OIC WA | 360-725-7009 | P.O. Box 40255 Olympia, WA 98504-0255
2021 Medical Malpractice
Annual Report
Claims closed from Jan. 1,
2016 through Dec. 31,
2020
October 2021
Mike Kreidler, Insurance Commissioner
www.insurance.wa.gov
Medical Malpractice Annual Report | October 2021
2
Table of contents
2021 Medical Malpractice Annual Report ................................................................................. 1
About this report .......................................................................................................................... 4
Key statistics ................................................................................................................................. 5
About the medical professional liability insurance market .............................................................. 5
About claim data submitted by insurers and self-insurers ............................................................... 6
Total claims ............................................................................................................................................................................. 6
Payments to claimants........................................................................................................................................................ 6
Defense costs ......................................................................................................................................................................... 6
Method of settlement ......................................................................................................................................................... 6
Payments by type of medical provider ........................................................................................................................ 7
Payments and defense costs by age of claim ............................................................................................................ 7
Regional comparisons ........................................................................................................................................................ 7
Allegations .............................................................................................................................................................................. 7
About lawsuits filed and settled by attorneys .................................................................................... 8
Compensation to claimants .............................................................................................................................................. 8
How lawsuits settled ............................................................................................................................................................ 8
Gender of claimant .............................................................................................................................................................. 8
Age of claimant ..................................................................................................................................................................... 8
Regional comparisons ........................................................................................................................................................ 8
Introduction .................................................................................................................................. 9
Market analysis ...................................................................................................................................... 9
Summary data for closed claims reported by insurers, risk retention groups and self-insurers 10
Summary data for lawsuits reported by attorneys .......................................................................... 10
Closed claim and lawsuit statistics are different .............................................................................. 11
Snapshot of the medical professional liability insurance market ........................................ 12
Impact of COVID-19 ............................................................................................................................ 12
Market participants ............................................................................................................................. 13
Loss history........................................................................................................................................... 15
Lower claim reserves ........................................................................................................................... 18
Washington state market in 2020...................................................................................................... 19
National market in 2020 ..................................................................................................................... 20
Information about medical malpractice claims ...................................................................... 22
Related claims ...................................................................................................................................... 23
Lawsuit status ...................................................................................................................................... 24
Method of settlement ......................................................................................................................... 25
Size of indemnity payments ............................................................................................................... 26
Claim duration ..................................................................................................................................... 27
Type of reporting entity ..................................................................................................................... 28
Medical Malpractice Annual Report | October 2021
3
Injury outcome..................................................................................................................................... 29
Type of health care organization ....................................................................................................... 31
Location within the facility ................................................................................................................. 32
Type of medical provider .................................................................................................................... 33
Claim allegations ................................................................................................................................. 36
Counties ................................................................................................................................................ 40
Age of claimant .................................................................................................................................... 41
Gender of claimant .............................................................................................................................. 42
Trends ................................................................................................................................................... 43
Information about medical malpractice lawsuits ................................................................... 44
How lawsuits were settled .................................................................................................................. 45
Gender of claimant .............................................................................................................................. 46
Age of claimant .................................................................................................................................... 47
Counties ................................................................................................................................................ 48
Report limitations ...................................................................................................................... 49
Appendices .................................................................................................................................. 50
Appendix A: Profitability .................................................................................................................... 51
Appendix B: Reserve development .................................................................................................... 53
Appendix C: Rate filing information ................................................................................................. 54
Appendix D: 2019 NAIC profitability of medical professional liability insurance ........................ 55
Medical Malpractice Annual Report | October 2021
4
About this report
Early in the 2000s, a “hard market” emerged nationally for most types of insurance. During this period,
medical professional liability insurance became expensive and hard to find for many types of medical
providers and facilities.
In 2006, the Legislature enacted comprehensive health care liability reform legislation (2SHB 2292
) to
address a number of concerns, including the cost and availability of medical professional liability
insurance. This law also created reporting requirements for medical malpractice claims that are resolved
and closed, with the intent to collect data to support policy decisions. The Office of the Insurance
Commissioner (OIC) began publishing
annual reports in 2010 that summarize the data.
This is the 12
th
annual report. It includes a snapshot of the medical malpractice marketplace and
summary data for closed claims and lawsuit settlements.
This report has three sections:
1. The current condition of the medical professional liability insurance market.
2. Summary data for closed claims reported by insurers, risk retention groups and self-insurers.
1
3. Summary data for lawsuits reported by attorneys.
1
For simplicity, we will use the term “insurers” when referring to admitted insurers, surplus line insurers and risk
retention groups.
Medical Malpractice Annual Report | October 2021
5
Key statistics
This section includes premium, loss and defense cost data reported by insurers and self-insurers to the
National Association of Insurance Commissioners (NAIC), closed claim data reported by insurers and
self-insurers to the Office of the Insurance Commissioner (OIC), and lawsuit data reported by attorneys
to the OIC.
About the medical professional liability insurance market
• The pure loss ratio
2
for 2020 was 67.3%. This represents a significant reduction from the 78.9%
pure loss ratio for 2019.
• Defense costs were 18.2% of premium for 2020. This represents a significant reduction from the
27.8% defense cost ratio for 2019.
• Following a large increase in 2019, direct written premiums decreased by 2.7% to $186 million in
2020.
• Favorable loss development fueled profitability. Insurers lowered their reserves for older claims,
leading to lower incurred loss and defense costs in recent years.
3
For example, Physicians
Insurance lowered its reserves by $143 million over its original estimates. Reserves released from
prior years translate to profit for the current year.
• Profitability continued declining. The operating ratio for Physicians Insurance, the admitted
insurer with the largest market share in Washington, was 105.5% in 2020, compared to 91.4% for
the prior five years.
4
2
Pure loss ratio means incurred losses divided by direct earned premium. Incurred losses include paid claims and
the change in reserves for pending and unknown claims. A pure loss ratio does not include defense and cost
containment expenses, which are a significant part of the cost to resolve claims.
3
Claim reserves are money set aside to meet future payments associated with claims incurred but not settled on a
given date. If a claim reserve is too high or an investigation shows there is no legal responsibility to pay the claim,
the insurer either lowers the reserve or removes the claim reserve from its books. If an insurer lowers total claim
reserves for past years, incurred losses are lower in the current year.
4
Operating ratios measure overall profitability from underwriting and investment activities. Operating ratios are
calculated using countrywide data.
Medical Malpractice Annual Report | October 2021
6
About claim data submitted by insurers and self-insurers
Total claims
Insurers and self-insurers reported closing 3,833 claims between 2016 and 2020 with indemnity
payments, defense costs, or both types of payments.
5
6
Commercial insurers reported 2,293 claims, self-
insured entities reported 1,491 claims, and risk retention groups reported 49 claims.
7
Payments to claimants
Insurers and self-insurers closed 45% of all claims with an indemnity payment to a claimant.
• Indemnity payments totaled $754 million on 1,726 claims over the five-year period, or $437,040
per paid claim. The median indemnity payment for the five-year period was $85,000.
• Economic loss payments totaled $520 million, an average of $301,213 per paid claim. On
average, insurers and self-insurers attributed 68.9% of each claim payment to economic loss.
• Of the claims closed with an indemnity payment, 11.8% closed with a payment of $1 million or
more. These claims account for 68.9% of total paid indemnity over the five-year period.
Defense costs
Insurers and self-insurers paid $246 million to defend 3,375 claims, an average of $72,971 per claim.
Average defense costs increased during the five-year period, reaching a high of $96,951 in 2020.
Method of settlement
Insurers and self-insurers settled most claims with paid indemnity by negotiation between the claimant
and the insurer. For claims with an indemnity payment, insurers and self-insurers settled:
• 68.9% of claims by negotiation, comprising 56% of the total paid indemnity.
• 22.7% of claims by alternative dispute resolution – arbitration, mediation or private trial. These
settlements comprised 38.8% of the total paid indemnity over the five-year period.
5
This report includes claims data reported and edited through April 11, 2021.
6
For simplicity, this report substitutes “defense costs” for the technical phase “defense and cost containment
expenses.” Defense and cost containment expenses are expenses allocated to a specific claim to defend an
insured, including court costs, fees paid to defense attorneys, and fees for expert witnesses. These expenses do
not include the internal costs to operate a claims department.
7
Commercial insurers include both admitted and surplus line insurers.
Medical Malpractice Annual Report | October 2021
7
Payments by type of medical provider
The insurer or self-insurer identified the type of medical provider in 74.4% of the closed claim reports.
8
Claimants made the remaining claims against an organization, not an individual medical provider.
• Nursing resulted in the most closed claims at 402. Of these claims, 259 resulted in paid
indemnity averaging $216,308.
• For physician specialties, family practice had the most claims at 219, with 91 paid claims
resulting in paid indemnity averaging $463,303. Pediatrics had the highest average paid
indemnity at $2.5 million, and the highest average defense cost at $234,219.
Payments and defense costs by age of claim
• The data shows that the longer a claim takes to be settled, the higher the paid claims tend to be.
Claims closed within the first year had average paid indemnity of $109,357. Claims that took at
least four years to settle had average indemnity payments of $993,038.
• Defense costs also increased with the age of the claim. Claims that took less than one year to
close had average defense costs of $9,583. Claims that took at least four years had average
defense costs of $198,706.
Regional comparisons
• King County had the most closed claims with 1,122.
• Pierce County had the highest paid indemnity, averaging $623,774.
Allegations
• “Vicarious liability” was the most common allegation, with 759 claims and 288 indemnity
payments that averaged $619,676.
• “Improper performance” was the second-most common allegation, with 651 claims and 241
indemnity payments that averaged $256,640.
• “Failure to report on patient condition” was the allegation with the highest paid indemnity,
averaging $2 million.
8
Physician specialties, dental specialties and other types of medical providers.
Medical Malpractice Annual Report | October 2021
8
About lawsuits filed and settled by attorneys
If an attorney files a lawsuit to resolve a medical malpractice incident, they should report data about the
lawsuit to the Office of the Insurance Commissioner (OIC) once the litigation is resolved. For settlements
resolved between 2016 and 2020
9
:
Compensation to claimants
Attorneys reported claimants received $151 million in total compensation on 120 claims, an average of
$1.3 million per settlement. Attorney fees were $56 million, an average of $467,352 per reported
settlement. On average, attorney fees were 37.1% of the total compensation paid to the claimant.
How lawsuits settled
Lawsuits settled by negotiations between parties had the highest average paid indemnity at $1.4 million
per lawsuit. Lawsuits resolved by jury verdicts in favor of the plaintiff had the lowest average paid
indemnity at $730,000 per lawsuit.
Gender of claimant
Settlements for male claimants were significantly more costly than settlements for female claimants.
Average indemnity payments to male claimants were 2.4 times higher than payments to female
claimants and average legal expenses were 2.7 times higher.
Age of claimant
Settlements involving claimants 41 to 50 years old had the highest average paid indemnity at $1.7
million and the highest average defense costs at $624,684.
Regional comparisons
King County had the largest number of lawsuits filed, with 54 lawsuits or 42.2% of the statewide total.
Spokane County had the highest average indemnity payment of $1.8 million per settlement.
9
This report includes data reported by attorneys through May 12, 2021.
Medical Malpractice Annual Report | October 2021
9
Introduction
Under chapter 48.140 Revised Code of Washington (RCW), insurers, risk retention groups (collectively
“insurers”) and self-insurers must submit a report to the insurance commissioner every time they close a
medical malpractice claim.
10
Under RCW 7.70.140, attorneys must report aggregate settlement data
from all defendants after they resolve all claims related to a medical malpractice lawsuit. This report
includes data submitted by insurers, self-insurers and attorneys in summary form that protects the
confidentiality of people and organizations involved in the claim or settlement process.
11
Insurers, self-insurers and attorneys must report claim data for the prior year to the Office of the
Insurance Commissioner (OIC) by March 1 each year.
12
Attorneys’ compliance with the reporting law has
been low, and the Insurance Commissioner does not have enforcement mechanisms to improve
compliance.
13
As a result, this report provides very few summary exhibits for settlement data reported
by attorneys, since the data is incomplete. Most of the exhibits in this report focus on data reported by
insurers and self-insurers.
14
This report has three sections:
Market analysis
This section is an overview of the medical professional liability insurance market in Washington and
around the country that includes:
• An analysis of the profitability of the largest authorized medical malpractice insurers in
Washington.
• Information about premiums, incurred losses and defense costs for medical professional liability
insurance.
10
A risk retention group (RRG) is an owner-controlled insurance company authorized by the Federal Risk
Retention Act of 1986. An RRG provides liability insurance to members who are in similar or related business or
activities. The federal act allows one state to charter an RRG and allows the RRG to engage in the business of
insurance in all states. The federal act pre-empts state law in many significant ways. See RCW 49.92.030(1). For
simplicity, and to protect the confidentiality of data, we include them with all other insurers in this report.
11
RCW 48.140.040(3) says the OIC must take steps to protect the confidentiality of claim data, and RCW
48.140.060 required the OIC to adopt rules to achieve this result.
12
See RCW 48.140.020(2) and WAC 284-24E-090.
13
In 2010, the OIC proposed legislation, which the Legislature did not enact, that would have added enforcement
mechanisms to the existing law. These bills were introduced as SB 6412 and HB 2963.
14
RCW 48.140.050 lists information that must be provided by this report.
Medical Malpractice Annual Report | October 2021
10
Summary data for closed claims reported by insurers, risk
retention groups and self-insurers
Insurers and self-insurers report claims with an indemnity payment and/or defense costs.
15
16
Each
closed claim report is associated with one defendant.
17
Claims can be made for a variety of allegations.
People can make allegations against an organization, a medical provider or both.
Insurers and self-insurers reported three primary types of closed claim data:
1. Defense costs: These are expenses paid to defend claims, and include expenses allocated to a
specific claim, such as court costs and fees paid to defense attorneys or expert witnesses. They
do not include internal costs to settle claims, such as salaries for claims staff or operating
overhead for a claims department.
18
2. Economic damages: Most of these amounts are estimates of the claimant’s economic damages
made by the insurer or self-insurer when it makes a payment to settle the claim.
19
In a few cases,
a court itemized economic damages when it issued a verdict.
3. Paid indemnity: The amount the insurer or self-insurer paid to the claimant to resolve the claim.
Summary data for lawsuits reported by attorneys
If an attorney files a lawsuit alleging medical malpractice, the attorney must report data after the lawsuit
is resolved. Many attorneys, however, do not comply with RCW 7.70.140, so data in this report is
incomplete. Therefore, this section of the report is less detailed than the closed claim section.
Attorneys reported two primary types of settlement data:
1. Total paid indemnity: Total compensation paid by all defendants to the claimant. Indemnity
payments may come from several defendants if a lawsuit named more than one party.
20
2. Legal expenses: All sums paid by the claimant to the attorney, including attorney fees, expert
witness fees, court costs and all other legal expenses.
21
22
15
RCW 48.140.010(1) defines a claim.
16
Under WAC 284-24D-060, if an insurer or self-insurer closes a claim without an indemnity payment or defense
costs, it is not required to report the claim to the OIC.
17
RCW 48.140.010(3) defines a closed claim.
18
See WAC 284-24D-020(1), WAC 284-24D-330 and WAC 284-24D-340.
19
See RCW 4.56.250(1)(a), WAC 284-24D-350, WAC 284-24D-360, WAC 284-24D-362, WAC 284-24D-364, and
WAC 284-24D-370.
20
WAC 284-24E-150.
21
Attorney fees for legal representation are generally contingent fees that are payable if indemnity payments are
made by one or more defendants.
22
RCW 7.70.140(2)(b)(v).
Medical Malpractice Annual Report | October 2021
11
Closed claim and lawsuit statistics are different
One cannot compare data reported by insurers and self-insurers to the data reported by attorneys
because insurers and self-insurers:
• Report all closed claims if the insurer or self-insurer makes payments or incurs expenses to
defend the claim. Attorneys report data only if they filed a lawsuit against one or more
defendants.
• Report data separately for each defendant. Attorneys submit one final settlement report that
includes payments made by all defendants they sued.
• Insurers, self-insurers and risk retention groups are more diligent in reporting closed claim data.
Example: If an attorney sues several medical providers for their actions related to an incident with a poor
medical outcome, some providers may resolve the litigation early, while others may be involved in the
dispute resolution process for years. Insurers and self-insurers report claims as they resolve the claims
against their customers, while an attorney waits until claims against all defendants are resolved to report
the settlement.
Medical Malpractice Annual Report | October 2021
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Snapshot of the medical professional
liability insurance market
This is an overview of the medical malpractice market in Washington primarily using calendar year
premium and loss data from the National Association of Insurance Commissioners (NAIC).
Impact of COVID-19
Because a significant portion of medical malpractice claims develop slowly over the course of multiple
years, the full impact of the COVID-19 pandemic cannot be determined at this time. However, the
pandemic is expected to impact the market in a variety of ways.
In the short term, the pandemic caused a reduction in claim frequency due to temporary bans on
elective procedures and other nonessential care. As shown on the chart on page 14, the resulting
decrease in health care utilization appears to have delayed the market premium growth that began in
2019. Owing to temporary court closures, the pandemic has also slowed the pace at which high-value
claims are closed. These reductions are expected to reverse over time now that elective procedures
have resumed and court backlogs are beginning to unwind. However, the full extent of this reversal
cannot be predicted at this time, partly because some elective procedures may have been cancelled
rather than delayed and because the economic impact of the pandemic may pressure some claimants
to settle out of court for unfavorable amounts.
23
24
In future years, we may see an increase in claim frequency due to diagnosing and treating patients with
COVID-19. However, such claims could be mitigated by the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, which limits liability for unpaid health care volunteers for harm caused to patients
relating to the diagnosis, prevention, and treatment of COVID-19.
25
We may also see claims relating to
failure to protect patients from exposure to the virus, and denial of care by health care facilities that
were overwhelmed during the early stages of the pandemic.
Additional uncertainty arose due to the rapid expansion of telemedicine during the pandemic. Security
breaches and other Health Insurance Portability and Accountability (HIPPA) concerns are inherent risks
in virtual care. Moreover, it is widely believed that in-person visits are superior for diagnosing serious
medical conditions. Issues such as communication problems, lack of continuity, and unfamiliarity with a
patient’s medical history could increase the probability of misdiagnosis in a virtual setting.
26
23
https://www.fmglaw.com/business-litigation/changes-in-the-landscape-of-civil-litigation-in-the-covid-19-era/
24
https://www.americanbar.org/groups/litigation/committees/solo-small-firm/articles/2021/winter2021-why-
early-settlement-should-be-considered-during-the-pandemic/
25
https://www.jw.com/news/insights-cares-act-healthcare-provisions-covid19/
26
Best’s Market Segment Report – Continued Uncertainty Clouds the Horizon for MPL Insurers (May 12, 2021).
Medical Malpractice Annual Report | October 2021
13
Market participants
The medical professional liability insurance market has three primary participants:
1. Admitted insurers regulated by the insurance commissioner.
2. Unregulated surplus line insurers.
3. Risk retention groups regulated by their home state.
In 2000, admitted insurers wrote 95.4% of medical professional liability insurance premiums in
Washington state. Physicians Insurance Group led the market with 52.7% of the admitted market share
and 50.3% of total market share.
27
In 2020, admitted insurers wrote only 64.8% of premium, and the
remainder of the market was written by surplus line insurers and risk retention groups. Physicians
Insurance still had more than half of the admitted market share at 61.7%, but its share of the overall
market was much lower, at 40%.
Medical professional liability insurance has been a profitable line of business for insurers in Washington,
but profits have declined in recent years. For Physicians Insurance, the operating ratio for 2011-2015
was 87.5%, compared to its 2016-2020 ratio of 95.1%, and reached a high of 105.5% in 2020. As shown
in Appendix C, Physicians Insurance recently addressed this deterioration by filing rate increases for two
of its programs.
27
In 2000, Physicians Insurance Group sold insurance through three companies: Physicians Insurance, A Mutual
Company; Western Professional Insurance Company; and Northwest Dentists Insurance Company. Western
Professional Insurance Company is no longer actively writing insurance, and a group including the ODS
Companies and the Washington State Dental Association purchased Northwest Dentists Insurance Company in
2007.
Medical Malpractice Annual Report | October 2021
14
This chart shows the distribution of written premiums for each segment of the medical professional
liability insurance market.
$-
$50
$100
$150
$200
$250
$300
Direct written premium Millions
Premiums by Market Segment
Admitted insurer Surplus lines RRG
Medical Malpractice Annual Report | October 2021
15
Loss history
After increasing significantly to 106.7% in 2019, the overall incurred loss and defense cost ratio for
medical professional liability insurance in Washington decreased to 85.6% in 2020. The following table
shows data for the total market, which includes admitted insurers, surplus line insurers and risk
retention groups.
Year
Direct written
premium
Direct earned
premium
Direct incurred
losses
Pure
loss
Direct
incurred
defense costs
Incurred losses
& defense
costs
Incurred
loss &
defense
cost
ratio
2001
$140,929,627
$134,008,616
$112,729,787
84.1%
$32,745,710
$145,475,497
108.6%
2002
$198,969,671
$181,843,628
$164,372,251
90.4%
$43,275,166
$207,647,417
114.2%
2003
$240,251,605
$234,439,488
$149,126,311
63.6%
$40,242,563
$189,368,874
80.8%
2004
$270,352,631
$258,075,781
$139,822,747
54.2%
$36,610,655
$176,433,402
68.4%
2005
$263,090,674
$258,403,214
$118,070,079
45.7%
$45,446,560
$163,516,639
63.3%
2006
$254,759,071
$253,104,467
$98,628,303
39.0%
$39,005,295
$137,633,598
54.4%
2007
$239,959,432
$241,654,054
$92,960,987
38.5%
$35,676,308
$128,637,295
53.2%
2008
$214,357,164
$218,726,595
$85,445,904
39.1%
$36,841,513
$122,287,417
55.9%
2009
$200,445,437
$202,466,303
$62,633,183
30.9%
$34,721,641
$97,354,824
48.1%
2010
$204,786,151
$199,165,328
$70,634,175
35.5%
$17,701,695
$88,335,870
44.4%
2011
$203,869,400
$201,195,699
$69,646,648
34.6%
$36,923,847
$106,570,495
53.0%
2012
$201,288,240
$193,926,182
$69,871,999
36.0%
$39,070,682
$108,942,681
56.2%
2013
$188,761,301
$187,007,042
$86,745,683
46.4%
$32,432,507
$119,178,190
63.7%
2014
$176,091,879
$182,705,913
$125,854,675
68.9%
$40,501,079
$166,355,754
91.1%
2015
$160,752,756
$164,616,659
$71,518,739
43.4%
$37,195,911
$108,714,650
66.0%
2016
$156,825,836
$158,126,354
$76,761,700
48.5%
$25,678,427
$102,440,127
64.8%
2017
$163,187,482
$157,522,013
$109,863,807
69.7%
$38,378,783
$148,242,590
94.1%
2018
$161,729,313
$164,641,866
$86,829,886
52.7%
$25,828,741
$112,658,627
68.4%
2019
$191,108,177
$192,612,461
$151,898,275
78.9%
$53,535,200
$205,433,475
106.7%
2020
$186,040,296
$176,978,799
$119,193,320
67.3%
$32,261,953
$151,455,273
85.6%
Total
$4,017,556,143
$3,961,220,462
$2,062,608,459
52.1%
$724,074,236
$2,786,682,695
70.3%
Medical Malpractice Annual Report | October 2021
16
This chart shows statewide industry incurred losses and defense costs by calendar year.
$0
$25
$50
$75
$100
$125
$150
$175
$200
$225
Millions
Incurred Losses and Defense Costs
Direct incurred losses Direct incurred defense costs
Medical Malpractice Annual Report | October 2021
17
This chart compares loss and defense cost ratios for Physicians Insurance, The Doctors Company and
Medical Protective Company to industrywide data obtained from A.M. Best.
28
The Doctors Company
and Medical Protective Company are two of the largest writers of medical professional liability
insurance in the United States. The loss and defense cost ratio for Physicians Insurance continues to be
a bit higher than for the market overall.
28
Best’s Market Segment Report – Continued Uncertainty Clouds the Horizon for MPL Insurers (May 12, 2021)
0
25
50
75
100
2016 2017 2018 2019 2020
Loss and Loss Adjustment Expense Ratios
Physicians Insurance The Doctors Company
Medical Protective AM Best Industry Composite
Medical Malpractice Annual Report | October 2021
18
Lower claim reserves
Incurred losses and defense costs reported to the NAIC by Physicians Insurance, The Doctors Company,
and The Medical Protective Company show generally favorable loss development trends. Loss
development is the change in the estimated cost of a particular group of claims between the beginning
and end of a period in time. Favorable loss development means losses and defense costs decreased
from the beginning to the end of the period.
29
Reserves released from prior years translate into profit
for the current year.
Appendix B shows data from the 2020 annual statement for Physicians Insurance.
30
This table shows the
change in incurred loss and defense cost reserves over time. Overall, Physicians Insurance had favorable
incurred loss development and returned some of its profits to policyholders in the form of dividends
totaling $50 million from 2011 to 2020.
Appendix B also shows development for The Doctors Company and Medical Protective Company. Loss
development was also generally favorable for both companies.
29
Insurers compile the first estimate of incurred losses three months after the end of the year. Medical malpractice
claims often take a long time to resolve and the first estimate of incurred losses may be very inaccurate and
subject to revisions in later years. There will be changes to total incurred losses from one period to the next, as
more claims are paid and the insurer revises reserves for other claims using new information. “Loss development”
is the technical term for the change in incurred losses from period to period.
30
Consolidated data from Schedule P, part 2, sections 1 and 2 for medical professional liability occurrence and
claims made policies written in all states. Washington-specific information is not available.
Medical Malpractice Annual Report | October 2021
19
Washington state market in 2020
Physicians Insurance dominates the admitted medical professional liability insurance market in
Washington. The Doctors Company and Medical Protective are also important participants in the
market due to both their premium volume and their strong position in the national medical professional
liability marketplace. Premiums written by Physicians Insurance best indicate the profitability of this type
of insurance in Washington state, whereas premiums written by The Doctors Company and Medical
Protective Company indicate profitability nationwide.
2020 direct written premiums (millions)
Insurer
Washington
Nationwide
WA % of
Nationwide
Physicians Insurance
$74.4
$95.0
78.3%
The Doctors Company
$9.5
$634.3
1.5%
Medical Protective Company
$6.2
$619.9
1.0%
This table shows the 10 largest admitted writers in Washington in 2020.
Admitted insurer
Washington
direct
written
premiums
(millions)
Admitted
market
share
Physicians Insurance
$74.4
61.7%
The Doctors Co.
$9.5
7.9%
Medical Protective Co.
$6.2
5.1%
ProSelect Insurance Co.
$5.5
4.6%
American Casualty Co. of Reading, PA
$4.7
3.9%
Dentists Insurance Co.
$4.5
3.7%
NCMIC Insurance Co.
$2.7
2.3%
Church Mutual Insurance Co. SI
$2.1
1.8%
Aspen American Insurance Co.
$2.0
1.6%
ProAssurance Insurance Co. of America
$1.7
1.4%
All other admitted insurers
$7.3
6.0%
Total
$120.6
100.0%
Medical Malpractice Annual Report | October 2021
20
National market in 2020
Appendix A shows the profitability for Physicians Insurance, The Doctors Company and Medical
Protective Company for the 10-year period ending Dec. 31, 2020 using two ratios:
• The operating ratio, which is the combined ratio minus the net investment income ratio.
31
32
• The combined ratio, which is the sum of the expense ratio, loss ratio, and dividend ratio.
33
34
35
This table summarizes overall profitability by operating ratios.
36
Operating ratios for Physicians
Insurance and Medical Protective Company increased significantly over the last year.
Operating ratio
Year
Physicians
Insurance
The Doctors
Company
Medical
Protective
Company
2011
86.2%
61.6%
41.9%
2012
86.2%
76.8%
65.8%
2013
89.7%
83.8%
42.6%
2014
85.7%
102.7%
128.5%
2015
89.5%
98.1%
37.2%
2016
90.6%
101.6%
49.3%
2017
88.7%
93.6%
46.7%
2018
90.8%
95.7%
47.9%
2019
96.0%
99.3%
48.8%
2020
105.5%
94.1%
60.9%
31
The operating ratio measures a company’s overall operational profitability from underwriting and investment
activities. If an operating ratio is below 100%, the company is making a profit from its underwriting and
investment activities.
32
The net investment income ratio is calculated by dividing net investment income by net earned premiums.
33
The expense ratio is calculated by dividing incurred underwriting expenses by net written premiums.
34
The loss ratio is calculated by dividing losses and defense costs by net earned premiums.
35
The dividend ratio is calculated by dividing policyholder dividends by net earned premiums.
36
Loss portfolio transfers between Medical Protective and its affiliates distorted its operating ratios in 2012, 2014,
and 2015.
Medical Malpractice Annual Report | October 2021
21
This chart compares combined ratios from Physicians Insurance, The Doctors Company and Medical
Protective Company to cumulative data obtained from A.M. Best.
37
38
37
Best’s Market Segment Report – Continued Uncertainty Clouds the Horizon for MPL Insurers (May 12, 2021)
38
The combined ratio measures how well an insurance company is performing in its daily operations. A ratio
below 100% means the company is making an underwriting profit. A company can make an operating profit if the
combined ratio is above 100%, because the ratio does not include investment income.
0
50
100
150
2016 2017 2018 2019 2020
Combined Ratios
Physicians Insurance The Doctors Company
Medical Protective AM Best Industry Composite
Medical Malpractice Annual Report | October 2021
22
Information about medical malpractice
claims
Year closed
2016
2017
2018
2019
2020
Claims closed
898
814
834
677
610
Number of indemnity payments
391
361
412
302
260
Paid indemnity
$110,088,350
$119,624,942
$186,978,969
$186,438,929
$151,199,179
Average indemnity payment
$281,556
$331,371
$453,832
$617,347
$581,535
Median indemnity payment
$75,000
$35,000
$100,000
$117,500
$125,000
Economic loss
$76,913,851
$84,214,632
$110,899,936
$152,520,859
$95,344,378
Average economic loss
$196,711
$233,282
$269,175
$505,036
$366,709
Median economic loss
$45,000
$20,000
$44,600
$82,500
$75,000
Number of claims with defense costs
804
681
720
607
563
Defense costs
$52,597,149
$42,198,930
$51,770,661
$45,127,091
$54,583,427
Average defense cost
$65,419
$61,966
$71,904
$74,344
$96,951
Median defense cost
$16,645
$14,108
$15,170
$22,003
$16,231
From 2016 through 2020, insurers and self-insurers paid $754 million on 1,726 claims, or $437,040 per
paid claim.
39
The total economic loss was $520 million, or $301,213 per paid claim. On average, insurers
and self-insurers attributed 68.9% of indemnity payments to economic loss.
Claims reported by insurers and self-insurers included defense costs 88.1% of the time. Insurers and
self-insurers paid $246 million to defend 3,375 claims, or an average defense cost of $72,971 per claim.
The table above shows the annual average defense cost has increased since 2017 and increased by
30.4% from 2019 to 2020. However, the median defense cost decreased by 26.2% from 2019 to 2020.
39
These amounts differ from what we reported in prior reports, because reporting entities can edit their data. For
example, a reporting entity can re-open a claim, make additional payments, and edit the report to show it closed a
year later than earlier reported.
Medical Malpractice Annual Report | October 2021
23
Related claims
Insurers and self-insurers identified medical incidents for which they defended more than one claim.
This happens if a claimant alleges more than one medical provider or facility is responsible for their
injury and the insurer covers both parties. About half of the 1,375 reported multiclaim incidents resulted
in indemnity payments. From 2008
40
to 2020, the aggregate average indemnity payment per incident
was $654,168, which is 2.2 times the average per-claim indemnity payment for the same period.
Often, related claims from a single incident are resolved at the different times, so there can be a lag
between the insurer’s or self-insurer’s first claim report related to an incident and its final report that
closes the series of related claims. This means average indemnity payments at the incident level will
increase over time as additional claims related to previously reported incidents are resolved.
40
Because claims related to the same incident can be closed on different dates, this discussion of incident-level
information uses all available closed claim data, which insurers started reporting to the OIC in 2008. The remainder
of our analysis of closed claim data uses information related to claims closed between 2016 and 2020.
Medical Malpractice Annual Report | October 2021
24
Lawsuit status
This table summarizes litigation data.
41
Five-year period ending December 31, 2020
Lawsuit status
Number
of claims
Claims
with paid
indemnity
Paid
indemnity
Average paid
indemnity
Claims with
defense costs
Defense
costs
Average
defense cost
Lawsuit filed
2,079
849
$623,463,817
$734,351
2,067
$208,604,284
$100,921
No lawsuit filed
1,754
877
$130,866,552
$149,221
1,308
$37,672,974
$28,802
Total
3,833
1,726
$754,330,369
$437,040
3,375
$246,277,258
$72,971
Of the 3,833 claims reported, claimants filed lawsuits 54.2% of the time. Insurers and self-insurers
incurred defense costs in 99.4% of the claims in which the plaintiff filed a lawsuit. Lawsuits resulted in
indemnity payments 40.8% of the time, whereas 50% of claims without litigation resulted in indemnity
payments.
41
These amounts are not comparable to lawsuit settlement data reported by attorneys. Insurers and self-insurers
report data separately for each defendant. Attorneys submit one settlement report that includes payments made
by all defendants named in the lawsuit.
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
Lawsuit filed No lawsuit filed
Average costs by lawsuit status
Average paid indemnity Average defense cost
Medical Malpractice Annual Report | October 2021
25
Method of settlement
Five-year period ending December 31, 2020
Method of settlement
Number
Claims
with paid
indemnity
Paid
indemnity
Average
paid
indemnity
Claims
with
defense
costs
Defense
costs
Average
defense
costs
Settled by parties
1,374
1,189
$422,161,625
$355,056
1,025
$98,806,070
$96,396
Abandoned by claimant
1,243
123
$460,087
$3,741
1,142
$26,366,518
$23,088
Court disposed claim
766
23
$38,981,157
$1,694,833
766
$69,143,389
$90,266
Alternative dispute resolution
450
391
$292,727,500
$748,664
442
$51,961,281
$117,559
Total
3,833
1,726
$754,330,369
$437,040
3,375
$246,277,258
$72,971
Plaintiff verdicts or judgments were few in number. Insurers and self-insurers reported 22 claims
resolved by plaintiff verdict or judgment, 20 of which resulted in an indemnity payment averaging $1.9
million.
42
The courts ruled in favor of defendants in the vast majority of cases.
42
In cases where a lawsuit has more than one defendant, some defendants may not be responsible to compensate
the claimant.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Number of claims Total paid indemnity Total defense costs
Distributions by Method of Settlement
Settled by parties Abandoned by claimant
Court disposed claim Alternative dispute resolution
Medical Malpractice Annual Report | October 2021
26
Size of indemnity payments
This table shows that insurers and self-insurers settled 55% of claims without making an indemnity
payment, and 55.3% of the remaining claims had indemnity payments of $100,000 or less.
Five-year period ending December 31, 2020
Range of paid indemnity
Number of
claims
% of claims
Paid
Indemnity
% of paid
Average paid
indemnity
$0
2,107
55.0%
$1 - $100,000
954
24.9%
$27,757,875
3.7%
$29,096
$100,001 - $200,000
183
4.8%
$28,809,447
3.8%
$157,429
$200,001 - $300,000
117
3.1%
$29,657,157
3.9%
$253,480
$300,001 - $400,000
70
1.8%
$25,537,132
3.4%
$364,816
$400,001 - $500,000
78
2.0%
$37,414,970
5.0%
$479,679
$500,001 - $600,000
36
0.9%
$20,653,628
2.7%
$573,712
$600,001 - $700,000
30
0.8%
$19,790,000
2.6%
$659,667
$700,001 - $800,000
29
0.8%
$21,971,876
2.9%
$757,651
$800,001 - $900,000
19
0.5%
$16,441,771
2.2%
$865,356
$900,001 - $999,999
7
0.2%
$6,690,000
0.9%
$955,714
$1 million or more
203
5.3%
$519,606,513
68.9%
$2,559,638
Total
3,833
100.0%
$754,330,369
100.0%
$437,040
This next table shows how defense costs are related to the size of the indemnity payment.
Five-year period ending December 31, 2020
Range of paid indemnity
Number of
claims with
defense costs
% of total
claims with
defense costs
Defense costs
% of total
defense costs
Average
defense cost
$0
2,107
62.4%
$98,760,065
40.1%
$46,872
$1 - $100,000
528
15.6%
$22,433,541
9.1%
$42,488
$100,001 - $200,000
169
5.0%
$13,849,580
5.6%
$81,950
$200,001 - $300,000
113
3.3%
$9,821,317
4.0%
$86,914
$300,001 - $400,000
69
2.0%
$7,538,889
3.1%
$109,259
$400,001 - $500,000
74
2.2%
$8,877,351
3.6%
$119,964
$500,001 - $600,000
36
1.1%
$7,698,637
3.1%
$213,851
$600,001 - $700,000
28
0.8%
$3,442,354
1.4%
$122,941
$700,001 - $800,000
28
0.8%
$3,894,821
1.6%
$139,101
$800,001 - $900,000
19
0.6%
$2,238,347
0.9%
$117,808
$900,001 - $999,999
7
0.2%
$1,600,944
0.7%
$228,706
$1 million or more
197
5.8%
$66,121,412
26.8%
$335,642
Total
3,375
100.0%
$246,277,258
100.0%
$72,971
Medical Malpractice Annual Report | October 2021
27
Claim duration
This table shows claims by age on the date they were closed. Average indemnity and average defense
costs tend to increase with the age of the claim.
Five-year period ending December 31, 2020
Notice date
to closed date
Number
of claims
% of
total
claims
Claims
with paid
indemnity
Paid
indemnity
Average paid
indemnity
Claims
with
defense
costs
Defense costs
Average
defense
costs
0-12 months
1,221
31.9%
517
$56,537,613
$109,357
901
$8,634,549
$9,583
12-24 months
1,210
31.6%
503
$227,336,705
$451,962
1,142
$53,946,452
$47,239
24-36 months
722
18.8%
393
$210,334,485
$535,202
666
$76,247,867
$114,486
36-48 months
333
8.7%
155
$103,221,493
$665,945
325
$39,689,718
$122,122
48-60 months
170
4.4%
81
$54,260,822
$669,887
169
$19,132,425
$113,210
60-72 months
82
2.1%
39
$29,367,582
$753,015
81
$20,075,110
$247,841
Over 72 months
95
2.5%
38
$73,271,669
$1,928,202
91
$28,551,137
$313,749
Total
3,833
100.0%
1,726
$754,330,369
$437,040
3,375
$246,277,258
$72,971
For the 3,833 claims, the average length of time between the notice date and the date closed was 23
months and the median length of time was 18.1 months. Insurers and self-insurers closed 82.3% of all
claims within 36 months. Overall, claims closed within 36 months account for 65.5% of total paid
indemnity and 56.4% of total defense costs.
$0
$500
$1,000
$1,500
$2,000
$2,500
$0
$50,000
$100,000
$150,000
$200,000
$250,000
0-12
months
12-24
months
24-36
months
36-48
months
48-60
months
60-72
months
Over 72
months
Average paid indemnity (thousands)
Total paid indemnity (thousands)
Number of months claims were open
Indemnity Payments by Claim Duration
Paid indemnity Average paid indemnity
Medical Malpractice Annual Report | October 2021
28
Type of reporting entity
Commercial insurers reported the highest number of claims and had the highest average paid
indemnity.
43
Risk retention groups reported the highest average defense costs.
Five-year period ending December 31, 2020
Reporting entity
Number
of claims
Claims
with paid
indemnity
Paid
indemnity
Average paid
indemnity
Claims
with
defense
Defense costs
Average
defense
costs
Commercial insurer
2,293
817
$369,795,813
$452,626
2,175
$152,949,785
$70,322
Self-insured organization
1,491
885
$377,352,806
$426,387
1,154
$89,698,012
$77,728
Risk retention group
49
24
$7,181,750
$299,240
46
$3,629,461
$78,901
Total
3,833
1,726
$754,330,369
$437,040
3,375
$246,277,258
$72,971
43
Commercial insurers include admitted (licensed) and surplus line insurers.
0.0%
15.0%
30.0%
45.0%
60.0%
75.0%
% of total claims % of total paid indemnity % of total defense costs
Distributions by reporting entity
Commercial insurer Self-insured organization Risk retention group
Medical Malpractice Annual Report | October 2021
29
Injury outcome
This exhibit shows compensation and defense costs by severity of injury.
44
Injuries were most often
classified as minor and temporary, but these claims comprised only 3.5% of total paid indemnity and
9.1% of total defense costs. Grave permanent injuries
45
had the highest average paid indemnity and
average defense costs, followed by major permanent injuries in both respects.
Five-year period ending December 31, 2020
Injury outcome
Number
of claims
Claims
with paid
indemnity
Paid
indemnity
Average
paid
indemnity
Claims
with
defense
Defense
costs
Average
defense
costs
Emotional injury only
264
93
$9,148,567
$98,372
228
$7,529,564
$33,024
Insignificant injury
242
69
$859,593
$12,458
196
$2,854,937
$14,566
Minor temporary injury
1,025
501
$26,134,281
$52,164
774
$22,429,703
$28,979
Major temporary injury
536
269
$54,147,892
$201,293
472
$25,441,479
$53,901
Minor permanent injury
340
130
$33,912,513
$260,865
315
$16,854,413
$53,506
Significant permanent injury
358
147
$90,994,404
$619,010
349
$26,269,324
$75,270
Major permanent injury
280
146
$177,700,432
$1,217,126
274
$39,200,542
$143,068
Grave permanent injury
132
70
$169,985,606
$2,428,366
129
$22,721,383
$176,135
Death
656
301
$191,447,081
$636,037
638
$82,975,913
$130,056
Total
3,833
1,726
$754,330,369
$437,040
3,375
$246,277,258
$72,971
44
For a description of each type of injury outcome, see WAC 284-24D-220.
45
Grave permanent injuries include quadriplegia and severe brain damage, requiring lifelong dependent care.
0.0%
10.0%
20.0%
30.0%
40.0%
Distributions by Severity of Injury
% of total paid indemnity % of total defense costs % of total claims
Medical Malpractice Annual Report | October 2021
30
If they made an indemnity payment, insurers and self-insurers reported the economic loss related to the
injury.
46
The insurer or self-insurer either estimated the economic loss or reported the amount of
economic loss awarded by a court. Patient death claims had lower average economic loss than claims
for significant permanent injury, major permanent injury, or grave permanent injury. If a patient dies,
compensation for economic loss is largely calculated based on lost income and services the patient
would have provided. This chart shows the relationship between injury outcome, average paid
indemnity and average economic loss.
46
Economic damages are defined in RCW 4.56.250, and the components of economic losses are described in WAC
284-24D-360.
0
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
1,750,000
2,000,000
2,250,000
2,500,000
Average Economic Loss and Indemnity by
Severity of Injury
Average economic loss Average indemnity payment
Medical Malpractice Annual Report | October 2021
31
Type of health care organization
This exhibit shows data segmented by the type of health care organization or provider group.
47
Five-year period ending December 31, 2020
Health care organization
Number
of
claims
Claims
with paid
Paid indemnity
Average
paid
indemnity
Claims
with
defense
costs
Defense
costs
Average
defense
costs
General or acute care hospital
1,687
864
$480,532,284
$556,172
1,421
$121,459,630
$85,475
Medical group or practice
1,208
420
$160,043,354
$381,056
1,129
$67,388,878
$59,689
Dental group or practice
302
140
$10,410,537
$74,361
248
$7,563,677
$30,499
Nursing or skilled nursing facility
100
73
$21,285,962
$291,589
90
$5,142,427
$57,138
Local or state correctional facility
91
28
$4,468,048
$159,573
82
$21,948,653
$267,666
Podiatric group or practice
46
14
$2,574,990
$183,928
46
$3,107,596
$67,556
Ambulatory surgical center
43
15
$6,360,000
$424,000
41
$2,548,271
$62,153
Chiropractic group or practice
35
18
$5,250,500
$291,694
35
$2,308,922
$65,969
Ambulatory clinic or center
20
10
$7,443,116
$744,312
20
$935,878
$46,794
Physical/occupational therapy
20
10
$535,775
$53,578
19
$463,199
$24,379
All other organizations
281
134
$55,425,803
$413,625
244
$13,410,127
$54,960
Total
3,833
1,726
$754,330,369
$437,040
3,375
$246,277,258
$72,971
47
Under RCW 48.140.060 and RCW 42.56.400(10), the Insurance Commissioner must protect the identify of each
insuring entity, self-insurer, claimant, health care provider, or health care facility involved in a particular claim or
collection of claims. For this reason, types of organizations with few claims are grouped together.
0.0%
15.0%
30.0%
45.0%
60.0%
75.0%
General or
acute care
hospital
Medical group
or practice
Dental group
or practice
Nursing or
skilled nursing
facility
Local or state
correctional
facility
All other
Distributions by Type of Health Care
Organization
% of total paid indemnity % of total defense costs % of total claims
Medical Malpractice Annual Report | October 2021
32
Location within the facility
This exhibit shows data by location within the facility where the incident leading to the claim occurred.
Five-year period ending December 31, 2020
Location within facility
Number
of claims
Claims
with paid
indemnity
Paid
indemnity
Average paid
indemnity
Claims
with
defense
costs
Defense costs
Average
defense
costs
Operating room
874
366
$151,513,401
$413,971
779
$50,378,477
$64,671
Office
755
246
$106,337,914
$432,268
726
$44,246,099
$60,945
Emergency department
492
206
$96,848,229
$470,137
445
$31,304,106
$70,346
Patient room
469
268
$92,213,757
$344,081
405
$28,516,793
$70,412
Outpatient department
246
138
$48,194,379
$349,235
189
$9,315,115
$49,286
Other - not an inpatient facility
191
71
$24,825,361
$349,653
176
$7,227,994
$41,068
Labor or delivery room
187
94
$103,473,648
$1,100,783
173
$26,668,482
$154,153
Special procedure room
129
78
$5,689,384
$72,941
77
$3,293,309
$42,770
Radiology department
103
45
$19,336,079
$429,691
86
$4,180,387
$48,609
Walk-in clinic
72
40
$16,112,521
$402,813
58
$3,178,095
$54,795
Laboratory
49
33
$34,365,973
$1,041,393
36
$1,940,678
$53,908
Physical therapy department
38
23
$2,170,012
$94,348
36
$1,679,713
$46,659
Critical care unit
38
21
$11,785,605
$561,219
34
$2,489,778
$73,229
All other locations
190
97
$41,464,106
$427,465
155
$31,858,232
$205,537
Total
3,833
1,726
$754,330,369
$437,040
3,375
$246,277,258
$72,971
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Operating
room
Office Emergency
department
Patient
room
Outpatient
department
Other - not
an
inpatient
facility
Labor or
delivery
room
Special
procedure
room
Radiology
department
All other
Distributions by Location in Facility
% of total paid indemnity % of total defense costs % of total claims
Medical Malpractice Annual Report | October 2021
33
Type of medical provider
This exhibit shows data by type of medical provider. The “physician” specialty includes surgeons,
general practice physicians, radiologists, neurologists, psychiatrists, and many more. The “other type of
medical provider” category includes nursing, physician assistants, technicians, pharmacy, podiatry and
psychology, among others.
Five-year period ending December 31, 2020
Provider type
Number
of
claims
Claims
with paid
indemnity
Paid
indemnity
Average
paid
indemnity
Claims
with
defense
costs
Defense costs
Average
defense
cost
Physician specialty
1,833
724
$382,427,882
$528,215
1,696
$141,056,790
$83,170
Claim against an organization
983
441
$255,042,624
$578,328
863
$67,707,155
$78,456
Other type of medical provider
713
417
$105,516,806
$253,038
566
$29,722,386
$52,513
Dental specialty
304
144
$11,343,057
$78,771
250
$7,790,927
$31,164
Total
3,833
1,726
$754,330,369
$437,040
3,375
$246,277,258
$72,971
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Physician Specialty Claim Against an
Organization
Other type of Medical
Provider
Dental Specialty
Distributions by Type of Provider
% of total paid indemnity % of total defense costs % of total claims
Medical Malpractice Annual Report | October 2021
34
This table shows claim data for physician specialties that had the largest number of claims.
48
Five-year period ending December 31, 2020
Provider specialty
Number
of
claims
Claims
with paid
indemnity
Paid
indemnity
Average
paid
indemnity
Claims
with
defense
costs
Defense
costs
Average
defense
cost
Family practice
219
91
$42,160,608
$463,303
196
$15,105,735
$77,070
Obstetrics and gynecology
208
93
$48,299,107
$519,345
196
$22,315,014
$113,852
Emergency medicine
206
70
$25,720,900
$367,441
190
$13,154,166
$69,232
General surgery
198
87
$34,750,732
$399,434
185
$13,451,293
$72,710
Orthopedic surgery
170
59
$17,611,007
$298,492
156
$14,051,287
$90,072
Radiology
123
41
$23,383,869
$570,338
118
$7,915,190
$67,078
Internal medicine
95
28
$13,761,647
$491,487
90
$6,180,175
$68,669
Anesthesiology
91
55
$12,312,214
$223,858
64
$5,300,666
$82,823
Neurological surgery
79
32
$53,190,661
$1,662,208
78
$8,203,405
$105,172
Hospitalist
46
17
$13,700,000
$805,882
46
$3,344,201
$72,700
Urological surgery
46
21
$6,676,377
$317,923
43
$1,915,006
$44,535
Cardiovascular diseases
44
21
$6,587,549
$313,693
40
$3,952,715
$98,818
Gastroenterology
43
10
$4,543,265
$454,326
40
$2,383,181
$59,580
Pediatrics
38
12
$30,282,525
$2,523,544
34
$7,963,450
$234,219
Otolaryngology
25
12
$4,416,500
$368,042
25
$2,351,004
$94,040
Neurology
20
11
$6,635,275
$603,207
20
$2,915,800
$145,790
Diagnostic radiology
16
10
$4,305,093
$430,509
15
$663,424
$44,228
All other physician types
166
54
$34,090,553
$631,307
160
$9,891,078
$61,819
Total
1,833
724
$382,427,882
$528,215
1,696
$141,056,790
$83,170
The largest number of claims against physician specialties were for family practice. The most common
allegations against family practice physicians were “failure to diagnose” with 58 claims, “delay in
diagnosis” with 25 claims, and “improper management” with 21 claims.
Pediatrics ranked highest among specialties in average paid indemnity and average defense costs. The
most common allegation against pediatrics was “failure to diagnose” with nine claims.
48
Under RCW 48.140.060 and RCW 42.56.400(10), some specialties are grouped together to maintain
confidentiality.
Medical Malpractice Annual Report | October 2021
35
This table shows claim data for other types of medical providers.
49
Nursing staff accounted for the
majority of these claims. The most common allegations against nursing staff were “failure to ensure
patient safety” with 43 claims, followed by “failure to monitor” with 39 claims, and “improper technique”
with 36 claims. Physician assistants had the second-highest number of claims, and the most common
allegation against this type was “failure to diagnose” with 17 claims.
Five-year period ending December 31, 2020
Provider type
Number
of
claims
Claims
with paid
Paid
indemnity
Average
paid
Claims with
defense
costs
Defense
costs
Average
defense cost
Nursing
402
259
$56,023,824
$216,308
304
$15,429,783
$50,756
Physician assistant
82
40
$13,301,290
$332,532
68
$3,458,260
$50,857
Podiatry
55
17
$3,772,490
$221,911
55
$3,583,621
$65,157
Chiropractic
35
17
$5,215,500
$306,794
35
$2,246,537
$64,187
Physical therapy
24
14
$1,180,487
$84,321
22
$1,236,327
$56,197
Emergency medicine
20
10
$3,481,294
$348,129
15
$524,545
$34,970
All other types
95
60
$22,541,921
$375,699
67
$3,243,313
$48,408
Total
713
417
$105,516,806
$253,038
566
$29,722,386
$52,513
49
Under RCW 48.140.060 and RCW 42.56.400(10), some types of providers are grouped together to maintain
confidentiality.
Medical Malpractice Annual Report | October 2021
36
Claim allegations
Insurers and self-insurers identified the primary complaint that led to the medical malpractice claim.
This table shows the most common classes of allegations.
Five-year period ending December 31, 2020
Allegation group
Number
of
claims
Claims
with paid
indemnity
Paid
indemnity
Average
paid
indemnity
Claims
with
defense
costs
Defense
costs
Average
defense
cost
Error / improper performance
1,556
720
$247,958,800
$344,387
1,337
$89,719,027
$67,105
Behavior / legal
1,005
430
$211,639,458
$492,185
888
$48,520,890
$54,641
Failure to take appropriate action
736
320
$170,011,450
$531,286
692
$74,277,142
$107,337
Delay in performance
214
93
$40,347,888
$433,848
186
$14,724,861
$79,166
Communication / supervision
204
121
$73,568,587
$608,005
169
$10,295,433
$60,920
Continuity of care / care management
64
21
$6,859,858
$326,660
54
$4,445,790
$82,329
Other class of allegation
54
21
$3,944,328
$187,825
49
$4,294,115
$87,635
Total
3,833
1,726
$754,330,369
$437,040
3,375
$246,277,258
$72,971
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Distributions by allegation group
% of total paid indemnity % of total defense costs % of claims
Medical Malpractice Annual Report | October 2021
37
This table shows the most common specific allegations for each major class of allegation.
Five-year period ending December 31, 2020
Error / improper performance
Total
number
of claims
Claims
with paid
indemnity
Total paid
indemnity
Average
paid
indemnity
Claims
with
defense
costs
Total
defense
costs
Average
defense
cost
Improper performance
651
241
$61,850,330
$256,640
599
$33,385,212
$55,735
Improper management
203
90
$55,139,726
$612,664
185
$16,811,541
$90,873
Improper technique
202
127
$39,053,692
$307,509
146
$8,792,125
$60,220
Patient history, exam, or workup problem
69
24
$8,189,030
$341,210
63
$3,364,182
$53,400
Surgical or other foreign body retained
46
29
$2,577,808
$88,890
39
$1,385,960
$35,537
Patient monitoring problem
37
24
$10,940,266
$455,844
33
$2,265,764
$68,660
Wrong medication administered
30
16
$688,038
$43,002
22
$603,285
$27,422
Wrong dosage administered
29
13
$19,261,371
$1,481,644
28
$2,858,684
$102,096
Equipment utilization problem
28
20
$1,719,026
$85,951
20
$1,004,088
$50,204
Wrong diagnosis or misdiagnosis
24
12
$11,907,773
$992,314
22
$1,427,941
$64,906
Intubation problem
21
12
$6,436,211
$536,351
16
$1,951,398
$121,962
Behavior / legal
Vicarious liability
759
288
$178,466,684
$619,676
671
$37,165,020
$55,388
Failure to ensure patient safety
125
89
$23,346,705
$262,323
106
$4,792,405
$45,211
Sexual misconduct
15
11
$1,555,000
$141,364
15
$984,262
$65,617
Failure to take appropriate action
Failure to diagnose
415
171
$87,516,461
$511,792
394
$32,023,129
$81,277
Failure to treat
98
34
$9,184,180
$270,123
95
$6,463,837
$68,040
Failure to monitor
85
54
$20,520,231
$380,004
76
$25,165,954
$331,131
Failure to recognize a complication
36
17
$11,090,371
$652,375
33
$2,193,669
$66,475
Failure to order appropriate test
28
12
$8,508,589
$709,049
24
$1,374,154
$57,256
Delay in performance
Delay in diagnosis
108
43
$25,521,718
$593,528
105
$8,413,363
$80,127
Delay in treatment
79
41
$9,609,126
$234,369
56
$2,994,861
$53,480
Communication / supervision
Failure to instruct or communicate w/patient
77
39
$27,773,716
$712,147
60
$2,927,396
$48,790
Communication problem between practitioners
48
30
$10,928,243
$364,275
36
$2,550,907
$70,859
Improper supervision
34
25
$12,549,927
$501,997
31
$2,502,950
$80,740
Failure to supervise
19
12
$2,083,847
$173,654
18
$810,520
$45,029
Failure to report on patient condition
16
10
$19,692,500
$1,969,250
16
$1,425,524
$89,095
Continuity of care / care management
Premature discharge from institution
21
10
$2,087,595
$208,760
16
$2,243,620
$140,226
Medical Malpractice Annual Report | October 2021
38
This table shows the most common allegations against physician specialties.
Five-year period ending December 31, 2020
Allegation made against physician specialty
Total
number
of
claims
Claims
with paid
indemnity
Total paid
indemnity
Average
paid
indemnity
Claims
with
defense
costs
Total
defense
costs
Average
defense
cost
Failure to diagnose
358
147
$77,141,154
$524,770
342
$29,430,906
$86,055
Improper performance
345
116
$49,377,808
$425,671
326
$23,047,387
$70,698
Improper technique
135
74
$34,958,953
$472,418
104
$6,076,093
$58,424
Improper management
132
48
$47,024,263
$979,672
129
$14,156,902
$109,743
Delay in diagnosis
84
30
$21,384,218
$712,807
82
$7,413,744
$90,412
Failure to instruct or communicate w/patient
59
28
$4,757,328
$169,905
49
$2,328,982
$47,530
Failure to treat
54
17
$5,746,105
$338,006
52
$5,305,303
$102,025
Patient history, exam or workup problem
53
15
$6,411,997
$427,466
51
$2,957,115
$57,983
Delay in treatment
38
12
$6,021,810
$501,818
36
$2,564,568
$71,238
Surgical or other foreign body retained
38
22
$2,387,136
$108,506
35
$1,358,082
$38,802
Failure to recognize a complication
27
10
$8,805,326
$880,533
25
$1,821,518
$72,861
Unnecessary procedure
20
11
$2,755,000
$250,455
19
$1,719,024
$90,475
Communication problem between practitioners
19
10
$7,994,714
$799,471
16
$944,911
$59,057
Wrong diagnosis
18
11
$11,589,773
$1,053,616
16
$1,175,344
$73,459
This table shows the most common allegations made against dental specialties.
Five-year period ending December 31, 2020
Allegation made against dental provider
Total
number
of
claims
Claims
with paid
indemnity
Total paid
indemnity
Average
paid
indemnity
Claims
with
defense
costs
Total
defense
costs
Average
defense
cost
Improper performance
205
81
$6,898,408
$85,166
184
$5,297,336
$28,790
Improper technique
13
11
$1,089,000
$99,000
12
$906,835
$75,570
Medical Malpractice Annual Report | October 2021
39
This table shows the most common allegations made against other types of medical providers.
Five-year period ending December 31, 2020
Allegation made against
other type of provider
Total
number
of
claims
Claims
with paid
indemnity
Total paid
indemnity
Average
paid
indemnity
Claims
with
defense
costs
Total
defense
costs
Average
defense
cost
Improper performance
99
42
$5,500,752
$130,970
88
$5,023,407
$57,084
Failure to ensure patient safety
55
37
$6,231,074
$168,407
46
$1,626,460
$35,358
Improper technique
54
42
$3,005,739
$71,565
30
$1,809,197
$60,307
Failure to diagnose
51
23
$10,351,557
$450,068
46
$2,319,345
$50,421
Failure to monitor
42
31
$13,070,040
$421,614
37
$2,992,072
$80,867
Improper management
38
23
$2,819,392
$122,582
33
$1,182,420
$35,831
Failure to treat
27
11
$2,355,575
$214,143
26
$813,923
$31,305
Communication problem between practitioners
22
16
$2,321,476
$145,092
14
$1,160,233
$82,874
Patient monitoring problem
19
13
$4,264,575
$328,044
18
$1,212,372
$67,354
Delay in diagnosis
19
11
$4,050,000
$368,182
18
$891,072
$49,504
This table shows the most common allegations made against an organization. The most common
allegation, “vicarious liability,” is secondary liability in which the organization becomes responsible for
the acts of an employee or another third party when it had the right, ability or duty to control those
actions.
Five-year period ending December 31, 2020
Allegation made against an organization
Total
number
of
claims
Claims
with paid
indemnity
Total paid
indemnity
Average
paid
indemnity
Claims
with
defense
costs
Total
defense
costs
Average
defense
cost
Vicarious liability
725
283
$178,369,797
$630,282
638
$36,197,437
$56,736
Failure to ensure patient safety
59
47
$16,672,191
$354,727
51
$2,722,062
$53,374
Improper supervision
26
21
$11,674,874
$555,946
24
$1,912,840
$79,702
Failure to monitor
19
13
$2,830,751
$217,750
16
$20,206,073
$1,262,880
Failure to supervise
15
10
$2,057,347
$205,735
14
$740,272
$52,877
Medical Malpractice Annual Report | October 2021
40
Counties
Insurers and self-insurers reported the county where the medical incident occurred.
50
To provide
information about differences by location, we divided the state into 10 regions.
51
A few claims were
reported as occurring outside of Washington state (not shown).
Five-year period ending December 31, 2020
Region
Number
of claims
Claims
with paid
indemnity
Paid
indemnity
Average
paid
indemnity
Average
economic
loss
Claims
with
defense
Defense
costs
Average
defense
costs
King
1,122
558
$290,925,791
$521,372
$363,278
922
$88,415,789
$95,896
Pierce
468
226
$140,972,895
$623,774
$386,788
414
$38,887,512
$93,931
Spokane
445
174
$47,636,985
$273,776
$228,371
391
$27,106,561
$69,326
Puget Sound Metro
313
120
$57,590,919
$479,924
$396,927
293
$21,526,309
$73,469
Yakima-Tri Cities
291
117
$30,225,972
$258,342
$206,640
271
$8,159,456
$30,109
East Balance
272
123
$46,118,704
$374,949
$242,831
242
$9,783,922
$40,429
Clark
249
124
$52,464,352
$423,100
$276,545
220
$15,369,314
$69,861
Snohomish
231
90
$25,407,905
$282,310
$221,148
213
$11,180,543
$52,491
West Balance
228
96
$24,126,308
$251,316
$126,130
213
$10,399,825
$48,825
North Sound
204
95
$38,121,519
$401,279
$224,372
186
$14,296,252
$76,862
50
Under RCW 48.140.060 and RCW 42.56.400(10), some counties are grouped together to maintain confidentiality.
51
Yakima-Tri Cities includes Benton, Franklin and Yakima counties. East balance includes Adams, Asotin, Chelan,
Columbia, Douglas, Ferry, Garfield, Grant, Kittitas, Lincoln, Okanogan, Pend Oreille, Stevens, Walla Walla and
Whitman counties. Puget Sound Metro includes Kitsap and Thurston counties. West balance includes Clallam,
Cowlitz, Grays Harbor, Jefferson, Klickitat, Lewis, Mason, Pacific, Skamania and Wahkiakum counties. North Sound
includes Island, San Juan, Skagit and Whatcom counties.
0.0%
10.0%
20.0%
30.0%
40.0%
Distributions by Region
% of total paid indemnity % of total defense costs % of claims
Medical Malpractice Annual Report | October 2021
41
Age of claimant
Insurers and self-insurers reported the age group of the claimant.
Five-year period ending December 31, 2020
Age group
Total
number
of claims
Claims
with paid
indemnity
Average
paid
indemnity
Average
economic
loss
Claims
with
defense
costs
Average
defense
cost
Newborn
150
67
$1,393,391
$1,244,736
141
$194,946
Infant less than 1 year
46
27
$2,081,591
$1,968,295
40
$150,026
1-10
65
34
$1,099,625
$890,023
53
$74,749
11-20
114
63
$648,142
$581,229
85
$66,091
21-30
316
145
$459,114
$223,969
271
$141,945
31-40
527
222
$361,995
$232,562
467
$67,415
41-50
621
255
$430,962
$300,222
558
$59,466
51-60
838
320
$322,471
$231,082
753
$61,378
61-70
653
327
$350,499
$189,135
578
$52,833
71-80
311
148
$212,703
$81,380
275
$47,288
81-90
161
98
$174,725
$62,481
130
$68,876
over 90
31
20
$165,677
$94,642
24
$56,824
Total
3,833
1,726
$437,040
$301,213
3,375
$72,971
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
Payment Averages by Age Group
Average paid indemnity Average economic loss
Medical Malpractice Annual Report | October 2021
42
Gender of claimant
This exhibit shows data by gender. For a few claims, the gender was reported as unknown (not shown).
Five-year period ending December 31, 2020
Gender
Total
number
of
claims
Claims
with paid
indemnity
Total paid
indemnity
Average
paid
indemnity
Average
economic
loss
Claims
with
defense
costs
Total
defense
costs
Average
defense
costs
Female
2,109
964
$352,317,742
$365,475
$229,546
1,839
$126,033,761
$68,534
Male
1,714
761
$401,812,627
$528,006
$392,131
1,526
$119,671,101
$78,421
The following charts show how injury outcomes
52
and claimant ages were distributed by gender.
52
See page 29 for a more detailed breakdown of the injury outcome categories.
Medical Malpractice Annual Report | October 2021
43
Trends
This chart shows estimates of trends in frequency and severity.
53
Average claim costs continued to
increase.
Year closed
Average paid
indemnity
Average
limited
indemnity
Average
defense costs
Average of
limited
indemnity +
defense costs
Number of
claims closed
2011
$215,145
$174,386
$40,930
$113,385
1,207
2012
$169,887
$144,012
$50,081
$113,480
1,182
2013
$231,292
$179,372
$47,612
$127,190
1,126
2014
$269,353
$236,575
$58,177
$156,593
1,044
2015
$379,443
$222,156
$65,487
$147,684
1,020
2016
$281,556
$219,297
$65,419
$154,056
898
2017
$331,371
$195,488
$61,966
$138,538
814
2018
$453,832
$275,128
$71,904
$197,990
834
2019
$617,347
$285,945
$74,344
$194,213
677
2020
$581,535
$314,229
$96,951
$223,415
610
Annual trend
14.0%
7.3%
8.1%
7.4%
-7.2%
Average limited indemnity amounts were calculated by restricting individual claims to a maximum of $1
million, which is a way to reduce volatility in the trend estimate. The estimated trend in the number of
claims closed is low due to late-reported claims; there will likely be more claims than the 610 already
reported for 2020.
These trends in medical malpractice insurance costs are not reliable estimates of changes over time for
several reasons. Medical malpractice claims can take several years to close and the averages shown for
each closed-year include data from incidents that occurred over many years. Thus, trends estimated
using closed-year data can be distorted by changes in claim settlement rates. Because of these
distortions, the trend in the number of claims closed is a poor estimate of frequency trend. A frequency
is calculated as the number of claims per exposure (e.g., per policy or per physician). Since insurers do
not report policy counts, physician counts or other exposure data, we cannot calculate a true frequency
trend. These trend estimates could also be distorted by changes in data reporting compliance over
time.
53
An analysis of trends in frequency and severity is required by RCW 48.140.050(1)(a)(i). Trends shown are based
on exponential least squares regression.
Medical Malpractice Annual Report | October 2021
44
Information about medical malpractice
lawsuits
This section of the report presents data submitted by plaintiffs’ attorneys following the resolution of
lawsuits filed against health care providers and facilities.
Year settled
2016
2017
2018
2019
2020
Settlements reported by attorneys
42
34
31
12
9
Number of settlements with paid indemnity
40
31
31
9
9
Total paid indemnity
$61,564,825
$27,239,000
$42,872,870
$7,890,000
$11,670,000
Average payment to claimant
$1,539,121
$878,677
$1,382,996
$876,667
$1,296,667
Median payment to claimant
$450,000
$475,000
$750,000
$500,000
$650,000
Total legal expenses
$25,273,923
$11,347,914
$18,714,718
$3,540,712
$4,687,136
Total attorney fees
$22,847,061
$9,520,746
$16,574,797
$2,915,485
$4,224,181
Average legal expense
$601,760
$333,762
$603,701
$295,059
$520,793
Average fee paid to attorney
$571,177
$307,121
$534,671
$323,498
$469,353
From January 1, 2016 through December 31, 2020, claimants received $151 million in compensation on
120 settlements, averaging $1.3 million per settlement.
Claimants paid $64 million for legal expenses, averaging $496,597 per lawsuit. Claimants paid $56
million in attorney fees, or an average of $467,352 per settlement.
54
On average, the attorney fee was
37.1% of the total compensation paid to the claimant.
The average indemnity payment per settlement reported by attorneys was much higher than the
average indemnity payment reported by insurers on a per-defendant basis. Per-lawsuit averages are
expected to be higher than per-defendant averages, since settlements reported by attorneys can
involve multiple defendants. Averages reported by attorneys may be biased high; attorneys might be
less likely to report data to the OIC for lawsuits resulting in small indemnity payments.
54
Attorneys in this area of litigation typically work on a contingency basis, and receive fees if one or more
defendants compensate the claimant.
Medical Malpractice Annual Report | October 2021
45
How lawsuits were settled
This exhibit shows data segmented by lawsuit settlement method.
Five-year period ending December 31, 2020
Lawsuit settlement method
Average
legal
expense paid
by claimant
Average paid
indemnity to
claimant
Attorney
fees per
settlement
with
indemnity
Attorney fee
as % of
indemnity
Settled by parties
$574,987
$1,373,600
$512,303
37.3%
Alternative dispute resolution
$441,803
$1,114,389
$407,019
36.5%
Verdicts
$203,218
$730,000
$292,200
40.0%
$0
$300,000
$600,000
$900,000
$1,200,000
$1,500,000
Settled by parties Alternative dispute resolution Verdicts
Average costs by settlement method
Average legal expense paid by claimant
Average paid indemnity to claimant
Attorney fees per settlement with indemnity
Medical Malpractice Annual Report | October 2021
46
Gender of claimant
More settlements involved female claimants: 53.1% compared to 46.9% with male claimants.
Five-year period ending December 31, 2020
Gender
Settlements
with legal
fees
Total legal
fees
Average
legal
expense
paid by
claimant
Settlements
with paid
indemnity
Total paid
indemnity
Average
indemnity
paid to
claimant
Female
68
$18,728,206
$275,415
61
$45,099,195
$739,331
Male
60
$44,836,197
$747,270
59
$106,137,500
$1,798,941
Total
128
$63,564,403
$496,597
120
$151,236,695
$1,260,306
$0
$400,000
$800,000
$1,200,000
$1,600,000
$2,000,000
Female Male
Average costs by gender
Average legal expense paid by claimant Average indemnity paid to claimant
Medical Malpractice Annual Report | October 2021
47
Age of claimant
This exhibit shows data segmented by the age of the claimant.
Five-year period ending December 31, 2020
Age group
Settlements
with legal
expenses
Total legal
expenses
Average legal
expenses
Settlements
with paid
indemnity
Total paid
indemnity
Average paid
indemnity
Ages 0-20
15
$8,158,568
$543,905
15
$19,630,000
$1,308,667
Ages 21-30
9
$2,993,209
$332,579
9
$7,580,000
$842,222
Ages 31-40
16
$5,652,641
$353,290
16
$15,058,000
$941,125
Ages 41-50
23
$14,367,737
$624,684
20
$34,158,162
$1,707,908
Ages 51-60
18
$11,239,016
$624,390
16
$24,477,500
$1,529,844
Ages 61-70
24
$13,300,064
$554,169
24
$32,663,033
$1,360,960
Over 70
23
$7,853,168
$341,442
20
$17,670,000
$883,500
Total
128
$63,564,403
$496,597
120
$151,236,695
$1,260,306
$0
$400,000
$800,000
$1,200,000
$1,600,000
$2,000,000
Ages 0-20 Ages 21-30 Ages 31-40 Ages 41-50 Ages 51-60 Ages 61-70 Over 70
Average costs by age of claimant
Average legal expenses Average paid indemnity
Medical Malpractice Annual Report | October 2021
48
Counties
Attorneys reported settlement data by county where the medical incident occurred. To provide
meaningful information regarding differences by location, we divided the state into eight regions.
55
Five-year period ending December 31, 2020
Region
Settlements
with legal
expenses
Total legal
expenses
Average legal
expense
Settlements
with paid
indemnity
Total paid
indemnity
Average paid
indemnity
King
54
$37,319,292
$691,098
52
$87,423,370
$1,681,219
Clark
15
$2,834,955
$188,997
14
$7,356,163
$525,440
Puget Sound Metro
11
$5,391,169
$490,106
10
$13,655,000
$1,365,500
Yakima-Tri Cities
11
$1,735,138
$157,740
11
$3,950,000
$359,091
Pierce
10
$4,524,595
$452,460
10
$10,227,162
$1,022,716
Spokane
9
$4,795,320
$532,813
7
$12,375,000
$1,767,857
Snohomish
8
$5,498,406
$687,301
8
$13,050,000
$1,631,250
Remainder of state
10
$1,465,528
$146,553
8
$3,200,000
$400,000
Total
128
$63,564,403
$496,597
120
$151,236,695
$1,260,306
55
Under RCW 48.140.060 and RCW 42.56.400(10), some counties are grouped together to maintain confidentiality.
Yakima-Tri Cities includes Benton, Franklin and Yakima counties. Puget Sound Metro includes Kitsap and
Thurston counties.
$0
$400,000
$800,000
$1,200,000
$1,600,000
$2,000,000
King Clark Puget
Sound
Metro
Yakima-Tri
Cities
Pierce Spokane Snohomish Remainder
of state
Average costs by region
Average legal expense Average paid indemnity
Medical Malpractice Annual Report | October 2021
49
Report limitations
Analysis based on historical closed claim data has multiple limitations:
1. There is a natural mismatch between premiums and losses used to calculate loss ratios and
profitability ratios for commercial insurers. Premiums used for loss ratios are earned during the
calendar year, but the amounts booked as incurred loss during the same calendar year are from
claims from various accident years. As a result, most losses do not correspond to the same
policies that the premium comes from.
2. Claims are reported based on the year in which they reach final resolution. Some arose from
recent medical incidents, but many arose from incidents that occurred several years prior.
3. This report contains claims that closed during a limited period.
4. The Office of the Insurance Commissioner (OIC) cannot use data in this report to evaluate past
or current medical professional liability insurance rates. Insurers develop medical malpractice
rates using an analysis of open and closed claims, and develop rates based on an estimate of
expected future claim costs and expenses.
5. In producing this report, the OIC relied upon data submitted by insurers, self-insurers, and
attorneys. Data may contain anomalies. The OIC audits data and has adopted administrative
rules that contain data definitions and reporting instructions, but the accuracy of the report still
depends largely on the accuracy of the data reported by others. People who report data may
interpret data fields differently or make errors.
6. The OIC did not adjust the data for economic differences occurring during the report period,
such as inflation and the cost of medical care.
7. Insurers and self-insurers do not report policy limits, so the report does not analyze the data by
type of policy, whether coverage is primary or excess, limits of coverage, or size of deductibles
or retentions to determine if coverage limits affect the frequency or severity of claims.
8. Insurers and self-insurers reported data separately for each defendant. This reporting method
may overstate the frequency of “incidents” and understate the severity of an “incident,” but it
reduces inconsistencies and inaccuracies by limiting the amount of incomplete reporting.
9. This report analyzes only closed claims. Any claims that are still open, such as claims that are in
settlement negotiations or on trial, are not included in this study. The analysis of closed claim
information is valuable; however, open claims information may be more indicative of the current
claims environment. For example, the impact of recent legislation or judicial decisions will not be
reflected in a closed claim database.
10. Although insurers and self-insurers report data only after the claim has been closed, they
occasionally re-open claims that were previously closed. Amounts reported may not be the true,
ultimate amounts.
Medical Malpractice Annual Report | October 2021
50
Appendices
Medical Malpractice Annual Report | October 2021
51
Appendix A: Profitability
Physicians Insurance, a Mutual Company
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Year
Net premium
written
Net premium
earned
Underwriting
expense ratio
Loss and LAE
ratio
Dividend ratio
Combined
ratio
[c+d+e]
Net
investment
income ratio
Operating
ratio
[f-g]
2011
73,321,941
70,370,781
15.3%
82.7%
7.2%
105.1%
19.0%
86.2%
2012
67,765,626
65,640,184
17.9%
80.0%
7.7%
105.7%
19.4%
86.2%
2013
72,889,552
69,671,138
16.9%
85.2%
7.3%
109.3%
19.6%
89.7%
2014
76,701,101
75,121,138
16.6%
82.1%
6.7%
105.5%
19.8%
85.7%
2015
76,301,471
71,271,073
18.9%
84.4%
7.0%
110.3%
20.8%
89.5%
2016
78,240,313
78,437,989
20.9%
82.2%
6.4%
109.5%
18.8%
90.6%
2017
81,130,272
79,275,075
19.9%
81.0%
6.3%
107.3%
18.5%
88.7%
2018
94,256,910
93,442,936
20.5%
81.0%
5.4%
106.9%
16.1%
90.8%
2019
110,476,767
104,381,324
20.4%
88.5%
4.8%
113.7%
17.6%
96.0%
2020
115,217,227
109,632,385
26.4%
85.9%
4.6%
116.8%
11.3%
105.5%
Total
846,301,180
817,244,023
19.8%
83.6%
6.2%
109.5%
17.7%
91.8%
Five-year period-to-period results
2011-2015
366,979,691
352,074,314
17.1%
82.9%
7.2%
107.2%
19.7%
87.5%
2016-2020
479,321,489
465,169,709
21.9%
84.0%
5.4%
111.3%
16.2%
95.1%
Medical Malpractice Annual Report | October 2021
52
The Doctors Company, an Interinsurance Exchange
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Year
Net premium
written
Net premium
earned
Underwriting
expense ratio
Loss and LAE
ratio
Dividend ratio
Combined
ratio
[c+d+e]
Net
investment
income ratio
Operating
ratio
[f-g]
2011
564,467,114
536,671,691
21.4%
63.0%
3.3%
87.7%
26.1%
61.6%
2012
596,528,843
584,386,263
19.8%
69.1%
3.2%
92.1%
15.3%
76.8%
2013
675,729,455
641,792,914
21.2%
75.1%
3.1%
99.4%
15.5%
83.8%
2014
644,037,543
659,903,069
23.1%
78.3%
2.8%
104.2%
1.4%
102.7%
2015
622,861,093
628,266,492
24.2%
74.5%
3.8%
102.5%
4.4%
98.1%
2016
602,359,134
610,408,597
25.0%
77.7%
4.6%
107.3%
5.7%
101.6%
2017
595,891,924
600,702,260
24.9%
77.0%
3.8%
105.7%
12.0%
93.6%
2018
620,395,036
620,335,603
25.3%
85.7%
2.2%
113.2%
17.5%
95.7%
2019
627,555,678
623,780,051
28.2%
81.0%
1.4%
110.7%
11.3%
99.3%
2020
654,774,790
652,428,039
28.2%
73.6%
0.1%
101.9%
7.8%
94.1%
Total
6,204,600,610
6,158,674,979
24.2%
75.7%
2.8%
102.7%
11.4%
91.2%
Five-year period-to-period results
2011-2015
3,103,624,048
3,051,020,429
22.0%
72.4%
3.2%
97.6%
12.0%
85.6%
2016-2020
3,100,976,562
3,124,757,335
26.4%
79.0%
2.4%
107.7%
10.9%
96.9%
The Medical Protective Company
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Year
Net premium
written
Net premium
earned
Underwriting
expense ratio
Loss and LAE
ratio
Dividend ratio
Combined
ratio
[c+d+e]
Net
investment
income ratio
Operating
ratio
[f-g]
2011
327,172,569
302,854,289
24.6%
48.7%
0.0%
73.3%
31.5%
41.9%
2012
643,824,861
616,894,746
14.9%
71.7%
0.0%
86.6%
20.8%
65.8%
2013
366,900,050
371,799,546
24.1%
51.3%
0.0%
75.3%
32.8%
42.6%
2014
-680,001,929
-575,282,426
-3.1%
114.5%
0.0%
111.5%
-17.0%
128.5%
2015
226,451,495
214,665,128
23.7%
59.5%
0.0%
83.2%
46.1%
37.2%
2016
255,837,377
228,980,322
23.7%
65.0%
0.0%
88.8%
39.5%
49.3%
2017
239,978,122
251,862,659
26.0%
58.0%
0.0%
84.0%
37.2%
46.7%
2018
260,421,768
260,308,096
24.0%
64.2%
0.0%
88.1%
40.2%
47.9%
2019
288,139,624
274,597,913
22.1%
72.5%
0.0%
94.6%
45.7%
48.8%
2020
347,993,367
349,375,371
19.9%
76.9%
0.0%
96.8%
35.9%
60.9%
Total
2,276,717,304
2,296,055,644
28.9%
51.3%
0.0%
80.2%
47.1%
33.1%
Five-year period-to-period results
2011-2015
884,347,046
930,931,283
38.4%
26.7%
0.0%
65.1%
58.2%
6.9%
2016-2020
1,392,370,258
857,057,316
22.9%
68.1%
0.0%
91.0%
39.5%
51.4%
Medical Malpractice Annual Report | October 2021
53
Appendix B: Reserve development
Physicians Insurance, a Mutual Company
Incurred net losses and defense and cost containment expenses ($000 omitted)
Year in
which
losses
occurred
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
One-
year
dev.
Cumulative
dev.
Prior
110,278
93,729
86,893
80,174
72,447
73,106
69,940
71,164
70,924
71,310
386
-38,968
2011
68,571
61,519
54,457
50,314
48,425
47,268
46,997
46,497
45,400
45,083
-317
-23,488
2012
64,479
58,836
60,309
54,902
49,046
48,009
47,525
47,022
46,361
-661
-18,118
2013
65,630
56,757
49,966
44,418
37,641
36,266
35,511
36,066
555
-29,564
2014
65,379
63,625
59,703
55,647
49,941
49,884
48,820
-1,064
-16,559
2015
67,830
64,651
65,694
62,944
64,173
62,406
-1,767
-5,424
2016
66,696
62,982
53,921
52,100
53,946
1,846
-12,750
2017
66,331
68,246
69,232
69,300
68
2,969
2018
72,676
71,001
78,728
7,727
6,052
2019
77,955
70,307
-7,648
-7,648
2020
73,508
Total
-875
-143,498
The Doctors Company, an Interinsurance Exchange
Incurred net losses and defense and cost containment expenses ($000 omitted)
Year in
which
losses
occurred
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
One-
year
dev.
Cumulative
dev.
Prior
531,063
469,938
434,032
382,784
364,135
360,035
356,733
356,506
349,631
349,611
-20
-181,452
2011
402,382
401,470
401,593
398,810
359,691
350,613
350,850
350,954
347,894
339,682
-8,212
-62,700
2012
437,363
421,491
420,738
407,422
369,422
332,719
327,824
322,939
316,038
-6,901
-121,325
2013
478,868
479,267
475,791
475,791
458,008
457,972
433,614
410,681
-22,933
-68,187
2014
523,776
523,475
523,475
520,327
519,162
425,875
394,734
-31,141
-129,042
2015
499,160
499,644
498,925
495,904
483,729
461,959
-21,770
-37,201
2016
467,527
465,811
467,528
499,157
504,310
5,153
36,783
2017
466,642
466,886
490,691
490,901
210
24,259
2018
474,260
496,802
503,509
6,707
29,249
2019
463,018
470,539
7,521
7,521
2020
456,428
Total
-71,386
-502,095
The Medical Protective Company
Incurred net losses and defense and cost containment expenses ($000 omitted)
Year in
which
losses
occurred
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
One-
year
dev.
Cumulative
dev.
Prior
962,616
989,863
871,303
514,225
470,897
443,066
420,519
405,425
401,141
400,014
-1,127
-562,602
2011
282,074
314,451
301,159
169,322
154,949
146,890
136,678
129,861
125,390
126,770
1,380
-155,304
2012
322,195
315,585
163,486
159,471
152,546
135,840
127,642
124,086
124,535
449
-197,660
2013
322,225
157,295
155,514
149,149
139,670
129,103
122,557
121,004
-1,553
-201,221
2014
174,469
177,627
172,179
162,275
153,700
140,992
134,612
-6,380
-39,857
2015
186,030
183,767
175,535
168,667
160,859
152,707
-8,152
-33,323
2016
185,285
184,199
180,654
175,884
175,177
-707
-10,108
2017
187,661
185,686
182,851
186,928
4,077
-733
2018
193,274
193,409
197,958
4,549
4,684
2019
199,180
200,850
1,670
1,670
2020
211,449
Total
-5,794
-1,194,454
Medical Malpractice Annual Report | October 2021
54
Appendix C: Rate filing information
Company
Description
Approved
Change
Filed
Loss & LAE
Trend
Effective
Date
Medical Mutual Ins. Co. of N.C.
Physicians and Surgeons
New Program
0.0%
7/1/2021
Physicians Ins. A Mutual Co.
Hospitals and Employed Physicians
2.1%
0.0%
7/1/2021
ProSelect Ins. Co.
Hospitals
8.0%
2.4%
7/1/2021
Ins. Services Office Inc.
Physicians, Surgeons and Dentists
-20.0%
-2.0%
5/1/2021
Doctors Co. An Interins. Exchange
Physicians, Surgeons, Ancillary Health Care Providers
6.1%
2.0%
1/16/2021
Physicians Ins. A Mutual Co.
Physicians and Surgeons
8.0%
1.5%
1/1/2021
ProAssurance Ins. Co. of America
Chiropractors
17.0%
1.7%
12/1/2020
Cincinnati Ins. Co.
Home Health Care and Health Care Facilities
15.8%
2.5%
9/1/2020
Ins. Services Office Inc.
Physicians, Surgeons and Dentists
-8.1%
0.0%
5/1/2020
MAG Mutual Ins. Co.
Physicians and Surgeons
New Program
0.0%
4/14/2020
Doctors Co. An Interins. Exchange
Physicians, Surgeons, Ancillary Health Care Providers
7.3%
2.0%
1/1/2020
Medical Malpractice Annual Report | October 2021
55
Appendix D: 2019 NAIC profitability of medical professional
liability insurance
Percent of direct premiums earned
Percent of net worth
State
Direct
premiums
earned
(000s)
Losses
incurred
Loss
adjust
expense
Under-
writing
expense
Dividend
to
plcyhldr
Under-
writing
profit
Invest
gain
on ins.
trans.
Tax
on ins.
trans.
Profit
on ins.
trans.
Earned
prem.
to net
worth
Inv.
gain
on net
worth
Tax on
inv.gain
on net
worth
Return
on net
worth
Alabama
124,600
56.5
35.3
20.8
1.4
-13.9
11.3
-1.0
-1.6
47.9
3.7
0.6
2.3
Alaska
25,088
95.5
27.3
22.7
7.8
-53.1
7.8
-9.9
-35.5
61.1
3.7
0.6
-18.6
Arizona
206,247
49.7
25.9
23.1
11.7
-10.3
11.5
-0.2
1.5
45.5
3.8
0.6
3.8
Arkansas
62,990
69.2
32.7
26.5
2.2
-30.4
11.7
-4.4
-14.3
46.8
3.8
0.6
-3.5
California
773,995
62.0
38.3
25.4
1.3
-26.9
10.4
-3.9
-12.6
50.5
3.8
0.6
-3.2
Colorado
151,610
41.2
23.4
21.8
11.2
2.5
10.2
2.2
10.5
50.8
3.7
0.6
8.4
Connecticut
212,417
118.1
31.4
21.2
0.2
-70.8
11.7
-12.9
-46.2
49.0
3.7
0.6
-19.5
Delaware
29,896
46.8
18.1
25.3
0.3
9.5
12.2
4.0
17.6
44.4
3.8
0.6
11.0
District of Columbia
27,208
66.6
28.5
28.0
0.2
-23.3
11.6
-2.9
-8.7
47.6
3.8
0.6
-1.0
Florida
630,400
73.7
25.8
25.4
1.7
-26.4
10.1
-3.9
-12.5
51.8
3.8
0.6
-3.3
Georgia
279,225
90.2
37.4
24.9
4.0
-56.3
13.1
-9.6
-33.6
42.8
3.8
0.6
-11.3
Hawaii
31,048
31.1
20.9
22.8
8.5
16.8
10.8
5.3
22.3
49.3
3.7
0.6
14.1
Idaho
33,659
35.9
27.6
25.7
4.8
6.2
9.8
2.9
13.1
53.0
3.8
0.6
10.1
Illinois
457,995
64.6
37.9
25.4
3.0
-30.7
16.2
-3.7
-10.8
37.0
3.8
0.6
-0.9
Indiana
122,894
42.2
34.4
21.3
0.2
2.0
15.5
3.0
14.5
38.6
3.7
0.6
8.7
Iowa
66,704
91.3
40.5
23.4
1.7
-56.8
12.3
-9.9
-34.6
46.1
3.7
0.6
-12.8
Kansas
66,919
42.9
35.4
25.5
0.8
-4.4
11.8
1.0
6.3
47.7
3.8
0.6
6.1
Kentucky
109,727
76.8
46.9
23.8
1.0
-48.4
17.2
-7.3
-23.9
35.6
3.7
0.6
-5.4
Louisiana
99,495
13.8
29.6
24.0
2.8
29.9
12.2
8.3
33.7
46.1
3.8
0.6
18.7
Maine
46,307
30.2
11.3
20.2
3.0
35.3
11.8
9.4
37.7
46.5
3.7
0.6
20.6
Maryland
289,649
71.9
30.5
22.3
12.5
-37.0
8.8
-6.3
-21.9
57.5
3.7
0.6
-9.5
Massachusetts
334,558
59.0
18.9
21.0
2.2
-1.0
14.9
2.3
11.6
40.7
3.7
0.6
7.8
Michigan
191,737
15.0
25.4
25.0
0.7
34.1
11.3
9.0
36.3
47.7
3.8
0.6
20.5
Minnesota
80,909
59.4
31.8
24.3
0.3
-15.6
9.2
-1.7
-4.7
56.4
3.8
0.6
0.5
Mississippi
45,413
25.1
17.2
24.8
1.1
31.9
10.6
8.5
34.0
50.4
3.8
0.6
20.3
Missouri
150,052
79.3
29.4
22.8
10.2
-41.7
10.4
-7.0
-24.3
51.0
3.7
0.6
-9.2
Montana
43,503
61.5
32.8
27.2
0.9
-22.3
10.1
-3.0
-9.2
53.0
3.8
0.6
-1.7
Nebraska
33,341
62.6
50.2
24.5
0.6
-37.7
15.4
-5.4
-17.0
38.5
3.8
0.6
-3.4
Nevada
71,509
57.1
42.4
28.5
0.3
-28.3
9.9
-4.3
-14.1
52.0
3.8
0.6
-4.2
New Hampshire
45,401
61.2
20.6
26.7
0.7
-9.2
14.3
0.5
4.7
40.6
3.8
0.6
5.0
New Jersey
407,491
52.3
20.8
25.4
0.3
1.3
16.9
3.1
15.1
35.8
3.8
0.6
8.5
New Mexico
58,273
111.9
64.7
25.9
0.9
-103.4
14.1
-19.3
-69.9
41.4
3.8
0.6
-25.8
New York
1,569,296
40.4
27.2
20.8
0.2
11.6
21.7
6.1
27.2
29.8
3.7
0.6
11.2
North Carolina
195,067
44.4
21.8
23.1
3.0
7.8
8.6
3.1
13.3
57.5
3.8
0.6
10.8
North Dakota
11,129
8.5
20.2
27.3
1.6
42.5
9.3
10.5
41.3
54.7
3.8
0.6
25.7
Medical Malpractice Annual Report | October 2021
56
Percent of direct premiums earned
Percent of net worth
State
Direct
premiums
earned
(000s)
Losses
incurred
Loss
adjust
expense
Under-
writing
expense
Dividend
to
plcyhldr
Under-
writing
profit
Invest
gain
on ins.
trans.
Tax
on ins.
trans.
Profit
on ins.
trans.
Earned
prem.
to net
worth
Inv.
gain
on net
worth
Tax on
inv.gain
on net
worth
Return
on net
worth
Ohio
234,541
24.2
19.8
25.9
1.4
28.6
15.1
8.5
35.2
39.0
3.8
0.6
16.8
Oklahoma
97,263
51.2
33.2
25.9
0.2
-10.5
12.8
-0.1
2.4
44.0
3.8
0.6
4.2
Oregon
92,084
97.3
30.8
23.3
1.4
-52.8
9.9
-9.4
-33.4
52.5
3.8
0.6
-14.4
Pennsylvania
697,906
54.8
27.6
20.1
0.2
-2.7
13.8
1.7
9.3
42.7
3.7
0.6
7.1
Rhode Island
30,080
81.1
44.4
23.6
0.2
-49.1
26.5
-5.9
-16.7
25.0
3.7
0.6
-1.1
South Carolina
76,639
60.0
28.9
26.4
3.8
-19.2
13.0
-1.8
-4.3
43.5
3.8
0.6
1.3
South Dakota
15,950
81.4
22.1
28.5
0.2
-32.1
9.6
-5.1
-17.4
54.4
3.8
0.6
-6.3
Tennessee
225,339
70.6
39.0
20.4
2.7
-32.7
15.9
-4.2
-12.5
37.8
3.7
0.6
-1.6
Texas
337,319
48.3
30.6
26.5
0.3
-5.6
10.3
0.5
4.1
51.3
3.8
0.6
5.3
Utah
56,472
54.0
42.5
23.9
2.6
-22.9
12.1
-2.8
-8.0
46.9
3.8
0.6
-0.6
Vermont
16,167
117.2
39.7
36.0
1.8
-94.5
12.8
-17.7
-64.0
43.0
3.9
0.6
-24.3
Virginia
188,541
42.7
17.8
26.6
2.6
10.5
9.9
3.9
16.5
52.5
3.8
0.6
11.8
Washington
192,612
78.8
37.1
22.4
2.6
-40.8
9.8
-6.9
-24.1
54.2
3.7
0.6
-9.9
West Virginia
97,507
57.0
21.3
22.2
3.8
-4.2
7.7
0.4
3.0
64.2
3.7
0.6
5.1
Wisconsin
75,009
48.0
33.9
22.1
0.3
-4.3
12.5
1.2
7.0
45.0
3.7
0.6
6.3
Wyoming
19,407
19.3
16.1
26.7
2.1
35.9
10.9
9.4
37.4
49.8
3.8
0.6
21.8
Guam
852
-26.0
-11.0
29.0
0.1
108.0
9.5
24.3
93.2
53.0
3.8
0.6
52.6
Puerto Rico
68,523
35.3
22.5
25.0
0.0
17.3
9.2
5.2
21.4
55.9
3.8
0.6
15.1
U.S. Virgin Islands
271
-57.1
15.7
35.2
0.7
105.6
5.5
23.1
88.0
74.4
3.9
0.7
68.7
N Mariana Islands
5
68.4
14.2
30.0
0.0
-12.5
8.2
-1.3
-3.1
63.0
3.8
0.6
1.2
Countrywide
9,608,241
56.9
29.6
23.4
2.2
-12.0
13.8
-0.2
2.0
42.0
3.7
0.6
4.0