Placing You First Insurance Podcast by CRC Group

Healthcare D&O and Coronavirus (COVID-19)

March 26, 2020 CRC Group
Placing You First Insurance Podcast by CRC Group
Healthcare D&O and Coronavirus (COVID-19)
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Even before COVID-19, Healthcare organizations were already under financial pressure from the changing reimbursement system.   And now they face a hardening D&O liability insurance marketplace. In this podcast, CRC offers insights on how retail agents can help their insureds navigate the difficult environment.

Featuring:
Ed Antonucci, Director, CRC Chicago, member of ExecPro Practice Group
Bob Allen, President, Pro-Praxis, member of Healthcare Practice

Dan Wentz:

This is the placing you first podcast. I'm Dan Wentz and this podcast features news and insights from CRCs vast knowledge base of 600 plus producers who write in excess of $8 billion in premium annual . And we're giving you insider access to what's happening in our company and the current trends in the types of insurance we place on this edition of the podcast. I'm [inaudible]

Ed Antonucci:

sure if the carriers really understand. They're worried about the financial condition, of hospitals closing. The reality is there's no way they can close up because of the distance between one hospital and another. I think the counties or whatever, will float bonds and do whatever they need to keep the hospital in place. The hardest thing we're fighting right now is regional hospitals .

Dan Wentz:

This is the placing you first podcast. Okay, so today we're talking hospitals and healthcare , D&O and we've got two specialists with us here today. Ed Antonucci is the director of CRCs Chicago office, member of the exec pro practice advisory committee. Hey ed, how are you doing today? Great. How are you doing? Terrific. Are you social distancing.

Ed Antonucci:

I am cooped up in then the house social distancing sign to sign things to with my kids and stay on top of my work. So having a great

Dan Wentz:

everybody who can at CRC group is social distancing. And I'm wondering right now if Bob Allen is social distancing as well. Are you at the house Bob?

Bob Allen:

I cannot tell a lie. I am actually in the office but I am here by myself so technically I am social distancing.

Dan Wentz:

Okay, there you go.

Bob Allen:

No there's not a body in sight so we're, we're thing .

Dan Wentz:

Well that's good. And Bob is the president of pro Praxis insurance and independent underwriting management company. It's a division of CRC group. And what do you guys focus on Bob?

Bob Allen:

Uh, or our specialty is really medical malpractice or medical professional liability for hospitals. Health systems though there just by similarity in the coverage , uh , regulatory action, things like that. There, there are some patterns that are very similar between the DNL for hospitals versus the professional liability for hospitals.

Dan Wentz:

Okay, great. And obviously there's a lot going on right now with coven 19 and that is the big topic of conversation. Can you all kind of give us an update on the marketplace for DNO in general, and I'm guessing this is more pointed towards ed, obviously DNO hardening even before coven 19 how is this all playing out right now and

Ed Antonucci:

you don't see if that , a previous podcast that I was part of, it talks about the overall hardening of the Dino market and both the private and public sector, but prior to the hardening of the private and public, do you know I was starting to see a little bit of a hardening in the healthcare D and O market and four specific areas. Really it was hardening in terms of increased rate, increased retention especially on PPLI and changes in potentially the regulatory decision and the antitrust exclusion . And those are the biggest areas that we were looking at. So, I think prior to PRC coming out with the podcast on the hardening of the Dean on market, we have been talking about doing a podcast on the hardening of the healthcare, do you know , market. And so now we're back to the healthcare thing in all markets. Talking about, you know, what's happened in that market now and also what might be happening with corporate 19.

Dan Wentz:

Yeah. So, so what is happening? What do we, so are you getting a sense of feeling for what's, you know, what coven is going to do? Obviously probably harden the market further, right?

Ed Antonucci:

Yes. So far. And when you looked at the past couple of years in healthcare , do you know market , there was a one carrier who was treating it correctly and pricing it correctly and retentions will good but providing philanthropy trust coverage , um, little pullback in a regulatory or where it was either a high co insurance or high retention and there were all the carriers who tended to be less retention wise, less in premium. And then at one carrier they finally came to realize that the claims and health care arena has been skyrocketing both on the EPL side and on the antitrust side, so they've had to make some adjustments and now they are catching up to the rest of the marketplace. And as I said, the adjustments have been price increases, but I think it's more of the standard of what was seen in the overall market. We're seeing 10 15 20% price increases. We are seeing an uptick in retention. Like I said, especially in the EPL area where we're seeing doubling retention and we're starting to see a pullback on overall limits, maybe carried that , we'll put up 10 or putting a five and we're starting to see a pullback on the antitrust limits. So what you might've had a pen baleen of you know , limits and 10 billion events that truck's limits. You might not have, you might have now 5 million of the annual limits and 3 million of antitrust law .

Dan Wentz:

Let's talk a little bit about losses in health care . Are they having an effect on the rates? Are we seeing more losses now?

Ed Antonucci:

I think the has has , has the impact of losses started before the impact of losses for all of BNL and the main area where those losses have come in has been on the antitrust side. There's been tremendous amount of antitrust claims and I would say followed by behind that was the EPL . I claims that that um, has , has tended to had more losses and more payoffs by the carrier .

Dan Wentz:

Okay. So specifically for hospitals and healthcare facilities, why is the hardening market it will first of all, is it more challenging for them now? Is it affecting them and is it problematic? And if so, why?

Ed Antonucci:

I guess from our side we look at placing health care to , you know, there's not a lot of players who have policy forms that's specific for healthcare for hospitals. So when your normal Dino market where you might have 30 to 35 carries , you're probably looking at under 10 carriers to handle that, that business. So , uh, your , your market spread is thinner , which that it might be some harder to plate the accounts to really get covered for if those same 10 carriers are seeing the same 10 accounts at the same time idea. So that's going to make it a couple of placements all around. So I think what's happening with the healthcare is that because of the limited market play , because now the markets are finally realizing the amount of planes that are coming in and paying out, everything's tended to rise . And the health, the health care companies themselves not only are faced with higher Dino premiums but also the significant claims that are coming in. So they're kind of getting a double hit. Right .

Bob Allen:

And you raise a good point there. I just interject quickly on the professional liability side, there's , I think we're also thing a restricting in terms where thing TCPA or telephone consumer protection act claims coming in on GL policies and finding gaps , um, for things that might typically be, whether it's that or employment practices are very much so in the regulatory world. So as , as one side of the balloon gets squeezed , uh , from claim activities, I think, you know, what you'll find is sort of this tug of war where it keeps trying to push more to the DNO side, which again, at those claims on your side keep going higher and higher. Um, you know, at that having an impact on your rate, et cetera versus EDS that are finding coverage , um, on unit a P L and or the DNO side.

Dan Wentz:

So what advice do you guys have for agents that are there doing placements in the healthcare industry and what do you think the outlook for them for placing insurances is moving forward?

Ed Antonucci:

Well, the outlook now it was, you know, talk to begin with and now I think with what's happening in the world would cope with 19 that , uh , it might be a little bit topper. I've heard one carrier out there who wasn't , it was not looking or entertaining any new business hospitals, you know, submissions. Um, I don't know what they have on the books right now, but they're not looking at a Tanium iPad , other carriers and said, no, we'll still look at them. But we're going to look very closely at the EPL . I retention because of the issues that can come , uh , a death and a rise and APLI from way people get sick, hospital workers get sick, how to handle after they get sick, how to protected while we're working on their patients . So we see a very seeing a lot of towers who were real concerned about the EPLs side of the hospitals . And then you throw into that the fact that they have to look at a financial condition a little more closely. And I think the hospitals who are going to get hurt most by that and the financial side and how to carry, they're going to view them all the regional hospitals and you gotta remember there's regional hospitals out there in some areas of the country, Oklahoma, Texas , whatever. We have one hospital within a 200 mile radius and that hospital could be struggling financially. Now, the big issue that goes on there is, I'm not sure if the Kyries really understand that concept that's being proposed to these reasons . These small hospitals , they're worried about the financial condition of these hospitals and hospitals closing up . The reality is there's no way they can close up, at least in my opinion, because of the distance between one hospital and another. I think the counties or whatever in those specific areas will float bonds and do whatever they do to keep the hospital in place. So the hardest thing was fight right now as a full regional hospitals , the finances and digital is only gonna get worse with the covert 19 and then reminding these. Otherwise you constantly will stay open. So unfortunately what will coming up too is will we get it back with me in the hospital we might, but then at the hospital shorter than a full bond . And so by then I guess we have to sell a policy with a bankruptcy exclusion and hopefully to come count stays solid and continue on with their business.

Dan Wentz:

Yeah. Any thoughts on that, Bob?

Bob Allen:

Yeah, actually I'm looking at a, a very large a property casualty insurers , uh , Dino questionnaire now, and it's the questionnaire that I created for Cove in 19, and they talked to a lot of the things that, that ad just discussed . So it's , you know, as the company undertaken, financial stress testing , uh, looking at the supply chain and have you, have you been prepared? And I think these are , um, again, how Kobe 19 could lead to future litigation. Is that potentially, you know, were you prepared? Did you have protocols in place for worst case scenario? Um, and not necessarily from a malpractice perspective, but again , um, did that hospital have to shut down because , uh , it did an it supply sources weren't, weren't adequate. And without the proper supplies, you, you know, there's no way that you can, and that's something that we're all going to have to face across the country. And especially to its point to be smuggled hospitals. Um, if they're last in line to get these supplies, can they even stay open? And , uh , in some cases it's going to be no, because you know, whatever department of health is going to say, well, until you have that , um , you're going to have to shut down that unit or whatever the case may be, which then has financial implications, et cetera, et cetera. So , uh , it's , it is a little unnerving, but I think it's , you know, ultimately it's our responsibility to explain to the underwriting community what exactly , um, some of the pros and cons are or potentially , uh , again, to Ed's point , uh , whether it's floating up on sort of a bridge , um , to get them through these hard times we have, we have to be the one to explain that, but we also have to start working with , with our client base a lot earlier in this process. You know, there's no such thing as an easy renewal anymore.

Dan Wentz:

Yeah. Would you, would you agree with that ed? That there is no such thing as an yeah,

Ed Antonucci:

I totally agree with that. And I think you know that that's part of the issue is that we have to get on on the phone with the clients and find out, you know , what , how they are being impacted by that and what the financial condition looks like anyway, and then how the financial condition can worsen. Because we've called with 19 and then getting on a phone with the underwriting. I spoke to an underwriter this morning and said, look, we're going to look closely at the finances addiction of the possible going forward, especially these, where are we? You know , hospitals, but we have no problem getting on the phone and talking through it to find out what they have in place, where they're going to be, how they're going to be supported by with whatever County or city or region that they're located in. So we do have underwriters will willing to listen to the story. It's just getting out ahead of the game and preparing them, preparing them, put the submission in and then putting a good story out to the underwriters followed by potential conference call with the client so we can get the right deal for the client.

Dan Wentz:

You know, agents should really be focusing on communicating and starting earlier so that you can get that full story together and get, you know, make it as his best to submission as you possibly can before you send it off. So, or do you have any other suggestions for agents or anything else they can be doing besides communicating starting earlier? Anything else they could increase their chances of success?

Ed Antonucci:

One of the things that I'm looking at, you know the thing Bob referred to earlier about the questionnaire, we've , we've heard that from a couple of carriers. I wouldn't mind going back through the powers that be at CRC and my group and say , um , you know, maybe, maybe we should be proactive instead of reactive instead of waiting for a specific carrier to give us a question here , take whatever, a couple of questions from each questionnaire or let's talk about legal people figure out and get our own questionnaire out there that might meet up and help out with the underwriting process. So it would not say, okay, I'll get a quote from X carrier. I don't need a question. Yeah, that's great. But if I have to go to Y carrier , I've got to get a questionnaire and that slows it down. So maybe we should ask those questions up front, especially for these hospitals financially preparedness and that kind of issue. So we have those answers are used to use the question as a guideline. We put a submission together so we have those answers. We get a submission that might go to the front of the path from the underwriters and get quality terms. Conditions.

Dan Wentz:

Yeah, sounds like you've got a great idea there. And I can see our practice group working on that already, which is great. And I think it's a, it's a good time to talk about that. Um , and maybe you could explain a little bit about the health care practice and what you guys do with sharing information, all that stuff.

Ed Antonucci:

Well, the healthcare practice, I might turn to Bob a little bit more familiar with the healthcare practice. I'm on a D and O practice and the D O practice, he has separate , uh , units up the Dino, you know, practice, you have separate units up to handle different types of business. So we have , uh, a lot of , uh , a group of people handle architects, real estate , um, privacy, you know, EPL , uh , cyber, I'm part of the O team, both private and public and nonprofit. Um, and then I kind of have a subset now with the healthcare DNO, but as far as , uh , there's a complete separate healthcare practice and I, Bob up to Berkeley, you revert to you on that one. Have you add on to that?

Bob Allen:

Yeah, and we're , we're set up very similarly in that. Um, and I think ultimately the , the competent and combination of our two groups make it perfect because we're set up where we have specialties, they hospitals, physician, senior living , um, and sort of all other healthcare facilities. And for , for us, we are looking at a lot of the same things that on the Dino thigh , but you know, as a, as the hospital stuff that are healthcare subset for DNO , uh, we're all looking at regulatory changes and how that's going to impact our , our broader healthcare clients. We're all looking at , um, you know, the mentioning some of these class actions. Uh , they happen on both sides, not just on the, on the DNO side, but the common term that we use on the professional liabilities that are these batch the events or this class action or multiple claimant. Uh, these are the things that are keeping our insurers and reinsurers up at night. Um, we, so we're, we're always sort of in constant communication, looking to each other for best practices. And that can be everything from , um, again, sort of the questionnaire, getting, getting out in front of of those questions and saying this is how we're going to put together the best proposition for you if we know your business better than anyone else. Uh , but that happens in both sectors, in both , uh , industry practice.

Dan Wentz:

So when you work with CRC group, we definitely place you first and you're getting specialists who know their areas of insurance inside and out. And you guys are definitely two of those specialists and we really appreciate your time today. Is there anything we missed that you wanted to touch on?

Ed Antonucci:

Yeah, definitely . One thing I would say it's because we have the CRC has a separate healthcare practice I've been doing, you know, do you know , you know, APLI got 30 years. I look young but I'm not, well, I will not touch dirty thoughts , dirty nurses , uh , assisted living facilities . I won't do it because I don't know enough about that market or what it has. And I would do it if I got a submission from one of my key retail is , or anyone in my retail is , I would divert that submission to somebody from the healthcare team because as much as I know what I'm doing in my little area is they coldly know what they're doing in their area. So I would not, so any, you know, that comes up on that. It's going right to my health care team and that's how we share information and get the right people in front of our clients.

Bob Allen:

Yeah, I would echo that. I think that , uh, that is one thing that we bring to the table is , is subject matter experts. So I may be able to read a hospital's financials , um, and understand their operations backwards and forwards, but it really is limited to , um, how that ultimately may play to a professional liability claim. So I don't know what a DNO underwriter is going to look for in terms of a good or bad debt ratio. I don't know what it's, you know, underwriter's going to look for in terms of , uh , regulatory protocols for antitrust. And that's where again , uh , we can push it back to say a subject matter expert , you know, rather than being selfish and, and doing a disservice to the client.

Dan Wentz:

That's great. Well once again that's ed answer Nucci CRC , Chicago and Bob Allen from pro Praxis insurance. Thank you guys very much for joining us today in the midst of all this coronavirus coven 19 social distancing. We really appreciate it guys and I hope you have a wonderful week. Thank you very much.

Bob Allen:

Wash your hands

Dan Wentz:

placing you first podcast. A quick note, CRC group is hiring and we want you to join our team CRCs expanding nationwide, opening new offices and hiring at all levels. Join one of the nation's leading wholesale brokers today by finding the careers page on CRC group.com. Also stay up to date with everything CRC by following us on LinkedIn. We'd love to start a conversation with you there and make sure you subscribe to the tools and Intel newsletter. We send out our latest white papers and reports to our subscribers and all we need is your email address. It's an easy [email protected] Thanks for joining us on the placing you first podcast.