Chris Sweet – Private equity entering the conversation turns the buying process for insurance to purely dollars and cents. Service, claims-handling expertise, and other differentiators don’t matter. Studies have shown that private equity increases costs to patients/payers—and studies have also linked private equity to a potential decrease in the quality of healthcare provided.

Most private equity firms look to cash out on a healthcare investment in three to four years, so they often do not make risk and patient safety investments. Further, concerns over employee pay and ownership disputes can lead to strikes. Due to all of these concerns we are very cautious about opportunities that arise from a private equity owned practice.

Tim Pingel – Private equity owned practices can be difficult to work with due to the high rate of turnover. Having physician leadership in the practice does seem to help with these issues. We have started asking about ownership structure as part of the evaluation process.

Lucy Sam – It is interesting to see what specialties the private equity firms are focusing in on. These groups have an emphasis on profits, so there are different needs we must hone in on with those buyers.

Tim Pingel – Our regional approach is a differentiator. We have expertise at the state level, but also have the expertise on a national level that we can tap into. The regional approach also helps us communicate opportunities and our appetite to our agency partners.

Heather Van Bibber – Internal collaboration continues to be key to our success—regardless of whether we are reviewing a renewal or new business opportunity. Not only does Underwriting look at an account from a pricing and exposure perspective, but we also proactively obtain valuable input from Claims, Risk Management, Actuary, and Business Development to consider all aspects. In having worked at other carriers myself, I know with certainty it’s not always the case to have such a holistic underwriting approach.

Chris Sweet – Ultimately that will come down to who or what needs to be insured. If an AI tool is doing the diagnosing, it will need to be insured. That raises the question, can AI be a professional? I guess we’ll find out.

We know how humans make decisions, which makes us comfortable trusting them. How do you get comfortable with a machine making decisions?

Chris Sweet – AI is very good at pattern matching. There is the opportunity to use that ability to review data sets in underwriting.

Shep Tapasak – We are looking to use AI to improve the submissions process so we can start underwriting more quickly.

Lucy Sam – We often connect on accounts that may need coverages outside the scope of Standard Underwriting offerings. While we never like to “lose” an account, sometimes an account would be better served in Specialty Underwriting. When that happens, we review the changes and work with Business Development to communicate with the client to see if this is an appropriate fit and ensure a smooth transition.

Chris Sweet – We collaborate every day. My team will often join in on calls so we can learn an account’s needs from the beginning. That way we can jump in quickly if it turns out an E&S solution would be a better fit. Since our perspective is slightly different and we have a lot of experience with a variety of accounts, we can often act as consultants. We also collaborate with PICA, PPM, and others around the Company.

Heather Van Bibber – As severity continues to rise, larger health systems are purchasing higher excess limits – especially hospitals with multi-state exposure and locations. Conversely, carriers continue to reduce limit capacity caused by unfavorable industry trends, creating gaps within excess towers, resulting in accounts to be marketed. We also find more hospitals are requesting options for increased deductibles and self-insured retention structures in an effort to reduce their overall insurance program costs.

Lucy Sam – A majority of our accounts are still $1M/$3M, but there are some $2M/$4M limits out there. We do have appetite for large entities with increased limits if it’s the right opportunity.

Chris Sweet – The demand for excess is increasing but we aren’t binding more. The willingness to pay an appropriate seems to be lagging behind that interest. In most cases we would like to avoid writing higher limits to avoid a runaway situation with claims. Our interest in writing higher limits is greater when we achieve adequate pricing.

Tim Pingel – Most of our accounts are still $1M/$3M as well. We do have some $2M/$4M but we have not seen much demand for it.

Tim Pingel – Yes, we are using third-party data and public information as part of the evaluation process. But it is just a tool that we can use. We hope that by gathering some of this public information on the front end, it will make the application process easier in the future.

Lucy Sam – We are focusing on finding reliable resources for information to limit what you need to provide as part of the submissions process. But there is more to underwriting than just numbers. For example, if an account had a claim but the claim was defensible, that is something we would take into account as part of our review. That is the area where underwriting becomes less of a science and more of an art.

The ABSA survey is designed to hone in on common hotspots of liability risk: 

• Diagnostic Testing
• Patient Communication
• Documentation
• Informed Consent
• Infection Prevention
• Emergency Preparedness
• Staff Training
• Services
• Safety Culture

The survey is rolled out to the practice in a cyclical fashion: 

1. Schedule self-assessments for each team member.
2. Assess liability risk management knowledge.
3. Evaluate all responses to identify gaps.
4. Provide results, feedback, and educational resources to the healthcare team. 

The cycle repeats to align with policy renewal. 

Currently participation in the ABSA is purely voluntary. Insureds who are interested can reach out to the Risk Management department at RiskAdvisor@ProAssurance.com or 844-223-9648 to get started. 

The practice will provide one point of contact, usually the practice manager, to help facilitate the process. After setup, the contact will get a link to distribute that leads to the survey. 

The assessment typically starts on a Monday and runs for two weeks. After that, the compiled data will go to a Risk Management consultant for review. The consultant will then prepare a report and compile any resources needed to address knowledge gaps. Practices can expect the report within 30 days of survey completion. 

The immediate objective is to find and address current gaps, but there will be benchmarking benefits over time. The aggregate data will allow insureds to compare their practice to others based on specialty, location, group size, and more. The annual nature of the program will allow them to see progress over time. 

Beginning in 2024, ProAssurance insureds will have two main vehicles for potential risk management premium credit:

• The annual Loss Prevention Seminar (LPS): A two-hour CME-based educational program; or participation in supplemental online courses (30 minutes to 1 hour each, depending on the course) 
• The ABSA: A survey completed in 15 minutes or less per participant

Practices are welcomed and encouraged to participate in the ABSA even if they prefer to continue participating in the LPS program in 2024. 

ProAssurance will continue to provide CME to address knowledge gaps as part of our overarching risk management strategy.