“Why Should I Stay with UMIA When There Are Other Carriers Who Are Offering Me A Lower Rate?”

Martin J. Oslowski
President and CEO

The letter to our Utah policy holders announcing the 9.5% rate increase and the reasons for it was sent out just prior to Thanksgiving. The letter contained the following graph which demonstrated that our average claim payment has doubled since 2005 as a result of the CPI inflator that was placed upon the non-economic damage cap that essentially doubled the cap from $250,000 to $490,000.

I can assure you that the last thing your Board of Directors wanted to do was to raise rates. This trend is not being seen in our other core states of Montana and Wyoming. Rate increases are NOT being implemented in those states.

As you can imagine, we have received many telephone calls. Our policy holders are asking the question, “Why should I stay with UMIA when there are other carriers who are offering me a lower rate?” I will now do my best to answer that question.

The UMIA was formed on December 1, 1978 by the Utah Medical Association. On December 1, 2009 we began our 32nd year of operations. We are the leading writer of Medical Professional Liability Insurance in the state of Utah. In 2009, we had a 64% market share. The second leading writer in the state had a 5.8% market share. No one has access to our database since we write the majority of the business. Our loss costs are evaluated annually by our independent professional actuaries. Due to reality economics, we must charge an adequate premium to pay our losses and expenses to run the company so that we will continue to be here to serve you. During the last 30 years there have been times when we have been the only carrier in the state writing new business. We have been here to insure our policy holders through good times and bad.

UMIA is managed by Boards which are comprised of practicing physicians. They must abide by the decisions that they make. We have an extremely loyal and experienced staff. I have been employed by the company since 1979 and have been your President and CEO since December 1986. My other three officers have each been employed for 20 or more years. Our staff shares the Board’s values.

The UMIA operates on a “not-for-profit” philosophy. Our underwriting expenses have been less than 10% for many years which means that 90% of your premium dollar is available to pay losses. Most other companies have expense ratios in the 15-20% range which includes profit and commission expenses. We are financially strong and have had an (A-) A.M. Best rating since 1990. Our investments are conservative and sound. Ninety-six percent of our investments are in fixed income instruments and only 4% of investments are in equities. During this recession, we did not have to write down any impaired bonds and we preserved our capital better than most insurance companies. We are local, accessible, flexible, and have a strong commitment to risk management. We employ very loyal, experienced defense attorneys to defend you should a claim arise. Our claim department has more than 100 years of handling professional liability claims in the state of Utah.

Ancillary coverages such as Fraud & Abuse cover, Employment Practice cover and now eMD coverage are provided within your UMIA insurance policy. Our policy also contains a $5,000 No-Fault benefit which can be used to defuse a potential claim.

As you can see there are many, many reasons to keep your coverage with the UMIA. We pledge to provide you unparalleled service. We believe in the long run no one can provide you this coverage on a more economical basis. We appreciate your loyalty and your business. We will always be here to serve your professional liability needs.