Insurance companies that provide medical malpractice coverage in Missouri are showing a profit due to fewer claims. The Department of Insurance says this is the fifth consecutive year malpractice insurance companies have returned a profit and shown positive earnings.

Spokesman Travis Ford says new claims filed in 2008 reached a 10-year low. Ford says the Department of Insurance gathers profit and loss data from insurance companies.

Insurers wrote about $206 million in premiums in 2008, with the top two carriers – Missouri Professionals Mutual and Missouri Hospital Plan – holding a combined 33 percent market share.

Ford says the says new claims filed in 2008 reached a 10-year low. He says there’s no one reason claims have dropped. Missouri passed tort reform in 2005, but Ford says other states that don’t have tort reform measures in place are also showing profits.

He says insurance is a cyclical business and there’s no one reason as to why claims are down. He says it’s a matter of speculation that could possibly be addressed by doctors’ or plantiffs’ lawyers’ groups.

Jefferson City, Mo. – Insurance companies providing medical malpractice coverage in Missouri returned a profit in 2008, marking the fifth consecutive year of positive earnings. The Missouri Department of Insurance has released its annual report <http://www.insurance.mo.gov/reports/medmal/index.htm>on the industry, which shows increased profits are due to policyholders filing fewer claims and insurers paying far less for those claims.

According to Department of Insurance estimates, medical malpractice insurers reported return on net worth of 24.6 percent in 2008, down slightly from the previous year. These profit margins are a dramatic increase from the earnings numbers of 1999-2003, when insurers barely broke even and actually lost money in some years.

New claims filed in 2008 reached a 10-year low: 1,215 new malpractice claims were filed. A total of 3,017 claims were still open at the end of 2008, marking the lowest number in the nearly 30 years the Department of Insurance has been collecting data on medical malpractice insurer companies.

Average claims payments also remained low, although up slightly from 2007. The average claim was just $202,612 in 2008, up from 195,239 in 2007. The highest average claim number was recorded in 2005 at $253,888.

Insurers wrote more than $206 million in premiums in 2008, with the top two carriers – Missouri Professionals Mutual and Missouri Hospital Plan – holding a combined 33 percent market share.

Among insurers providing coverage to physicians and surgeons, market share has grown dramatically in the past 10 years for groups known as "383 companies," named for the chapter of the Missouri Revised Statutes that governs them. These companies insure nearly half of all physicians and surgeons, and one of these companies controls 95 percent of the hospital market.

A 383 is a non-profit corporation formed by a coalition of physicians and is subject to less regulatory oversight than a traditional insurance company. Also, its obligations are not backed by the Missouri Property and Casualty Insurance Guarantee Association, as is the case with a traditional insurer. Instead, these companies have the legal authority the increase assessments to their current members if additional money is needed to pay claims.

The most common allegations in medical malpractice cases were:

• Poor surgical outcomes (32 percent)

• Non-surgical treatment (20 percent)

• Diagnostic errors (18 percent)

• Patient safety (11 percent)

• Medication problems (9 percent)

• Pregnancy and childbirth complications (7 percent)

The 2008 report also presents detailed tables on the nature of alleged errors leading to adverse outcomes, and the nature of injuries sustained by patients. The entire report is available at insurance.mo.gov or by calling the department at 573-751-4126.

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department’s seven divisions work to maintain consumer confidence by examining and monitoring industries and professions and by establishing coherent and evolving policies. DIFP works to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.

Jessica Machetta reports [Download/listen MP3]