With a blurring of lines between some risk retention groups (RRGs) and commercial lines carriers, as well as a trend to define standard coverage vs. E&S, the healthcare marketplace has become difficult to navigate, according to Amwins.
In a recent report released by the firm that explores the state of the healthcare market, it is heavily highlighted that capacity remains available across the industry, both in the US and in London. However, carriers are said to be remaining judicious and even cutting back in some areas such as umbrella coverage.
At the same time, underwriting focus is also becoming more regional, as geographic areas that were once considered favorable venues are now seeing large jury verdicts and the litigation landscape has transformed in many states, which as a result, is making it challenging for underwriters.
An array of new players are also entering the healthcare marketplace, Amwins notes.
Even though social inflation has hit healthcare particularly hard – what was once a $150,000 claim has now doubled – there has also been an increase in the number of markets looking to enter the medical malpractice space.
Despite the appeal of lower costs at a time when most healthcare entities are looking for ways to save money, Amwins states that it expects, and has also seen, movement to more quality coverages with established carriers except when it comes to small healthcare entities that will always be cost sensitive.
In addition, long term care and senior living facilities are continuing to face rising labor costs and staffing shortages, as well as an ongoing surge in professional liability claims. The average claim is now said to approximately sit at around $250,000.
Amwins noted that M&A activity across the long-term care and nursing home space remains strong.
Another key part to highlight is that hospitals are still feeling the impacts of the COVID-19 pandemic.
For many, the most recent fiscal year is showing investment loss, labor costs that continue to rise and the heavy reminder that COVID relief money has stopped. To balance their books, a number of hospitals are having to make tough decisions, which involves deciding what services should be maintained and even having to make some potential lay offs of staff. Such cost-containment measures will make the short list of management liability underwriting considerations at renewal.
However, there has been some positive action, as Amwins states that it has seen certain carriers that exited the market a few years ago return, bringing with them additional capacity and lower rates, which ultimately creates more competition within the marketplace.
Philip Chester, executive vice president and national healthcare practice leader at Amwins, said: “Current developments are keeping the trajectory of the healthcare insurance market in flux, and our market expertise helps our clients navigate through a continually evolving landscape. In an ever-transforming healthcare industry, our commitment remains unwavering – to furnish our clients with robust, high-quality data and intelligence, empowering them with indispensable knowledge essential for their success.”
Yajaira Villegas, senior vice president at Amwins Program Underwriters, commented: “The healthcare scene keeps changing, and when markets aim for stronger partnerships, it’s vital to team up with specialists who really understand the business. Our team of experts are problem-solvers who work alongside our clients and insureds bringing the best solutions-driven approach while keeping a steadfast focus on their long-term goals and helping them win along the way.”
