PLUS Medical Symposium 2016 – We All Have Work To Do

Every year, I attend the PLUS Medical Symposium. It’s always great to connect with healthcare liability underwriters, but I also show up with a second, slightly more strategic goal: to have as many conversations as possible with industry colleagues. The content and tone of those discussions give me a sense of where we all are in the medical malpractice market cycle.  After a three-day meeting marathon at the most recent gathering in Chicago, you know what impressed me?  Respectfully … not much.  With a few notable exceptions, it was just more of the same.  And more of the same is exactly what many think we can expect for the foreseeable future in the medical professional liability insurance arena.

The rationale for this opinion is certainly sound.  It’s true that as predicted for 2015 the combined ratio for medical malpractice writers as a whole increased to about 100%, which means there is no underwriting profit left.  It’s also true that as predicted investment returns on the whole continued to be under pressure.  Finally, although reserve take-downs did not drop off as much as some expected, in the aggregate they were significantly lower than in the recent past.  This means profitability was propped up less in 2015 by reserve take-downs than in previous years when they were more robust.  And yet overall the industry’s capacity was enhanced even further by another profitable year.

Not surprisingly, many people in the brokerage community are moving away from the healthcare arena.  As I noted in a previous article of mine, The Case For A True Healthcare Specialist, there are very few wholesaler brokers left that are true healthcare specialists.  They have long since moved on to other industry segments and product lines where it’s easier to make a living.  I see the same thing happening on the retail side.

But some of us don’t believe current market conditions are the “new normal”.  We believe for a whole host of good reasons that the cyclical nature of the medical malpractice market will continue.  We’re here for the long haul.  Having made the decision to stay focused on the healthcare space, we admittedly find the current market conditions to be a bit depressing at times.  But boring?  I don’t think so!  After all, we’ve got a job to do – find new ways to add value for our customers.

To me, this is the beauty of current market conditions.  Whether retailer or wholesaler, as new ways of adding value are forged in these lean times those of us that continue to focus on the healthcare arena are able to build stronger and more durable organizations.  The pie may be shrinking, but ingenuity and continued specialization allow us to take a bigger slice.  Just as important, we are elevating our visibility in the healthcare space and creating business operations that will not only allow us to differentiate ourselves from our competitors that have irons in other fires, but help our customers take full advantage of the turn in the medical malpractice market when it does come around.

There is no doubt in my mind that a continued exclusive focus on the healthcare space is a good business decision for Ethos.  After all, when it comes to healthcare professional liability, true healthcare specialists are more important now than they ever have been for all kinds of reasons.  Many retailers across the U.S. feel the same way.

For those of us who have decided to continue to focus on the healthcare arena more of the same isn’t good enough.  We’ve got work to do.  Let’s get it done together!

Ethos Insights

• Ethos is one of the few remaining wholesalers still committed exclusively to healthcare liability.
• Regardless of where we are in the market cycle retailers and their insureds will always benefit by working with specialists who can see the big picture as well as the subtle nuances of the healthcare segment.
• Ethos will continue to adapt to the changing market by collaborating with their retail clients to find new ways to add value.