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Casualty Actuaries in Reinsurance

Casualty Actuaries in Reinsurance. Observations on Medical Malpractice. This document is incomplete without the accompanying discussion; it is confidential and intended solely for the information and benefit of the immediate recipient hereof. Observations on Medical Malpractice.

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Casualty Actuaries in Reinsurance

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  1. Casualty Actuaries in Reinsurance Observations on Medical Malpractice James D. Hurley, ACAS, MAAA This document is incomplete without the accompanying discussion; it is confidential and intended solely for the information and benefit of the immediate recipient hereof.

  2. Observations on Medical Malpractice • Financial results • Data/Analytical issues • Tort reform

  3. Observations on Medical Malpractice • Financial results impacted by... • 1990’s • modest loss trends • favorable reserve development • relatively high investment returns • expansion • slippage in pricing • 2000’s • loss trends pick up • unfavorable reserve development • investment returns turn • rates adjusted

  4. Combined Ratios Source: AM Best, RAA

  5. Medical Malpractice - Loss Ratios Source: AM Best

  6. Observations on Medical Malpractice • Financial results impacted by... • 1990’s • modest loss trends • favorable reserve development • relatively high investment returns • expansion • slippage in pricing • 2000’s • loss trends pick up • unfavorable reserve development • investment returns turn • rates adjusted • ... a work in progress?

  7. Observations on Medical Malpractice • Data/Analytical issues • Jurisdictions • Limits/Clash • Review ALAE/Indemnity combined and separately? • Sources • company data • JVR

  8. Medical Malpractice – Jury Awards Source: Jury Verdict Research

  9. Observations on Medical Malpractice • Data/Analytical issues • Jurisdictions • Limits/Clash • Review ALAE/Indemnity combined and separately? • Sources • company data • JVR • National Practitioner Data Bank • state specific data sets • Experience vs. expected ILF’s

  10. Observations on Medical Malpractice • Tort reform • Background – Federal • HR5/HR4280 • MICRA-like • Background – State • many have discussed • several have passed • likely impacts

  11. Observations on Medical Malpractice • Tort reform (cont’d) • Issues/Risks • limited data to evaluate • prospective credit? • interpreted as expected • upheld • specifics • non-economic limit: per defendant or per occurrence • collateral source: jury disclosure or after award • panels: admissible or not • PCF, etc. • no-fault

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