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What Does a 112% Combined Ratio Say About the MPL Market?

August 3, 2026

A 112% first-quarter combined ratio shows that medical professional liability insurers remain under underwriting pressure even as premium volume and industry capital reach historically strong levels.

‍Milliman’s Q1 2026 MPL industry update reports that direct written premium among 194 specialty MPL companies reached $2.92 billion during the first quarter, the highest first-quarter total in the firm’s 20-year dataset. Premium increased approximately 2% from the same period in 2025, and Milliman projects full-year premium could exceed $8.8 billion.

Yet the same group posted a first-quarter combined ratio of 112%. In practical terms, underwriting costs continued to exceed premium earned before investment results are considered.

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Strong Premium Growth Does Not Mean Underwriting Is Easy

The 112% result was essentially unchanged from comparable first-quarter results in 2023 and 2024. Milliman also found that loss adjustment expenses increased during the quarter, indicating that the cost of investigating, managing, and resolving claims continues to put pressure on results.

That fits a longer-running pattern. The MPL Association reported that the industry’s full-year combined ratio increased from 103.4% in 2024 to 107.4% in 2025, marking a 12th consecutive year of underwriting losses. It also noted that the industry has largely exhausted the substantial reserve redundancies that once helped offset current-year losses.

For retail agents, those figures help explain why a financially healthy MPL market can still behave cautiously. Capacity may be available without carriers becoming less selective about pricing, specialty, claims history, procedures, venue, or submission quality.

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MPL Insurers Remain Very Well Capitalized

The other side of the story is financial strength. Milliman reported $24.4 billion in policyholder surplus at the end of the first quarter, nearly 6% above the prior year and more than two-and-a-half times the level recorded in 2007. Investment income reached $315 million for the quarter and remained strong by historical standards.

That distinction matters. A combined ratio above 100% does not mean the MPL market as a whole is financially unstable. Investment income, substantial surplus, and favorable reserve development can support overall profitability even when the underwriting operation itself runs at a loss. But strong balance sheets do not remove the need for rate adequacy.

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Why Underwriting Discipline Is Likely to Continue

The current numbers give carriers little reason to abandon the more disciplined underwriting environment that has developed over recent years.

AM Best reached a similar conclusion in its 2026 MPL market analysis, reporting a $712 million underwriting loss among insurers primarily writing MPL business in 2025, up from $546 million the prior year. AM Best pointed specifically to rising claim severity, social inflation, and pressure on rate adequacy.

For agents, this helps put individual placement decisions into context. A carrier asking more questions, requiring additional documentation, or pricing a risk more conservatively may be responding to broader loss-cost pressures rather than reacting only to that particular physician.

It also explains why two financially strong carriers can approach the same account differently. Each market is balancing its own portfolio, loss experience, pricing objectives, and appetite against an MPL environment in which underwriting profitability remains difficult to achieve.

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What Should Retail Agents Take From the Numbers?

The strongest takeaway is not that the MPL market is deteriorating. It is that financial strength and underwriting pressure can exist at the same time.

Premium and surplus are at historically strong levels, while investment income continues to support insurer results. At the same time, combined ratios above 100%, rising defense costs, and increasing severity give carriers ample reason to remain selective.

For Western Summit and the retail agents it works with, that makes understanding carrier appetite increasingly important. A placement is not simply a search for available capacity. It is a process of matching the characteristics of an individual medical risk with markets whose underwriting strategy, pricing, and coverage approach fit that exposure.

The first quarter of 2026 suggests the MPL industry remains financially resilient—but resilience should not be mistaken for a return to loose underwriting.