The insurance marketplace began firming in Q3 2019. The COVID-19 pandemic and the hardening market greatly impacted the healthcare property and casualty insurance marketplace. Insurance premiums are rising, coverage is restricting, and underwriters are under more scrutiny. Our forecast will help you better understand the “why” behind these increases and how to best position your organization. Insurance companies that provide property and casualty insurance for healthcare organizations and medical professional liability insurance have seen an increase in frequency (number of claims) and severity (verdicts and settlements), resulting in poor underwriting results since 2015. Insurers are raising premiums, reducing capacity, or leaving the marketplace altogether to improve profitability.


You need an insurance broker who has a proactive marketing and risk management strategy. The best way to position an organization is to provide quality, detailed submissions with thoroughly completed applications, face-to-face (or virtual) meetings with underwriters, and develop sound patient safety and risk management strategies.


Healthcare organizations have seen an increase in severity, frequency, and what is called frequency of severity—high value verdicts and settlements. In 2020 we experienced tighter underwriting than in 2019, and the COVID-19 pandemic wreaked havoc on insurers and underwriters. We begin 2021 with great uncertainty. Each organization may be impacted differently depending on specialty, claims/loss experience, years in business, and overall patient safety and risk management practices. What is guaranteed, nearly every healthcare organization will be impacted.  We categorize our predictions by product line:

Medical Professional Liability: +3 to +15%

Organizations and individual providers with claims may see 20%+. Though carrier surplus is adequate, insurers have struggled with loss ratios of more than 100% since 2015. Insurers that have removed discretionary premium credits and increased rates for poor performing accounts are now increasing rates across the board in order to produce underwriting profits. In 2021 rate changes will depend on specialty, loss experience, and individual account characteristics. Most insurers have reduced capacity for any single account to no more than $10 million. Those willing to go above $10 million are doing so at increased rates. We see the MPL marketplace continuing to harden through 2022.

Property: +5 To +15% Rate Increase and Coverage Constriction

In 2019 we saw tightened underwriting, increased rates, and restricted coverage. Catastrophic coverage for earthquake and named storms will continue to see some of the highest rate increases in 2021. The global pandemic and the largest natural catastrophe losses since 2017 in the United States continue to impact property rates. Insureds should look closely for any endorsement restricting or limiting coverage in 2021. Policyholders with larger property portfolios may need to take larger deductibles and retentions, consider self-insuring some risk, and take a more critical look at limits to keep costs down.

Casualty: +5% To +15% Rate Increase for Favorable Loss Experience Facilities

Insureds with stable loss experience will continue to have competition for their business. Facilities with losses will see fewer companies offering to quote, deductible and retention increases, and less favorable terms and conditions.

Excess Liability/Umbrella: +10% to 25% Rate Increase with Restricted Limit Offerings

We started seeing large rate increases on this product line 2019, and this will continue into 2021. The North American liability marketplace continues to be plagued by an unprecedented number of nuclear verdicts. The first layer of excess insurance up to $15,000,000 will continue to be the hardest hit due to the frequency of verdicts exceeding $1,000,000.

Commercial Auto: +5% to +15% Rate Increase

The auto market is improving as insurers have increased rates for several years. Organizations with strong best practices and loss history are seeing minor changes to rates, whereas organizations without strong fleet management program are seeing greater increases.

Management or Executive Liability

Without state or federal legislation providing liability immunity for organizations in compliance with COVID-19 guidance, the management liability market could be heavily impacted. Directors & Officers is seeing +10% to +50% increases, higher retentions, and more restricted coverage. Employment Practices Liability is seeing +10% to +30% increases. For Fiduciary Liability, +5% to +70%. And Crime/Fidelity remains flat or increases to +15%, primarily driven by social engineering/false pretense claims. New organizations and those with financial challenges are experiencing increases of over 50%. But, there is hope. We are beginning to see new capacity coming to the management liability marketplace which could drive rates down and help minimize increases.

Workers’ Compensation (States other than Washington)

Generally, rates will be flat to +5% depending on the state(s) of operation. Workers’ Compensation is one line of business where rates should remain relatively favorable in 2021 depending on the state employees are located in. Since March 2020 insurers have become more conservative with certain classes of business, including hospitals, long-term care, and skilled nursing class codes where exposure to COVID-19 is highest. Additionally, presumptive COVID-19 legislation in states like California has had an impact on 2021 rates, and some rate increases are expected in 2022.

Cyber Liability: 10% to +30%

There is still adequate appetite for cyber insurance and reinsurers continue to be bullish. Ransomware incidents are increasing dramatically in frequency and severity, which will result in higher premiums.

To end optimistically, this is not the new normal (now there’s an overused phrase). Insurers continue to offer new product lines, which ultimately increase competition and drive down pricing. Insurers are working to establish a new equilibrium by retaining well-performing accounts and taking rate on loss-affected and poor performing policyholders. The big unknown is fallout from the COVID-19 pandemic. Immunity from liability will go a long way to ease insurers’ fears. Medical malpractice legal experts continue to debate whether healthcare will see a “halo effect” from jurors as the population is vaccinated and we are able to return to a more normal life.

The Partners Group has been providing insurance and risk management services to the healthcare community for 35 years in the Pacific Northwest.  Thank you to all healthcare workers for your efforts during this pandemic, we recognize the financial, mental, and operational impact COVID-19 has had on all of you.  We would love the opportunity to have a conversation with you to further discuss the market conditions and possible impact on your business.