US MPL Insurers Face Losses as Claims Severity Rises

The US medical professional liability (MPL) insurance segment reported continued underwriting losses in 2025 as rising claims severity and social inflation weighed on results, according to a new AM Best report. Slowing premium growth further compounded the pressure on insurers. 

The Best's Market Segment Report found that insurers focused primarily on MPL business posted a collective underwriting loss of $712 million in 2025, up from $546 million in 2024. Direct premiums written rose 3.6 percent to $9.4 billion, extending an upward trend but falling short of expectations. 

"The premium growth in 2025 was generally below expectations, reflecting competitive forces impacting carriers pushing for higher rate increases amid rising claims severity and rising competition," said Vicky Riggs, associate director, AM Best. "We also noticed increasing levels of net investment income providing cover for companies that reported underwriting losses, as most still managed to report overall positive pretax and net income." 

Despite underwriting challenges, the MPL composite recorded its second consecutive year of pretax earnings exceeding $1 billion, supported by strong net investment income. However, net income declined 22 percent to $1.6 billion, primarily due to lower realized capital gains. 

Favorable prior-year reserve development continued to support calendar-year results, though at diminished levels compared with earlier periods. While redundancies exceeded $1 billion annually between 2015 and 2017, the benefit has moderated. In 2025, favorable development totaled $155 million. 

"We expect the property-casualty industry to report small reserve deficiencies for the MPL line in the near term, as social inflation takes its toll on claim frequency, severity, and both reporting and settlement patterns," said Connor Brach, associate director, AM Best. 

The report also highlights variations in state-level medical liability tort reform, noting that some states have implemented reforms while others have not. This uneven regulatory environment continues to influence operating performance for MPL insurers, particularly in states resistant to reform measures. 

AM Best said it will host a complimentary analytical briefing on the US MPL insurance sector. 

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