Allied Professionals and the Evolving MPL Market

By Justin A. Rodrick, Bill Burns, ACAS, MAAA, and Kwon Miller

For most of the 20th century, when people thought of “healthcare professionals,” they immediately thought of doctors (MD/DO) and nurses. Given more time, they might mention non-MD/DO doctors such as dentists, chiropractors, pharmacists, and even chiropodists (better known today as podiatrists). If really pressed, people would eventually get around to “other” healthcare professionals such as physical therapists (“They just sit there and watch me exercise”), home health aides (“We have a nice woman that comes and watches TV with my mother a few times a week”), and optometrists (“They aren’t real doctors, they only fit you for glasses.”)

It was not until the 21st century that the importance of these other professionals entered the zeitgeist. Today, someone looking for a primary care provider might consider a nurse practitioner or a physician assistant (due to a shortage of primary care physicians or possibly to control their healthcare costs). Someone else might say they see a physical therapist as part of a pain management regimen (as opposed to taking medication). Or they might want a holistic approach to pregnancy and use a midwife rather than an OB/GYN.

Table 1 shows the rise in several allied professional categories between the years 2014 and 2024. The reasons behind these increases are well-documented but worth repeating:

• Aging population
• Rising rates of chronic illnesses
• Physician shortages, particularly in rural areas
• Increasing demand for medical services
• Patients added to the healthcare system resulting from the enactment of the ACA
• Advances in technology requiring skilled workers

Together, these factors have accelerated the integration of allied professionals into healthcare delivery systems.

The Allied Professional Workforce Expansion and Written Premiums

In the National Association of Insurance Commissioners (NAIC) annual statement for property/casualty insurance companies (aka the “yellow book”), companies are required to disclose certain information by healthcare provider type (sector), i.e., physicians, hospitals, other professionals (the topic of this article), and other facilities. This information is shown in Supplement A to Schedule T and companies are required to report (among other things) direct premium written (DPW) by sector for the latest calendar year. Based on the DPW for all companies that wrote MPL in the years 2016 to 2024 (with an estimate of the 2025 DPW), we assembled Figure 1.

The information in Figure 1 suggests that from 2016 to 2025, the average annual growth in DPW for other professionals was approximately 5.2%. However, this growth in written premiums is dramatically lower than the growth in the numbers of professionals shown in Table 1. This divergence between the growth in exposures and direct premiums written leads us to ask two questions:

1. Why has the massive increase in the number of exposures not translated into similar growth in MPL premiums?
2. How are these classes underwritten and insured comparably with physicians?

To answer these questions, we must first agree on a strict definition of allied providers in the way that risk-bearing entities view them. We then must explore their role in the delivery of healthcare, and how that has evolved over time. Finally, we must understand how these providers have been connected with capacity (i.e., the insurers that write malpractice coverage) and how that, too, has changed over time.

Given what appears to be massive interest in allied professions by the greater P/C industry, it is prudent to explain all of this, and why it is nearly impossible to dislodge these risks from the insurers providing the insurance capacity at an appreciable volume. There is a reason that prices for business producing loss ratios as low as the mid-30s to 40s cannot just be undercut to run on thinner margins.

In its simplest form, allied healthcare can be defined as individual and group non-physician providers. They command standardized limits and coverages from admitted markets with sufficient (A, minimum) rating and credit size to support the long-tail nature of their business. As a brief digression, it is much more common for the tail time on these claims to hover in the 2-to-4-year range, which is shorter than physician and facility claims.

Regardless, the demand for well-rated and capitalized paper is driven not only by a need for security, but also for facility-based credentialing purposes. It can be argued that allied healthcare has merged into the small miscellaneous medical facility sector given the mid- and post-COVID broadening of scope of practice and reduced requirement for physician oversight, as well as the growth in the “side hustle” culture. For the purposes of this article, we will restrain our scope to the initial definition, focused on providers themselves.

Allied Professional Utilization and Visibility

It is true that the utilization and visibility of allied professions have skyrocketed over time. This is only due, in part, to the rise in the number of these professionals evidenced in Table 1. Yes, demand for healthcare services continues to rise. Specialized professionals, who are educated in specific fields of expertise, usually in shorter periods of time than physicians, are a natural solution to such a challenge. They seamlessly integrated into our care teams, coming in to do their part as prescribed.

Contemporaneous, though, to the increasing numbers of folks going into these fields, was the broadening of their respective scopes of practice, and often the ability to practice with less, if any, physician oversight. Candidly, even if it were necessary, we do not have sufficient numbers of physicians to oversee all aspects of a person’s healthcare. It is more and more common now that these allied professionals are not just coming in after the doctor, but rather, they are the provider you made the appointment to see in the first place.

As with most matters that are insurance-related, a few comments on profitability and premiums are necessary. Without citing industry numbers, suffice to say that loss ratios for the allied provider segment tend to outperform the broader medical malpractice market by a significant margin. Accordingly, premiums are relatively low, with certain classifications such as Home Health Aides garnering sub-$100 premiums in many venues, while some Physician Assistants pay up to $7,000 (on the high end) for the same coverage in a severity venue.

The truth is that the average premium for an allied provider probably ends up in the three-figures, depending on the composition of the book. Put another way, a 12-point commission on many individual allied provider policies with standard coverage and limits won’t buy you lunch in most major cities. It makes sense that the performance would be enticing to capacity, but distribution? Not so much.

Allied Professions and MPL Insurance Risk

How do you connect low premium and homogeneous risks with insurers willing to provide the insurance capacity for them in a financially efficient manner? You do it at volume. However, it is probable that most P&C companies interested in MPL business were not inherently set up to do business this way. In fact, many current-day MPL insurers were born of the crises of the 1970s and 1980s when physician risks were shunned by the greater P/C market and physicians banded together to create their own mutuals. Whether that capacity still exists in the same form or has been absorbed back into the greater P/C market via acquisition, these writers do not have operating models, capital structures, or systems tailored to allied professionals’ business.

This is the right point in time to plug a Google search for the history of affinity marketing and benefits associations, as they are both fascinating and brilliant. Without oversimplifying, affinity marketing is a distribution concept that centers around aligning a provider of some good or service with a group of people who share a common interest. As the distribution of insurance relies on an agent model, it is natural that agencies would engage with affinity groups to connect them to capacity and provide insurance to their membership.

Agency-affinity group relationships come in numerous forms, with two prevalent versions being sponsorships and exclusive endorsements. Within the MPL space, these affinity groups come in the form of the many professional associations to which allied providers belong. To give the reader an idea of the breadth of allied professionals, many of the leading allied healthcare product filings in the country contain 140-plus provider classifications, and most, if not all, have professional associations. For some allied classifications, there are national, regional, and perhaps even local associations, and they all need coverage.

Role of Agencies in Allied Professional MPL Insurance

With sufficient volume of risks and a method of reaching them having been identified, the only remaining pieces of the equation to solve for are the constraints of capacity. Fortunately, this type of distribution lends itself perfectly to a delegated authority underwriting model, and these agents were happy to assume responsibility as a Managing General Agent (MGA), Managing General Underwriter (MGU), or Program Administrator (PA). While there is nuance to these terms, these agencies solicit, intake, underwrite, bind, and administer policies on behalf of an insurance carrier within the bounds of their granted authority.

They were able to design their underwriting model around the efficient handling of the policy lifecycle at volume and were awarded commissions that contemplate the additional duties ceded by carrier, as well as the profitability of the lines they are writing. It is worth noting here that for many allied classes, successful delegated authority programs were formed by specialty retail agencies, or perhaps former practitioners who sought out the insurance business and were not necessarily the result of an affinity marketing model.

All that remains to address is why it is so difficult to dislodge this business from incumbent carriers. In truth, it is the confluence of many factors. For one, allied professions within general allied or specialized programs are very sticky, consistently seeing 90%-plus retention rates on books of business year over year. It is also a testament to the strength of the affinity model and how well these agencies understand the needs of the affinity groups they partner with, and further, how much their members trust their recommendations. For another, it is a logistical nightmare to roll an admitted book of business with a potential 6-figure policy count from one carrier to another. That is a lot of data and a lot of policyholder notices. This holds true in practice, with some of the largest allied provider program/insurer relationships spanning many years, if not decades. Aon’s HPSO and NSO programs supported by CNA, the CM&F Group program supported by MedPro, and the AMBA ProLiability program supported by Liberty being great examples of these partnerships.

Carrier Allied Professional Market Entry

Looking to the future, there are two important factors at play that both current writers and prospective entrants should heed. First, those who want to be or remain successful in writing allied professions must be proficient, if not inventive, in the field of modern e-commerce. Those who connect allied professionals with capacity must understand the changing demographics of the insurable base and anticipate the way they prefer to go about applying and paying for a policy.

Second, insurers that may find it a tall task to pursue allied professions in their strictest sense may find entry via small miscellaneous medical facility business. These accounts are often interdisciplinary in terms of allied provider types and may include direct physician patient care or medical director services. At least in the near term, they will continue to serve as an inroad into allied markets as the services they provide (often cosmetic or therapeutic) are outside the appetite for traditional writers.

As the number and scope of allied providers continues to expand, the MPL market will likely see continued growth in insurable exposures. However, the characteristics of the sector—low premiums, affinity models, and long-standing program relationships supported by established insurance capacity—suggest that premium growth may not necessarily track exposure growth at the same rate.