| Coverage | Trend | Range |
|---|---|---|
| Public MCOs — E&O |  | Flat to +5% |
| Public MCOs — D&O |  | Flat to +3% |
| Blue plans — E&O | | Up to +5% |
| Blues plans — D&O | | Up to +7.5% |
| Hybrid entities — E&O (Accountable care organizations, third-party administrators, management service organizations, revenue cycle management) | | +2.5% to +10% |
| Hybrid entities — D&O (Description as above in E&O) | | +2.5% to +10% |
| All other MCOs — E&O | | Flat to +5% |
| All other MCOs — D&O | | Flat to +5% |
| Private company, other lines of business: | ||
| EPL | | Flat to +5% |
| Fiduciary | | Flat to +5% |
| Crime | | Flat to +5% |
| Cyber liability |  | –5% to +5% |
Key takeaways
- Antitrust, behavioral health, outsized verdicts, AI governance and regulatory environment challenge insurers, but capacity remains steady.
- TPAs, PBMs and MSOs face carrier scrutiny and higher premiums due to the above and concerns with delegated functions and transparency.
- The D&O market is competitive for favorable risks with strong governance, stable financials and good claims activity.
- Cyber is highly account-specific. Best-in-class healthcare organizations continue to receive modest decreases to modest increases.
Managed care E&O coverage restrictions and market dynamics
Significant risks continue to drive coverage limitations across the marketplace.
- Retention and coinsurance adjustments: Some carriers continue to increase retentions, apply coinsurance, and sub-limit coverage, particularly around antitrust and regulatory exposures.
- Exclusions: Association and cyber exclusions remain common and multiplan out-of-network exclusions are emerging, while PBM policies are seeing added exclusions for rebates, opioids and other emerging risks.
- Challenging risk profiles: Coverage remains difficult to secure for pharmacy benefit managers, third-party administrators, entities involved in value-based contracting from the provider side, revenue cycle management, medical services management and other hybrid risks, especially those with bodily injury exposure. Limited market capacity and restrictive terms persist.
- Carrier requirements and coverage structure issues:
Some insurers require participation in managed care E&O to offer D&O/management liability policies. This can lead to anti-stacking concerns and complications with rates and capacity in larger insurance towers. - Strategic risk transfer planning:
Risk transfer programs must be carefully coordinated across all coverage lines to minimize gaps and avoid restrictive terms. - Alternative risk financing:
Captives and other alternative solutions are available. Fronted programs are emerging as a viable alternative to traditional captive structures. - Noncore business diversification: Expansion into noncore areas is contributing to increased risk and coverage limitations.
No new domestic Managed care E&O capacity has entered the market with no carriers exiting. Offshore carrier activity remains unchanged. Competition exists among markets, especially for cleaner traditional managed care risks, which may receive multiple quotes; and incumbents are eager to retain business. Increased limit factors (ILFs) have stabilized in excess placements due to competition.
Managed care E&O and D&O carrier meetings are encouraged and can be very valuable, especially since managed care exposures are complex. These meetings assist in differentiating the organization from its peers, help underwriters understand the risks that aren't captured in the submission, improve marketing outcomes and help in building relationships.
Due to the complexity of managed care E&O and D&O, the renewal process should begin early to maintain the most favorable terms.
Disclaimer
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
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