5 Advantages of Public Stock Over Mutual Insurance Companies
White Paper Summary
The medical professional liability market is transforming. After years of unsustainably low rates and rising loss costs, underwriters are pulling back on limits and raising rates. COVID-19 has placed enormous pressure on hospitals, health systems and practitioners to provide the best care under unprecedented times.
In the midst of these challenges, buyers may choose to step back and re-evaluate their choice of carrier.
MPL buyers may switch based on two factors: a bad claims experience and price. Other reasons include moving to a state where the incumbent carrier is not active or relevant or if a physician practice joins a large entity and the incumbent is no longer able to meet increased coverage needs.
One rare factor is ownership structure. According to Rob Francis, EVP, ProAssurance, ownership structure provides vital clues regarding customer service quality, financial health and changing market sustainability: “In 20+ years at ProAssurance, I don’t recall a single client raising questions about ownership structure. When an agent is reviewing the pros and cons of competitive quotes, ownership structure is simply not on the spreadsheet. That’s a shame, because it does have a material effect at both the individual account service level and on overall company health,” Francis said.
Public stock companies often face criticism that their top priority is to generate profit for shareholders while mutual companies would theoretically solely serve its member/owners. However, a stock ownership structure offers specific advantages over a mutual structure. Here are five ways.
To learn more about ProAssurance, please visit their website.