Social Inflation & Medical Malpractice Losses: What to know and what to do!
Social inflation refers to a pattern of the average insurance claim rate being higher than that of overall inflation. In the medical realm, social inflation is a major cause for why insurance premiums have been rising at such a high rate and is attributable to between $2.4 billion and $3.5 billion in losses. The Doctor’s Company recently conducted a study to measure the effects of loss development factors and how they impact social inflation. Below we will cover the most pertinent details of social inflation and what you can do in order to navigate these waters effectively.
What to know!
Overall, it appears that changes in the medical marketplace and claim-related behavioral impacts of Covid-19 appear to be major players in the causes of social inflation. More specific causes are diagnosable as higher totals of oversized jury awards, extensions in legal proceedings, and rollbacks in tort reform that overturn statutory limits on damages unassociated with economic factors. The rate of claims in excess of $1 million has accelerated and has contributed to between 8%-11% of losses between 2011 and 2021.
What to Do!
The most important thing to consider from market indications is what you can do to best approach these situations as they progress. First and foremost, investing in safety measures and precautions are a crucial first step. Investing in safety will allow you to avoid hazardous situations and also be able to be attentive and proactive toward identifying situations to be avoided. In addition, make sure to collaborate with your insurance providers as much as you can. Becoming more comfortable conversing with your agent will allow you to be more educated on changes relevant to your policies and apply the best coverage that matches your situation.
In conclusion of today’s message, remember to stay educated on market changes and remain proactive as it will only leave you better prepared for success and protected in the event of problems!
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