Chicago Medical Malpractice Lawyer Blog

As a practicing medical malpractice lawyer I purchase malpractice insurance every year. Although I have never had a claim made against me my premiums have more than tripled since 9/11. I have never heard anyone say there is a crisis in liability against medical malpractice lawyers, yet the premiums keep going up. What gives?

Insurance companies raise their premiums when the money they are making on their investments goes down in bad markets. Then they ramp up the PR machine to blame the higher premiums on run away juries and greedy lawyers. When they start doing better in the markets their premiums usually stabilize. They do not often lower premiums now that their customers are used to the higher rates.

This year the companies will be making record profits:Insurance companies are expecting record profits in 2006 after predictions of another year of devastating hurricanes have so far come to naught. Industry experts are estimating that profits may reach $60 billion, on a combination of higher premiums along the coasts, no major payouts for natural disasters and strong investment returns. The insurers also had high profits on other lines of coverage like auto insurance, workers compensation and general liability. The record profits expected this year come after a terrible 2005, when insurers paid out $61 billion for damage from Hurricane Katrina and other storms. Even so, the insurers ended up with a profit of $43 billion for the year because of exceptionally good results on investments, declining claims on policies on homes away from the coast and profits on other lines of coverage. But homeowners and businesses along the coasts, hit with much higher insurance costs after the barrage of hurricanes, probably will not get any relief as a result of the much quieter season, industry experts and consumer advocates said."

Joseph B. Treaster, New York Times, 10/14/06
http://www.nytimes.com/2006/10/14/business/14insure.html