Specialty insurer ProAssurance Corporation recently announced a preliminary estimate of $37 million of adverse development in its prior accident loss year reserves within its Specialty Property & Casualty unit.
This adverse development is within the company’s fourth-quarter 2019 results, and is a result of deteriorating loss experience, which is being driven by a large national healthcare account written since 2016.
For the fourth-quarter of 2019, the specialty insurer says that it also expects to record a current accident year net loss ratio for the Specialty P&C segment of between 134% and 148%. ProAssurance states that this also relates to deteriorating loss experience related to the same national healthcare account, and also within the healthcare professional liability excess and surplus lines of business, albeit to a lesser extent.
The book of business this relates to includes custom physicians, healthcare facilities, correctional healthcare, and long-term care policies.
At the same time, ProAssurance says that the loss estimates for its core physicians, podiatric, chiropractic, legal professional liability and medical technology liability business lines are to be in line with expectations.
Overall, the insurer anticipates that the adverse development and increased current accident year loss ratio in Q4 2019 will result in a full-year 2019 net loss ratio of between 105% and 109% for the Specialty P&C unit.
ProAssurance President and Chief Executive Officer (CEO), Edward Rand, Jr., commented: “As we have observed and discussed over the past 18 months, results in the medical professional liability line are deteriorating.
“Following our usual year-end review of updated loss data with internal and external actuaries, management concluded that additional reserves were needed in our Specialty Property & Casualty segment, particularly in regard to a single large national healthcare account that has experienced losses far exceeding the assumptions made when the account was underwritten.
“Since the middle of 2019, new leadership in the Specialty P&C segment has executed a comprehensive underwriting strategy in response to emerging loss trends and changing conditions in healthcare professional liability.
“This includes organizational structure enhancements, recruitment of additional talent in Specialty underwriting, tightening of underwriting criteria, terms and conditions and price strengthening. We are encouraged by our progress, and believe this strategy has positioned the Company for future success.”
