AM Best: US Medical Professional Liability Premium Growth Slows Further
Why It Matters
Sustained underwriting deficits and limited premium growth pressure MPL insurers to raise rates or tighten coverage, directly affecting health‑care providers’ liability costs and the broader insurance market.
Key Takeaways
- •Underwriting losses rose to $712 million in 2025, up from $546 million
- •Premium growth slowed as competition limited rate‑increase opportunities
- •Investment income doubled since 2021, offsetting underwriting deficits
- •Reserve releases fell to $155 million, reducing profitability boost
- •Hospital premiums dropped 7%, while other providers grew 5.7%
Summary
A new AM Best report shows the U.S. medical professional liability (MPL) market posted a $712 million underwriting loss in 2025, up from $546 million in 2024, while premium growth fell short of expectations.
The widening loss reflects higher claim severity, social‑inflation pressures and competitive constraints that limited rate hikes. Investment income more than doubled since 2021, becoming the primary source of profit, and reserve releases shrank to $155 million, offering only modest underwriting relief.
Associate Director Vicky Riggs highlighted that carriers are “pushed for higher rate increases amid claim severity,” while Connor Brock noted the muted reserve development and the shift of hospital risk to self‑insured retentions and captives. Physicians still command the largest premium base (> $5 billion) but are losing share to hospitals and other health‑care professionals, whose premiums grew 5.7 %.
The trend forces MPL insurers to lean on investment returns and consider stricter underwriting, while pending state tort‑reform legislation adds uncertainty. Persistent losses could translate into higher premiums for providers and tighter coverage terms across the health‑care sector.
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