Most physicians saw their malpractice insurance costs stabilize last year, and more than 40% actually paid less for their coverage, a national survey has found.

Of 726 rates reported, 362 or 49.8% were the same as they were in 2007, whereas 310 rates (43%) declined. Only 54 rates (7.4%) were higher in 2008, and three quarters of those increases were less than 10%.

Medical Liability Monitor, an independent newsletter, has been conducting this annual survey since 1991. Forty companies making up about 75% of the medical malpractice insurance market participated this year. They reported mature claims-made manual insurance rates for $1 million/$3 million policies in three specialties: internists, general surgeons, and obstetricians/gynecologists.

“Rates are clearly following a stabilizing trend and, in a significant number of cases, continue to decline from their historic highs of 2004 and 2005,” says MLM editor Michael Matray.


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“This year was the first in recent history when the overall average rate change showed a decline,” he adds. “While in 2003, the average rate change was +20.4%, 2008 experienced a -4.3% change. This is an obvious continuation of the soft market that physicians’ liability insurance has been experiencing the past three years.”

In another trend reversal, fewer companies pulled up stakes from individual states last year than the year before. Some insurance companies view that as a sign—along with the re-emergence of credits and the lifting of moratoriums on new business—that competition is returning to the market. But insurers also reported stricter underwriting standards as a way to control their risk.