Study documents role of insurers in skyrocketing claims

September 1, 2005

A recent study by a New York-based consumer advocacy group found that medical malpractice insurers play a key part in the skyrocketing premiums that physicians in several states have been facing lately.

A recent study by a New York-based consumer advocacy group found that medical malpractice insurers play a key part in the skyrocketing premiums that physicians in several states have been facing lately. The study found that the 15 largest medical malpractice insurers nationwide increased their premiums by 21 times the increase in their claims payment between 2000 and 2004.

Commissioned by the Center for Justice & Democracy, the study also found that insurers' premiums have more than doubled, while payouts have remained flat. Some insurers increased premiums as their payouts and future claims payments decreased. Moreover, insurers have accumulated record amounts of surplus over the last 3 years.

As can be expected, the insurance industry officials disagree with the study's findings. According to The New York Times (7/7/05), insurers believe that the methodology is flawed: Because it often takes several years for a claim to be filed, a comparison of premiums with claims paid is unfair.