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The Healthcare industry continues to move forward in the face of great uncertainty, driven largely by government legislation and economic pressures. Lockton’s Northeast Healthcare Practice is seeing leaner organizational structures challenged with operating complex systems while delivering a broader range of services. “More With Less” seems to be the new norm.

“Many providers are expanding their geographic footprint to bring greater scale to their operations.”

Many providers are expanding their geographic footprint to bring greater scale to their operations.Often, this is to compete with – or promote integration with – larger health systems. Furthermore, reforms under the Affordable Care Act (ACA) have the healthcare industry moving toward a “continuum of care” which has encouraged many of these structural changes.

The various iterations of what networks and health systems look like, and the new ways providers are delivering care, will be an evolving process that balances profitability and the delivery of higher quality care. Overlay reimbursement changes, consolidation among the major commercial payers, and the uncertainty of the current insurance marketplace, and it becomes clear the industry has a challenging environment to navigate.

As it relates to the healthcare P&C market outlook, here are some quick points from Lockton’s Northeast Healthcare Practice:

General, Professional and Excess Liability

  • Ample capacity sustains a competitive environment
  • Favorable loss experience often offsets an increase in underwriting exposures; as hospitals continue to consolidate, underwriters look to other healthcare segments for new opportunities
  • Underwriters concerned with the increasing number and severity of “batch” claims

Managed Care Errors and Omissions

  • Pricing beginning to firm
  • Carriers will be looking to delineate cyber exposure from the historical managed care risks
  • Separate cyber/privacy policies and managed care policies will need to dovetail appropriate coverage elements
  • Stacking of limits with other coverages, such as cyber and D&O, is a concern

Workers’ Compensation

  • Pressure on deductible levels based on escalating claim severity
  • Guaranteed-cost programs are experiencing stable conditions due to positive frequency trends and market competition
  • Loss-sensitive programs are seeing single digit rate increases, again due to loss severity

Automobile Liability

  • Guaranteed-cost programs continue to experience stability in the market
  • Loss-sensitive programs are generally seeing flat to single digit rate decreases


  • Extremely competitive
  • Rate reductions of 5-10 percent
  • No pressure to raise deductibles

Directors and Officers

  • Heightened sensitivity to management liability as a result of privacy breach claims
  • Rate increases of 2-5 percent on policies written for private and non-profit companies
  • Rate increases of 0-4 on policies covering public companies


  • Market in turmoil
  • Rate increases ranging from 10-20 percent with some underwriters pushing for higher retentions
  • Renewal terms are largely dependent on the controls in place
  • Some markets beginning to insist on sub-limits for regulatory and breach response coverage
  • Much uncertainty surrounding not “if” but “when” the next catastrophic breach will occur