The California Department of Insurance has issued their annual report outlining the market share and written premiums of insurers writing medical malpractice insurance policies in California. This is closely watched data as the failure rate for medical malpractice insurance companies is among the highest in the insurance industry. The failure rate for companies looking to participate in the medical malpractice insurance industry exceeds 76% – a daunting figure for physician insureds. Scores of physicians have been caught up in the catastrophic failures of various risk retention groups and interdeminty trusts, leaving physicians in a lurch as the insurance policies they paid thousands of dollars for now prove totally worthless. Physicians and surgeons in California remember all too vividly the years of litigation prompted by the infamous failure of Physicians Interindemnity Trust in the mid 90s.
The state of California attempts to provide consumers with the information they need to obtain coverage from an insurer they deem financial stable. Generally, the total written premium (all the money to be collected on policies the company issues to health-care providers like physicians and surgeons) and the incurred loss (a figure which represents claims paid out by the insurer plus this figure can include an adjustment for reserves set aside for claims to be paid) can provide a picture of medical malpractice insurers financial stability. However, actual financial documents are also available on the insurance department website for further inquiry into the financial stability of any medical malpractice insurance company.
The Doctors Company easily topped the group market share list of medical malpractice insurance companies in California with over $200 Million ($210,609,883) in written premium. Norcal Mutual Insurance Company a distant second with over $150 Million in written premium. Medical Protective, the Berkshire Hathaway company, comes in at just under $30 Million in California. Its worth noting The Doctors Company acquired SCPIE (AHI) and this acquisition is reflected in thewritten premium, and Berkshire Hathaway remains strong on a national level though the California market share reflects a conservative and stringent underwriting approach offering medical malpractice insurance only for the best of the best. A newer player in the medical malpractice industry, Fairway RRG reported just over $7 million in written premium for all of 2009 (and even more worrisome is the Fairway RRG incurred losses reported of over $3 Million for 2009).
California market share data should be considered prior to purchasing medical malpractice insurance – lest you find yourself with a medical malpractice carrier touting great discounted rates without the money to actually pay the claims. With the exorbitant costs of medical malpractce insurance, you definetely need to consider if you get what you paid for. Always, always, always check the AM Best Ratings and financial data before purchasing a policy because in medical malpractice insurance there is always safety in numbers!