard & Poor’s, the National Association
of Insurance Commissioners (NAIC), the Physician Insurers Association of America (PIAA) and the National Practitioners Data Bank (NPDB) are major trends within the US medical professional liability (MPL) industry. Many of these organizations have concerns with this class of business.
• Net income has been gradually declining over the past few years. Investment calendar year combined ratio is approximately 86 percent, the accident year
52 | HEALTHCARE RISK MANAGEMENT REVIEW | Annual 2014
has been experiencing a shrinking premium base. However, MPL’s calendar year combined ratio has outperformed the property/casualty industry sector during the same time period.
If MPL loss and price patterns are deteriorating, why would anyone create
this year, The ART of MPL Underwriting, Pro-Praxis answers this very question. They examined broad-based industry loss ratios and compared them to the
The team found that the insurers who focused on healthcare facilities (hospitals and outpatient care facilities) outperformed the industry average.
At that time he compared the industry results to a handful of specialty this subset also outperformed the industry.
“Niching the niche, or specialization in underwriting, is how to surpass
your competitors’ results,” he says. Before joining the CGSC family, the Pro-Praxis team was approached
by several US-based carriers with plans to enter or expand MPL underwriting. At one point, there were seven markets, all with varying risk appetites, who wanted to increase their participation in the MPL market. While very few insurance companies could articulate what they wanted to underwrite, they knew they wanted market share.
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