Jeez..this political season is full of rhetoric, just as this article here is. Let’s use some common sense here to arrive at a conclusion. If insurers are gouging the doctors, charging far more than is warranted, then they are making a whopping profit. Now, if that were true, wouldn’t all insurers enter the market? Of course they would. So if pricing is truly excessive, why are there so few writing the business?
Shame on the folks at Insurance Journal. They reproduced this news release almost word-for-word, didn’t call any insurance spokesmen for comment, or cite any of the studies (Milliman, GAO, Brown Borthers, etc.) that discredited the earlier studies. I’m not sure why I expected better, but I did. Same on the Insurance Journal for poor journalism
The AIR study is absurd. AIR redefines “loss ratio” as Direct Premium Written per Doctor divided by Losses Paid per Doctor, a calculation that is contrary to statutory accounting and GAAP. AIR ignores all reserves on unresolved claims and allowances for IBNR. It completely ignores the fact that if an insurer were to stop writing business today it would continue to pay losses for years after written premium were reduced to zero. The AIR study is so focused on “proving” insurance cycles are tied to investment income that it ignores its own data. Even their grossly understated loss ratios indicate that by the year 2000 the ratio of losses paid to written had steadily grown to 79.1%. Adding back an average allowance for reinsurance, underwriting expense and premium taxes would still yield a “combined” ratio well above 100. This “study” is nothing more than the uniformed manipulating selected data to support a pre-conceived conclusion.
This is exactly the junk science that Kerry and Edwards will incorporate in their speeches; no more truth about “tort reform”, if you please! This is the kind of junk science that Edwards found so handy at trial.
Then where are the carriers? A hard market is an example of simple supply and demand economics. If Med/Mal is such a profitable business, why isn’t every med/mal underwriter out there scrambling to throw OPB/GYN’s on the books?
I did not analyzed the study as Larry Byers has but given the study author, Robert Hunter, this is no surprise. Those of us in TX that had to endure his short tenure at our DOI saw him decimate the department and relationships with most of the parties they regulated. My obersavation on him equates to a FAR, FAR, left-wing liberal that will distort any fact for his own purpose. Why do you think he moved to Washington? Just consider the source.
With regard to Med-Mal premiums and alleged gouging, the doctors don’t believe this alleged tie between low investment results and high premiums. I was at a symposium on Workers’ Compensation in Illinois yesterday. It is put on by a doctor and several specialists were in attendance. A plantiff attorney tried to float that balloon and it was promptly shot down. A hand surgeon said that contention is just wrong. Why would a hand surgeon in Indiana pay less than a hand surgeon in Illinois if this were true? While all insurance (property, general liability, auto)prices have gone up in the past few years, none has gone up like med mal has. If St. Paul, the former largest writer of med mal in the country exits the market because they can’t make money, how is that tied to investment results? It is simply a matter that they don’t take in enough premium to cover claims. Look at the Aon study on claim trends. The trend is to lower frequency and higher severity. This is a quality of life issue for communities. If we don’t have doctors, people won’t stay, employers won’t locate in our Cities and States!
Don’t let the facts get in the way of slamming the big bad insurance companies
If the insurance industry is charging unreasonable rates and the claims don’t support it, then there should also be windfall earnings and profits. That should make their stocks soar. So, who buys insurance company stocks into their retirement portfolios, and whay don’t here of insurance company stocks being touted as good picks and hot picks? Why have so many companies gone under and others have to merge? Are they ALL run poorly, or is it because they have to sell a product that no one knows what theactual price is for five years after it’s been sold! I’d like to see the author of this article pull that one off.
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Jeez..this political season is full of rhetoric, just as this article here is. Let’s use some common sense here to arrive at a conclusion. If insurers are gouging the doctors, charging far more than is warranted, then they are making a whopping profit. Now, if that were true, wouldn’t all insurers enter the market? Of course they would. So if pricing is truly excessive, why are there so few writing the business?
Shame on the folks at Insurance Journal. They reproduced this news release almost word-for-word, didn’t call any insurance spokesmen for comment, or cite any of the studies (Milliman, GAO, Brown Borthers, etc.) that discredited the earlier studies. I’m not sure why I expected better, but I did. Same on the Insurance Journal for poor journalism
The AIR study is absurd. AIR redefines “loss ratio” as Direct Premium Written per Doctor divided by Losses Paid per Doctor, a calculation that is contrary to statutory accounting and GAAP. AIR ignores all reserves on unresolved claims and allowances for IBNR. It completely ignores the fact that if an insurer were to stop writing business today it would continue to pay losses for years after written premium were reduced to zero. The AIR study is so focused on “proving” insurance cycles are tied to investment income that it ignores its own data. Even their grossly understated loss ratios indicate that by the year 2000 the ratio of losses paid to written had steadily grown to 79.1%. Adding back an average allowance for reinsurance, underwriting expense and premium taxes would still yield a “combined” ratio well above 100. This “study” is nothing more than the uniformed manipulating selected data to support a pre-conceived conclusion.
This is exactly the junk science that Kerry and Edwards will incorporate in their speeches; no more truth about “tort reform”, if you please! This is the kind of junk science that Edwards found so handy at trial.
Then where are the carriers? A hard market is an example of simple supply and demand economics. If Med/Mal is such a profitable business, why isn’t every med/mal underwriter out there scrambling to throw OPB/GYN’s on the books?
I did not analyzed the study as Larry Byers has but given the study author, Robert Hunter, this is no surprise. Those of us in TX that had to endure his short tenure at our DOI saw him decimate the department and relationships with most of the parties they regulated. My obersavation on him equates to a FAR, FAR, left-wing liberal that will distort any fact for his own purpose. Why do you think he moved to Washington? Just consider the source.
With regard to Med-Mal premiums and alleged gouging, the doctors don’t believe this alleged tie between low investment results and high premiums. I was at a symposium on Workers’ Compensation in Illinois yesterday. It is put on by a doctor and several specialists were in attendance. A plantiff attorney tried to float that balloon and it was promptly shot down. A hand surgeon said that contention is just wrong. Why would a hand surgeon in Indiana pay less than a hand surgeon in Illinois if this were true? While all insurance (property, general liability, auto)prices have gone up in the past few years, none has gone up like med mal has. If St. Paul, the former largest writer of med mal in the country exits the market because they can’t make money, how is that tied to investment results? It is simply a matter that they don’t take in enough premium to cover claims. Look at the Aon study on claim trends. The trend is to lower frequency and higher severity. This is a quality of life issue for communities. If we don’t have doctors, people won’t stay, employers won’t locate in our Cities and States!
Don’t let the facts get in the way of slamming the big bad insurance companies
If the insurance industry is charging unreasonable rates and the claims don’t support it, then there should also be windfall earnings and profits. That should make their stocks soar. So, who buys insurance company stocks into their retirement portfolios, and whay don’t here of insurance company stocks being touted as good picks and hot picks? Why have so many companies gone under and others have to merge? Are they ALL run poorly, or is it because they have to sell a product that no one knows what theactual price is for five years after it’s been sold! I’d like to see the author of this article pull that one off.