Medical professional liability insurers are at a sweet spot in their underwriting cycle. For insurers, it's a place where loss ratios are low, capital is plentiful–and in this case premiums, though under pressure, are only slightly off their peak.
But as any athlete knows, maintaining momentum is a tough proposition, and clear signs of a turn in fortune are already evident. They can be found in the somewhat overlooked corner of insurance known as loss reserves.
Over the past five years, MPL insurers have released billions of dollars in prior-year reserves. Aggregated MPL industry data reviewed by Milliman shows more than $7.5 billion in prior-year reserve releases from 2005 through 2009, with well over half of the amount booked in the last two years of the period.
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