Professional Liability Insurer Paying a Dividend to Policy Holders

With financial markets in a state of disarray and insurers suffering just as much as banks and brokerages from mortgage losses, one needs to dig a bit to find "good" business insurance news.

As any professional will tell you, professional liability insurance can be the fourth largest cost to any professional office (after rent, employees/taxes and health insurance). For doctors, medical malpractice insurance is a necessity and a cost that rises year after year. Large insurer programs for doctors are more likely to fail than to reward physicians who are long-time customers. In a 2003 report to congress, the American Medical Association estimated 18 states had a "medical malpractice insurance crisis" where physicians could not find appropriate or affordable coverage. In the late 90's, PIC Insurance in Pennsylvania and P.I.E. Mutual in Ohio were put in receivership and eventually liquidated - leaving their insured physicians in limbo.

Physicians Liability Insurance Company of Oklahoma, on the other hand, was founded in 1980 and, as noted on its website:

"PLICO is currently in its 29th year of serving Oklahoma physicians. Our only interest is providing a stable and physician friendly professional liability insurance market. We look forward to serving the needs of the physicians of Oklahoma for many years to come."

This approach to professional liability insurance appears to be paying dividends - literally. PLICO announced that it will pay a 3% to 6% dividend to policyholders who renew their policies in 2009 with the company. The company further stated that it is in "the strongest financial condition of its 30 year history." So, not every story or report need be doom and gloom for business insurers. Frequently, the media focuses on the largest insurers' missteps and forgets local, state-based, well-managed insurers. This is because, for example, a story about an Oklahoma medical malpractice insurer paying dividends is not as exciting as stories about AIG executive perks in the midst of being bailed out by taxpayers. But the story is more important.