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NewswireTODAY - /newswire/ -
St. Louis, MO, United States, 2012/07/23 - Mutual medical malpractice insurance companies exist to benefit the physicians they insure. Malpractice claims have leveled, rates are stable, and insurance companies are profitable - KeaneGroup.com.
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Many mutual insurance companies across the United States are giving money back to policyholders in the form of dividends or credit toward premium at renewal time.
Why would a company give money back?
Because mutual professional liability insurance companies exist to benefit the physicians they insure. That’s why they were formed in the first place: to empower physicians with a company that listens and only takes what it needs, and then gives back “policyholder surplus” when there are sufficient funds to pay all claims and expenses and adequate reserves.
Of course, there’s no guarantee that an insurance company will give dividends or premium credits to its physicians, but when claims are down and profit is up, a true mutual will give back.
In 2012, mutual medical professional liability insurance companies in states with low claims experience are giving dividends to physicians:
• ISMIE in Illinois is giving $17 million back and has given dividends annually for six consecutive years, totaling $91 million.
• TDC, a national company, is giving $21 million this year and has given dividends since 1976, totaling $228 million.
• NORCAL in California is giving back up to 10 percent of the premium paid, and since 1975, has given $425 million in dividends.
• TMLT in Texas is giving $35 million in dividends in credit at renewal in 2012.
• MagMutual in Georgia is giving $15 million this year and has given a total of $108 million in dividends.
• MICA in Arizona is giving back $50 million in dividends and has paid dividends for five years in a row, totaling $423 million.
• BETA Healthcare Group in California is giving $16 million credit at renewal this year, which makes 20 consecutive years. Total dividends: $77 million.
Not all mutual companies use their surpluses to pay dividends back to their policy holders. Last year, Missouri Professionals Mutual (MPM), a Missouri-based mutual company, used the bulk of its surplus to purchase a $100 million reinsurance treaty from a Kansas stock company that’s privately owned by the mutual company’s managing director. This transaction has been the subject of several recent newspaper stories in the St. Louis Business Journal.
The amount of reinsurance purchased is significantly more than the amount of reinsurance purchased by the mutual company the previous year, and seems to run against the current trend of fewer medical malpractice claims and lower payouts following passage of tort reform in Missouri.
According to industry experts, the outlook for medical professional liability insurance companies remains stable for the foreseeable future in Missouri and all across the United States. A recent seminar provided by the Casualty Actuarial Society (CAS) on June 5 in Boston confirms this. “The medical professional liability industry is positioned to continue as a very profitable insurance industry segment today and well beyond 2012,” according to one of the seminar panelists.
In the CAS presentation, all of the experts agreed that in most states, the frequency of claims is down, the severity of claims has stabilized, and advancements in risk management training and patient safety have contributed to a positive outlook for the medical liability insurance sector. Add to these factors that tort reform has helped reduce the amount of claims in many states, and the result is an environment favorable to the insurance companies.
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