New York Healthcare Risk Management/Patient Safety Conference to Address Pros and Cons of Healthcare Technology

February 28, 2020 by matray

The promise and potential risks of machine learning and other technology will be examined by experts at the 29th Healthcare Risk Management / Patient Safety Conference on Wednesday, March 11, at the New York Marriott Marquis.

2020 Healthcare Technology—Friend or Foe is hosted by Healthcare Risk Advisors (HRA), a business unit of The Doctors Company Group that provides third-party comprehensive insurance and risk management advisory services to New York hospitals. Several hundred healthcare leaders and providers from throughout New York City are expected to attend the conference, and complimentary registrations are still being accepted.

Keynote speaker Robert M. Wachter, MD, will speak on "Healthcare's Digital Revolution: (Finally) A Time for Optimism." Dr. Wachter is professor and chair of the Department of Medicine at the University of California, San Francisco; thought leader in organization of care, quality, patient safety, and digital health; and best-selling author of The Digital Doctor: Hope, Hype, and Harm at the Dawn of Medicine's Computer Age. Additionally, Dr. Wachter serves on the Board of Governors of The Doctors Company.

Dr. Wachter will also moderate a point-counterpoint debate on whether handheld devices are a patient care aid or a dangerous distraction. Adam Levine, MD, anesthesiologist with Mount Sinai Health System, will take the pro side. Kerin Torpey Bashaw, MPH, BSN, RN, senior vice president of patient safety and risk management with The Doctors Company, will present the cons.

Other healthcare experts speaking at the conference are:

Bryan Sexton, PhD, director of the Duke Center for Healthcare Safety and Quality at the Duke University Health System. Dr. Sexton will address "Workforce Well-Being as Quality of Care: Evidence-Based Burnout Busters (Mobile Friendly)." Hardeep Singh, MD, MPH, chief of health policy, quality and informatics at the VA Innovation Center, Baylor College of Medicine, in Houston, Texas. Dr. Singh will talk on "Relationship of Diagnostic Errors and Health Information Technology: It's Complicated." Zachary Lockerman, MD, MBA, FACG, CPE, chief medical informatics officer / patient safety officer at Maimonides Medical Center; Peter Shamamian, MD, vice president and chief quality officer at Montefiore Medical Center; and Robbie Freeman, MBA, MSN, BS, vice president of clinical innovation at Mount Sinai Health System. They will provide an update on how their hospitals are using technology to improve patient outcomes.

"We are exceedingly proud to attract some of the most preeminent experts in healthcare technology to our conference," said David L. Feldman, MD, MBA, FACS, senior vice president of HRA and chief medical officer for HRA and The Doctors Company Group. "Our speakers will explore the latest technological advances in healthcare and examine the benefits, as well as potential underlying risks, to providers and patients."

About Healthcare Risk Advisors Healthcare Risk Advisors ( ), formerly FOJP Service Corporation, provides comprehensive insurance and risk management advisory services to leading academic hospitals, long-term care facilities, and social services agencies in the metropolitan New York area. Healthcare Risk Advisors is part of The Doctors Company Group.    

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AM Best Downgrades Credit Ratings of ProAssurance Group and ProAssurance Corporation

February 26, 2020 by matray

AM Best has downgraded the Financial Strength Rating (FSR) to A (Excellent) from A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a+” from “aa-” for the members of ProAssurance Group. The outlook of the FSR has been revised to stable from negative whilst the outlook for the Long-Term ICR remains negative. Concurrently, AM Best has downgraded the Long-Term ICR to “bbb+” from “a-” of ProAssurance Corporation (PRA) (headquartered in Birmingham, AL), as well as all associated Long-Term Issue Credit Ratings (Long-Term IRs). The outlook of these Credit Ratings (ratings) remain negative. All companies are indirect subsidiaries of PRA. (See below for a detailed listing of the companies’ ratings.)

The ratings of ProAssurance Group reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The ratings downgrade reflects AM Best’s view that ProAssurance Group’s medical professional liability (MPL) operating performance has deteriorated in recent accident years and calendar years with results more in line with industry averages. The company reported a $30.4 million adverse loss reserve development in the fourth quarter of 2019, driven by a single large national MPL account and a full-year 2019 combined ratio of 118.9%. Prospective results also are expected to be challenged in 2020 and again in 2021 with its planned acquisition of NORCAL Group (NORCAL). As ProAssurance Group continues to face challenges of declining MPL premium levels in competitive markets and increasing MPL loss severity, AM Best does not expect the group to materially out-perform the MPL industry in the near future.

While the group’s balance sheet strength continues to be assessed at strongest, the negative outlook reflects the decreasing trend of its capital adequacy, as measured by Best’s Capital Adequacy Ratio (BCAR), driven by lower underwriting profits and reduced embedded equity in loss reserves. The planned acquisition of NORCAL in 2020 is likely to place some additional strain on the group's consolidated risk-adjusted capitalization. The ratings also consider the ProAssurance Group’s market position as one of the leading MPL insurers in the United States, as well as its diversification across multiple disciplines, geographic areas and in its other lines of business. The planned NORCAL acquisition will likely increase the group’s operational scale and strengthen its market position in the long term. These ratings also acknowledge the depth and breadth of the group’s ERM programs and policies. In addressing challenges in a prolonged soft MPL market, management has leveraged its talent, knowledge base and market position to introduce innovative alternatives.

The FSR has been downgraded to A (Excellent) from A+ (Superior) and the outlook revised to stable from negative while the Long-Term ICRs have been downgraded to “a+” from “aa-” with that outlook remaining negative for the following members of the ProAssurance Group:

•ProAssurance Casualty Company
•ProAssurance Indemnity Company, Inc.
•ProAssurance Specialty Insurance Company, Inc.
•Medmarc Casualty Insurance Company
•Noetic Specialty Insurance Company
•Podiatry Insurance Company of America
•ProAssurance American Mutual, A Risk Retention Group
•Allied Eastern Indemnity Company
•Eastern Advantage Assurance Company
•Eastern Alliance Insurance Company
The following Long-Term IRs have been downgraded with the outlook remaining negative for:
ProAssurance Corporation:

--to “bbb+” from “a-” on $250.0 million 5.30% 10-year senior unsecured notes, due 2023
The following indicative Long-Term IRs under the shelf registration have been downgraded with the outlooks remaining negative:
ProAssurance Corporation:
--to “bbb+” from “a-” on senior unsecured debt
--to “bbb” from “bbb+” on senior subordinated debt
--to “bbb-” from “bbb” on preferred stock

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AM Best Downgrades Credit Ratings of NORCAL Group; Revises Under Review Status to Developing from Negative

February 26, 2020 by matray

AM Best has downgraded the Financial Strength Rating (FSR) to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a-” from “a” for the members of NORCAL Group (NORCAL). Concurrently, AM Best has maintained the under review status on these Credit Ratings (ratings) and revised the implications to developing from negative. (See below for a detailed listing of the companies.)

The ratings reflect NORCAL’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

These rating actions are a follow up to ones taken on Dec. 10, 2019, when the group was placed under review with negative implications after significant reserve strengthening was reported in third-quarter 2019, resulting in deterioration of capitalization and profitability. The rating downgrades reflect the adverse reserve development reported in fourth quarter, the additional net reserve leverage taken on by this charge and the potential for further adverse loss reserve development, which is considered in AM Best’s view of risk-adjusted capitalization. The size and breadth of the charge also raises questions as to risk awareness and the appropriateness of the group’s reserving and claims management practices, as well as loss-cost assumptions when setting pricing.  

The under review status takes into consideration the potential for additional reserve charges as well as the recently announced acquisition of the group by ProAssurance Corporation, one of the leading medical professional liability insurers in the United States. The value of the transaction involves a base consideration to policyholders of $450 million with a $150 million three-year earn-out on prior year reserves, following the demutualization of NORCAL. The transaction is expected to close in late fourth-quarter 2020 or in first-quarter 2021, pending demutualization and regulatory approval.  

The developing implications reflect the potential for NORCAL’s ratings to be lowered in the event the transaction does not close and/or further reserve development is reported. There is also the potential for NORCAL’s ratings to be stabilized or enhanced if the ProAssurance transaction is consummated. However, concerns regarding rising loss costs (i.e., severity) in the medical professional liability segment and its impact on profitability remain.

The FSR was downgraded to A- (Excellent) from A (Excellent) and the Long-Term ICRs downgraded to “a-” from “a”, with the implications of the under review status revised to developing from negative for the following members of NORCAL Group:

· NORCAL Mutual Insurance Company

· NORCAL Specialty Insurance Company

· Medicus Insurance Company

· FD Insurance Company

· Preferred Physicians Medical Risk Retention Group, a Mutual Insurance Company

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ProAssurance to Acquire NORCAL Group

February 20, 2020 by matray

ProAssurance Corp. and NORCAL Group announced today the signing of a definitive agreement under which NORCAL would become a part of ProAssurance in a $450 million transaction following the demutualization of NORCAL Mutual Insurance Company (NORCAL Mutual), NORCAL's ultimate controlling party. The demutualization and the acquisition agreement are mutually contingent, and are subject to required regulatory and policyholder approvals. Based on available estimates of premium, the combination of these companies is expected to create the nation's third largest specialty writer of liability insurance for healthcare professionals and facilities. The companies are targeting to close the transaction by the end of 2020, subject to required approvals.

This transaction is expected to deliver multiple strategic and financial benefits, including enhancements to scale and capabilities, access to the high-quality California physicians market at a time when the healthcare professional liability market is starting to harden, and an expected $18 million in pre-tax synergies. These synergies will consist of corporate and back-office expenses, staffing, and other cost areas such as technology and real-estate, along with consolidation of reinsurance and investments. We anticipate the transaction will be accretive to earnings in the second year of ownership, and generate highly attractive returns to shareholders over the longer term as well.

"Bringing together these two great organizations provides ProAssurance and NORCAL with a transformational opportunity to enhance the services we can deliver to our customers and distribution partners, while creating significant long-term value for ProAssurance shareholders," said Ned Rand, President and Chief Executive Officer of ProAssurance. "Much like ProAssurance's predecessors, NORCAL was founded by physicians in the 1970’s to serve the professional liability insurance needs of physicians. NORCAL's history and physician focused culture make it a perfect fit for the ProAssurance family."

Rand continued, "For over 40 years, ProAssurance and its predecessors have navigated the peaks and valleys of the long cycle characteristic of our businesses. This announcement serves as an example of what we have always believed: it is during the most challenging stages of the long cycle that the greatest opportunities arise."

Scott Diener, President and Chief Executive Officer of NORCAL, said, "We are thrilled to be partnering with ProAssurance. Given today’s challenging healthcare environment, both organizations will benefit significantly from the formation of this enhanced company. Combining with ProAssurance brings tremendous strategic value to NORCAL through increased financial strength, access to new and innovative products for policyholders, and the increased scale of our core services and data analytics. The completion of this transaction will enhance and expand NORCAL's ability to serve its customers in the highly competitive MPL industry as we strive to carry out our mission."

Mike Boguski, President of ProAssurance's Specialty Property & Casualty division, added, "This transaction is an exciting combination of healthcare professional liability industry leaders. Strategically, this combination provides us with a national platform, geographic diversification, deep penetration in the physician market, best in class talent, and access to high quality distribution partnerships. We look forward to working with the exceptional employees and distribution partners at NORCAL to create a premier organization to serve the evolving healthcare market on a national basis."

The Boards of Directors for both companies have unanimously approved the transaction, which now requires the approval of NORCAL Mutual policyholders and appropriate state and federal regulators. Eligible NORCAL Mutual policyholders will be asked to vote on the Plan of Conversion and at the same time will be asked to select how they will be compensated for their mutual company interest in NORCAL Mutual. Under the terms of the agreement, NORCAL Mutual's demutualization will be followed by a tender offer from ProAssurance to purchase the stock of the demutualized company. ProAssurance will pay a base consideration of $450 million in cash, with a contingent consideration of up to $150 million should ultimate loss estimates as of the acquisition date develop favorably. In addition, NORCAL will have the opportunity to nominate two individuals to new seats on the ProAssurance Board.

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Beazley Enhances Virtual Care policy for Digital Health Sector

February 19, 2020 by matray

Specialist insurer Beazley has enhanced its Virtual Care insurance policy in the United States to offer greater protection for the providers of technology-enabled healthcare and lifestyle management services.

The rapidly growing global digital health market is estimated to reach a value of $504 billion by 2025 and includes telehealth, which enables remote medical diagnosis and monitoring, and m-health, which permits self-monitoring of chronic conditions via apps and wearables, through to a range of lifestyle and wellness technology.

With the addition of the new Surge endorsement, Beazley can now provide first-party coverage for direct financial loss arising from:

• eCrime including fraudulent instruction, funds transfer and telephone fraud
• Business interruption loss from security breach or system failure
• Dependent business interruption loss from security breach or system failure
• Data recovery loss
• Cyber extortion loss
• Cryptojacking including the unauthorized access or use of computer systems to mine for digital currency.

This is in addition to the coverage already in place within Beazley Virtual Care, including professional liability (medical malpractice) and a wide range of other third-party coverages. The policy is available for worldwide risks across all 50 states on a surplus lines basis and provides integrated insurance for healthcare providers that would otherwise have had to buy multiple policies to protect themselves and their clients from potential risks.

“Backed by specialist claims expertise, Virtual Care’s Surge endorsement provides additional first-party cover for cyber crime and the subsequent business interruption that can floor businesses and slow their recovery,” said Jennifer Schoenthal, U.S. underwriting lead for Virtual Care. “As risks are always evolving, we’ve also included protection against crypto-jacking, which can leave firms with exorbitant electricity bills and sluggish systems if their IT is breached by crypto-mining cyber criminals.

“Beazley Virtual Care brings together our global expertise in underwriting medical malpractice, errors & omissions and privacy coverages to deliver extensive protection that helps our clients avoid the risk of coverage gaps and supports their evolving businesses.”

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COPIC Promotes Members of Its Management Team to Senior Vice Presidents

February 19, 2020 by matray

COPIC announced that five members of the company’s management team were recently promoted to Senior Vice President positions. The promotions include the following people:

     • Kristin Stepien—Senior Vice President, Sales and Business Development

     • Janel Loud-Mahany—Senior Vice President, Underwriting and Policyholder Services

     • Beverly Razon—Senior Vice President, Public Affairs

     • Shelly Waggoner—Senior Vice President, Human Resources

     • Sean Gelsey—Senior Vice President, Claims and Strategic Partnerships

According to COPIC, the promotions are part of its adjusting its organizational structure to better meet the needs of its insureds as well as to address market expansion and manage growing business operations. Collectively, this group represents more than 60 years of experience at COPIC.

“A big factor in COPIC’s success is the internal leadership and expertise we have at our company,” said Gerald Zarlengo, MD, CEO of COPIC. “These well-deserved promotions are in key areas that support our growth and commitment to high-quality customer service, and we feel that this will better position us to evolve and meet the challenges that lie ahead.”

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