Why Malpractice Insurer Hasn't Faced Doomsday
Illinois’ biggest medical liability insurer, ISMIE Mutual Insurance Company, was expected to falter after the Illinois Supreme Court denied a proposed law to cap damages that can be recovered in jury verdicts. This didn’t happen. Rather, ISMIE saw their numbers hit a record-high $57 million in 2012. This was largely in part due to the fact that there were fewer claims, yet the profits and investment gain remained high.
The $57 million was the highest for ISMIE in about two decades. Malpractice and liability insurance is a large expense for independent practices and the rates in Chicago are among the highest in the United States. This has helped ISMIE remain afloat even after the Supreme Court ruling; something that wasn’t supposed to happen.
While this was a surprise for the insurance industry, there are still many who believe that there will be a time when these liability insurance companies start to see their numbers fall. This is especially due to the fact that not all malpractice claims are filed right away. When these are filed years after the incident, it can affect the profit numbers of all malpractice insurers, including ISMIE.
In 2012, ISMIE reported that they wrote $264 million in gross premiums. This number was 38% less than their 2004 number of $425 million. The number of claims was also down more than 20%. This is a big factor in regards to why ISMIE was able to have a record year. It also helps that their net income increased steadily for many years and they hadn’t seen a loss in a decade.
It is still undetermined if ISMIE and other malpractice insurers will be able to keep up these numbers, but if claims are able to stay low, the Illinois Supreme Court ruling should continue to have no bearing regarding the malpractice insurers’ success.