State of the Insurance Market Report

2024 Initial Outlook:
Healthcare Insurance

Let's Talk

Market Updates

In the first half of 2023, the healthcare industry faced ongoing challenges across coverage lines, with five notable changes from the beginning of the year:

  • Medicaid requalifications restart after PHE: Medicaid suspended all redeterminations during the COVID-19 Public Health Emergency (PHE). This caused Medicaid enrollment to swell by more than 17% during the pandemic. Since the end of the PHE in May, redeterminations resumed, notably increasing in non-Medicaid expansion states. The increase in uninsured patients caused providers to deliver more uncompensated care. Additionally, health plan enrollments declined. If healthier people are the primary source of the drop-off, health plan loss ratios may increase.
  • Industry consolidation drives more at-home and outpatient care: Healthcare is rapidly expanding outside of hospitals. More health care systems are shifting to outpatient services, including physician practices, surgery centers, and at-home care. The National Institute of Health reports that patients receive care in outpatient and alternative settings 89% of the time. Increased M&A activity and joint ventures between healthcare systems and physician practices are driving this trend. Telehealth and other innovative treatment methods are surging, especially as the aging U.S. population increasingly depends on government assistance.
  • Patient volumes improve: Overall patient visits increased in the first half of 2023. Outpatient volumes are growing at a faster rate than inpatient services.
  • Operating margins and revenues trend positive: According to consulting firm Kaufman Hall's latest National Hospital Flash Report, hospital finances are stabilizing due to plateauing labor costs and increased patient volumes. From January to July, operating margins rose from -0.8% to 1.4%, indicating a trend of continued improvement.
  • Court activity ramps up, along with large verdicts: Cases postponed due to COVID-19 are now making their way through the courts, leading to more frequent and severe losses. Notably, in the first quarter of 2023, one carrier that serves healthcare organizations experienced three nuclear verdicts, each upwards of $20 million. As court activity resumes full force, insurers are worried that recurring large verdicts will become an all-too-familiar trend. This would influence rates, pricing, and capacity not only in the medical malpractice space, but also in other areas of the casualty market as well.

Senior woman checking blood pressure

"Hospital finances are stabilizing due to plateauing labor costs and increased patient volumes. From January to July, operating margins rose from -0.8% to 1.4%, indicating a trend of continued improvement."

Coverage Considerations

Since the start of the year, underwriters are more closely scrutinizing the following coverage lines:

  • Property: Healthcare organizations face pressure to increase property values due to inflationary pressures. Hiring an outside appraiser ensures an unbiased property valuation compared to an insurer’s assessment. Capacity is limited for catastrophic exposures and risks with a large concentration of frame construction. To secure sufficient coverage, organizations may need to layer policies from multiple insurers.
  • Cyber: Pixel tracking, also known as web beacon tracking or pixel tags, collects user data from emails and websites. Marketers use this data to personalize advertising. However, healthcare organizations sharing personal data with third parties can violate HIPAA laws. At least one class action lawsuit has been filed on these grounds.

The severity of professional liability claims continues to impact the industry. Some carriers are seeking increases in self-insured retentions and many carriers are cutting back capacity. This, in addition to rate increases, are becoming commonplace for many renewals.

Insurers are taking steps to guarantee healthcare organizations do not violate patient privacy. Expect pixel tracking questions from your carrier at renewal time.

Rate Forecast
Healthcare - Management Liability +5% to +10%
Healthcare - Managed Care E&O: +10 to +15%
Healthcare - Managed Care, Accident & Health Reinsurance: +8% to +20%
Healthcare - Physician Medical Malpractice: Up to +15%
Healthcare - Excess Liability: +10%
Healthcare - Property/Non-CAT Exposures: +5% to +10%
Healthcare - Auto: +5% to +10%
Healthcare - Workers’ Compensation: Flat to +5%
Healthcare - Primary Professional Liability: +10% to +20%


  • Start renewals early to allow time for any obstacles that may arise in the process. Objectively assessing property values and layering a property program with multiple carriers takes time.
  • Ensure IT systems meet pixel tracking requirements. Be prepared to prove you have proper protocols in place.
  • Prepare for the upcoming changes to Medicare Part D. With the scheduled rollout of changes to Medicare Part D now going into effect, prepare for more pronounced changes in 2025. Medicare plans will need to seek alternate reinsurance coverage before 2025 to smooth the transition.

Explore the Report

The contents of this report are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.