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<\/p>\n\n Clean claims records offer no escape, and underwriters want proof controls work\n <\/p>\n
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Brokers placing Australian healthcare professional liability (HPL) programs are working against the wider market, and even loss-free hospitals and healthcare groups face increases of up to 40% on excess layers, according to Lockton.<\/p>\n
Its November 1 update puts rises for loss-free buyers at around 7.5% to 40% on excess layers and 5% to 20% on primary. Buyers with losses to their layer face 10% to 25% or more on primary, where higher attachments may apply, and 20% to 40% or more on excess, where drop-down may be restricted.<\/p>\n
Lockton\u2019s figures are indicative and will vary with claims experience, attachment point, limits, service profile, risk controls, program structure and placement conditions.<\/p>\n
Pacific commercial rates, by contrast, fell 12% in the third quarter of 2026, an 11th straight decline, and casualty dropped 11%, according to Marsh<\/a>.<\/p>\n Read more: Pacific rates fall 12%, but not every client gets the cut<\/a><\/p>\n EBM Insurance & Risk reported in May that new local and Lloyd\u2019s capacity left in-appetite professions with flat or slightly lower professional indemnity rates<\/a>.<\/p>\n Terence Williams, Aon<\/a>\u2019s head of commercial risk for Asia Pacific, said in July that lines across the region no longer move in step<\/a>.<\/p>\n Submissions carry the weight<\/p>\n Lockton said clinical improvement, enterprise risk management, proactive claims defence and demonstrated quality progress can help offset headwinds, and clear data supports a stronger renewal presentation.<\/p>\n That data includes claims development by incident, notification and closure year, alongside damages, legal costs, paid amounts, reserves, reserving changes, complaints, near misses, audit exceptions and corrective actions.<\/p>\n \u201cUnderwriters increasingly want evidence that risk controls are not only in place, but are working in practice,\u201d Lockton said. In obstetrics, that covers competency, consultant availability, escalation, emergency intervention, neonatal support and multidisciplinary simulation.<\/p>\n Underwriters also review credentialling, records, safeguarding, chaperones, consent, clinical AI and supplier risks that could affect multiple patients, and check controls run consistently after acquisitions.<\/p>\n AI is changing professional liability wordings. Willis found that, between January 2025 and January 2026, carriers shifted from silent AI assumptions to affirmative warranties or absolute exclusions.<\/p>\n Read more: The AI tool Australian insurers deploy could pose “catastrophic or existential risks to humanity”<\/a><\/p>\n Structure matters<\/p>\n Clients can expect higher aggregated self-insured retentions, and some larger systems are being directed towards each-and-every-loss structures.<\/p>\n A low initial retention can still leave substantial cumulative exposure and place predictable losses within risk transfer, Lockton warned.<\/p>\n Its alternatives include inner aggregate deductibles, insured or retained buffer layers, second or third loss protection, swing-rated programs and additional aggregate capacity. None is standardised, and value depends on negotiated definitions, attachment points and exhaustion provisions.<\/p>\n Attaching risk transfer at the most price-competitive point can reduce the overall cost of risk financing, the broker said.<\/p>\n Fine print tightens<\/p>\n Healthcare professional liability insurers are cautious on sexual abuse exclusions and carve-backs for cyber, technology and pandemic risks, and are scrutinising reinstatements, large vertical limits and sideways aggregate protection.<\/p>\n Since January 2026, an ISO form has let US carriers exclude generative AI bodily injury, property damage and advertising injury<\/a> from standard general liability cover, while CFC<\/a> has added affirmative AI wording.<\/p>\n New excess markets, thinner lines<\/p>\n AXA<\/a> XL, HDI<\/a> Global and Arch Insurance<\/a> London have added capacity, particularly for excess layers, but not enough to offset reductions by some established HPL insurers. Incumbents are more selective and seek higher attachment points.<\/p>\n HDI<\/a> Global unveiled a global healthcare liability unit<\/a> in October, and Risk Placement Services reports upper-tower US capacity contracting while demand grows.<\/p>\n In the US, Gallagher<\/a> Re has flagged insurers cutting line sizes<\/a> and raising attachments on lead umbrella and lower excess positions.<\/p>\n Severity behind the pricing<\/p>\n Lockton cites longer claims tails, slower closures and rising frequency and severity in healthcare professional liability. Inflation has pushed more lower-threshold losses towards attachment points, and medical and legal costs in obstetric and paediatric claims can outpace CPI.<\/p>\n A paper presented to the Actuaries Institute in May estimated claims costs rose 122% at Avant, 64% at MDA National and 164% at the VMIA since 2017. Inflation, population growth and ageing explained about 50 percentage points of each rise, the authors said, with litigation and legal costs among the other drivers.<\/p>\n Medical and hospital service costs also rose about 5% last financial year, and private health premiums increased an average 4.41% from April 1, 2026.<\/p>\n