$50M+ Healthcare "Super Losses" On the Rise

Ian Thompson, Senior Vice President, Healthcare, Hiscox, expressed concern that such "super-losses" are increasing in both frequency and severity. He pointed to cases such as an ongoing investigation into over-stenting in Maryland as just the kind of case that can ultimately become a catastrophic medical liability loss. This concern is compounded by increasing evidence that batch losses (in which insurers can place losses together under an aggregating cause) are also becoming larger and more frequent.

According to Hiscox figures, more than half of the largest healthcare claims in history have been paid in the last five years. Hiscox's research further revealed that losses above $5 million have increased from about 0.25% of all medical liability losses in 2000 to about 0.7% currently, and are projected to reach 1.0% by 2014.

"We are already seeing numerous and very public reports coming out of the Hospital Data Privacy area, and challenging times appear to be ahead," said Thompson. "With insurers charging premiums for catastrophic events often based on a 1 in every 200- or 300-year loss, it is time that the healthcare insurance sector took a careful look at its catastrophic exposures."