Liability premium increases slowing, yet rates remain at record highs

15% of insurance companies expect "significant" rate increases over the next year. In 2003, 83% held that outlook.

By Tanya Albert, AMNews staff. Nov. 15, 2004.

More than 67% of medical liability insurers say premiums seemed to be leveling off in 2004, according to results from the annual Medical Liability Monitor rate survey that looks at how much medical liability insurers are charging doctors.

But that's a thin silver lining in what is still a substantial cloud.

Rates are not leveling off everywhere. Triple-digit increases are still being reported by some carriers, the survey showed. And physicians who are experiencing smaller increases are still paying record-high rates.

Also, no one is predicting the end of a "hard market" that has insurers pulling out of certain areas and being more choosy about which physicians they'll insure.

"The crisis we see is not over," said American Medical Association President John C. Nelson, MD, MPH. "It's a tough time for doctors right now in the liability arena."

Tort reform that includes a $250,000 cap for noneconomic damages remains the AMA's No. 1 legislative priority.

Those with a hand in the insurance business agree that the problem isn't solved.

"A lot of the big increases are behind us, but insurers have had big losses," said Lawrence Smarr, president of the Physician Insurers Assn. of America, an association of doctor-owned and/or operated medical liability insurers.

The 2004 rate survey asked companies to report their mature claims-made manual insurance rates with limits of $1 million/$3 million as of July 1 for three specialties: internists, general surgeon and ob-gyns.