The survey also found that:

Fewer than 25% of the respondents currently have aggregate coverage on their books, even though a number of underwriters indicated a willingness to write aggregate provider excess coverage.
Robinson said, "In the past, insurers have been 'burned' writing aggregate coverage. The market assumes that the client has more knowledge of the risk than the insurer does. In addition, the market is reluctant to take on business risk in a competitive market. It's more difficult to underwrite than per-claim coverage, and has more of a potential for catastrophically high loss ratios. For these reasons, it has not taken off in recent years as some have expected. But we think aggregate protection is a growth area, particularly for Medicare ACOs."

There is growing comfort with the use of captives; approximately half of the respondents are currently participating in conjunction with a provider-owned captive.
Provider Excess for bundled or episodic payment risk has not taken off; fewer than 10% of respondents reported having policies in force for bundled payments.
"For one, provider excess for bundled payment contracts is not growing in number as quickly as global risk or shared risk contracts. Second, each bundled payment contract is unique and underwriters do not have industry experience figures or 'book rates' to rely on. Many buyers see bundled payment protection as a secondary concern to protecting large claims risk associated with their global risk contracts," Robinson added.

There have not been many "mega claims" in the Provider Excess sector to date. While there have been a number of paid claims in excess of $5 million in the HMO Re space, there has not yet been a $5 million paid provider excess claim.

Robinson noted that Integro Re said expects a rebound in 2016. "Our survey respondents expect a 14% growth in premium from 2015 to 2016. Since survey respondents are typically optimistic about premium growth, we would temper those expectations slightly: Integro Re is projecting a 10% uplift. We see particular growth in Medicare populations and contracts that focus on specialty drug costs," he added.

Special Reports /

Survey: Provider Excess insurance market stalled in 2015

Related Stories

Recommended For You