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While the insurance market is challenging and costs are increasing within specific product lines, this market cycle is a real opportunity for organized companies to create a competitive advantage for their firms around the acquisition of best-in-class insurance programs.

Navigating the market requires a strategic plan within risk management departments. You want to begin renewal discussions early with underwriters and share details about your risk management organization, culture, and processes. In addition, you want to be ready to provide more detailed exposure information than has been requested or required in prior years.

The Pandemic, Insurance, and the Healthcare Industry

COVID-19 placed enormous strain on the healthcare sector’s workforce, infrastructure, and supply chain, which led to accelerated change across the spectrum. Healthcare systems were forced to adapt quickly. Those with strong financial positions and access to capital, sufficient spread of risk, and secure supply chains were able to make the transition more smoothly than those of lesser means or narrow operating platforms.

Key issues facing the industry include how to manage cost and patient outcomes with a transition to valued-based care while simultaneously transitioning to a consumer-driven model. Consumers are demanding access to patient data and seamless access to care through both virtual and traditional in-patient visits.

Many healthcare providers that received government funding during the pandemic expect increased regulatory scrutiny to ensure the proper use of funds. Health systems are also operating in an increasingly litigious environment that has raised the costs of litigation and insurance across casualty product lines.

Healthcare systems and providers are continuing to build scale and access to patients through mergers, acquisitions, joint ventures, and collaboration. Heavy investment is occurring across the industry for data and analytics as well as protection of networks from hackers and ransomware demands.

Healthcare Industry Outlook

Market conditions remain challenging for healthcare providers for all property and casualty product lines. Some insurers have exited the healthcare market, and those that remain are managing capacity. Recent newcomers in the marketplace should help fill the capacity voids and contribute to a more competitive environment.

Dramatic change is affecting privacy and cyber-security policies, with unprecedented underwriting review and pricing adjustments for larger healthcare systems. Healthcare providers continue to invest heavily in IT security.

Further Reading

This post is based on the Insurance Marketplace Insights & Observations 2021 End of Year Report, the first report produced by Alliant on the state of the insurance market. For more information about current market conditions and industry outlook, access the report on Alliant’s website.

The observations and commentary in this post reflect the author’s understanding of the market. For additional clarity, please contact Barry Peters. More information about Alliant’s insurance product for AIHA members is available online.