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Introduction |
Prior to introducing our 2024 Healthcare Market Update, we would like to pause and reflect on our prior report. Our 2023 market update centered around market rating and underwriting appetite, the impact of nuclear verdicts and the legal system, and the array of challenges faced by our healthcare clients. While we anticipate the continuation of similar trends in 2024, we are going to introduce a unique perspective provided by those industry leaders who we partner with daily to develop strategies and solutions for Healthcare clients nationwide.
This year, we are presenting our 2024 Healthcare Market Update through the lens of our carrier executives and underwriters, individuals deeply entrenched in the day-to-day operations of placing and underwriting substantial volumes of business in the E&S marketplace across the United States. Our market update is structured around six key healthcare segments, with each segment exploring four core topics. Within the report, you will discover a compilation of insights from our underwriters, a concise summary for each segment from our perspective as wholesale brokers, and recommended best practices for the upcoming year.
We extend our gratitude to all the underwriters who participated in the survey, as their contributions have been invaluable in shaping this comprehensive update.
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From a Broker’s Perspective
In the world of medical malpractice insurance for doctors and healthcare providers, we’re seeing a soft market, just like underwriters are noticing. Standard insurance companies are holding onto doctors longer than they used to, even when it might make sense to non-renew them, and they’re offering rates that are lower and limit structures that are higher than what you’d expect in the current market. But how long can this last with the continued deteriorating legal environment? We continue to see doctors retiring and selling their practices to hospitals at a rapid pace. On the flip side, this is opening new opportunities for cash-based practices to thrive. From an Underwriter’s Perspective
Unique Underwriting Challenges
Addressing Claims Severity & Frequency
Product Differentiation & Outlook
Hot Topics & Opportunities
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From a Broker’s Perspective
Navigating the vast and complex landscape of the Allied Healthcare insurance sector presents a myriad of unique challenges that demand strategic and creative solutions as well as agile responses. From the imperative need for brokers to possess comprehensive knowledge of carrier appetites to the expertise to evaluate a multitude of structures, services and operations, each aspect requires meticulous and proactive attention. 2024 is poised for continued growth and innovation, lifted by an optimistic outlook and a focus on service excellence and product expertise, to explore and capitalize on emerging opportunities in the Allied Healthcare market. From an Underwriter’s Perspective
Unique Underwriting Challenges
Addressing Claims Severity & Frequency
Product Differentiation & Outlook
Hot Topics & Opportunities
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From a Broker’s Perspective
Some current challenges and issues in medical malpractice insurance for hospitals include:
From an Underwriter’s Perspective
Unique Underwriting Challenges
Addressing Claims Severity & Frequency
Product Differentiation & Outlook
Hot Topics & Opportunities
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From a Broker’s Perspective
This industry segment poses one of the most significant challenges in our specialization currently. Capacity cuts and appetite changes from the largest standard market carriers has created an influx of accounts into E&S marketplace that is causing havoc. The three primary issues are occurrence form triggers, rating differences, and limits. Due to these items, we have limited carrier options, new supplemental applications that have different rating exposures (# of beds instead of square footage), and oftentimes insureds are purchasing lower limits due to the substantial cost difference, sometimes up to 5x from expiring insurance program. We are seeing more E&S carriers broadening their appetite and entering the Human & Social Services segment in 2024. From an Underwriter’s Perspective
Unique Underwriting Challenges
Addressing Claims Severity & Frequency
Product Differentiation & Outlook
Hot Topics & Opportunities
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From a Broker’s Perspective
Due to an increase in the number of carriers writing senior care, needed rate increases have not been as pronounced, which has been a welcomed benefit to insureds. However, staffing shortages and the need for additional assistance across all acuity levels persist. We continue to observe losses and severity increases across all senior care classes. The legacy carriers with substantial existing business are the ones trying to push rate as much as they can, but when faced with competition on the account, they will also do whatever they can to retain it. The new carrier capacity has created a false sense of optimism as though the senior care segment is improving and becoming a soft market. However, if the new capacity does not have staying power, we can expect rates to firm up quickly and carriers will get very picky again. From an Underwriter’s Perspective
Unique Underwriting Challenges
Addressing Claims Severity & Frequency
Product Differentiation & Outlook
Hot Topics & Opportunities
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From a Broker’s Perspective
In the dynamic landscape of Digital Health insurance, 2023 was the year of transition. Prior to, the market was historically controlled by two carriers. Last year, additional markets emerged presenting a breadth of opportunity relative to appetite, policy structure, capacity, underwriting expertise, risk management, and claims services. There are a multitude of unique challenges that demand constant vigilance and adaptation from brokers specializing in this space. This introduction sets the stage for an exploration of the strategies and opportunities in 2024 to effectively pursue this unique telehealth insurance marketplace. From an Underwriter’s Perspective
Unique Underwriting Challenges
Addressing Claims Severity & Frequency
Product Differentiation & Outlook
Hot Topics & Opportunities
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As we continue the journey into 2024, it is evident the landscape of the medical malpractice insurance market remains complex and multifaceted. Drawing from the insights gleaned from our combined experience of nearly a century and incorporating the invaluable perspectives of carrier underwriters, we anticipate a continuation of trends such as limits management, innovative brokering and underwriting approaches, and the shifting dynamics of insured entities. Considering these trends, we also find the need to review our best practices and offerings as a broker partner to our retail agents, insureds, and carrier allies. Our contribution to our partners encompasses various strategies and approaches aimed at effectively tackling complex issues and presenting strategic solutions.
Our professionals are dedicated to the healthcare industry and provide expert knowledge of the market and the available insurance coverages needed by your clients. Learn more about our Healthcare Practice Area here.
To view this presentation in slideshow format, click here. To download the PDF version of this market update, click here.