Brokers placing Australian healthcare professional liability (HPL) programs are working against the wider market, and even loss-free hospitals and healthcare groups face increases of up to 40% on excess layers, according to Lockton.
Its November 1 update puts rises for loss-free buyers at around 7.5% to 40% on excess layers and 5% to 20% on primary. Buyers with losses to their layer face 10% to 25% or more on primary, where higher attachments may apply, and 20% to 40% or more on excess, where drop-down may be restricted.
Lockton’s figures are indicative and will vary with claims experience, attachment point, limits, service profile, risk controls, program structure and placement conditions.
Pacific commercial rates, by contrast, fell 12% in the third quarter of 2026, an 11th straight decline, and casualty dropped 11%, according to Marsh.
Read more: Pacific rates fall 12%, but not every client gets the cut
EBM Insurance & Risk reported in May that new local and Lloyd’s capacity left in-appetite professions with flat or slightly lower professional indemnity rates.
Terence Williams, Aon’s head of commercial risk for Asia Pacific, said in July that lines across the region no longer move in step.
Lockton said clinical improvement, enterprise risk management, proactive claims defence and demonstrated quality progress can help offset headwinds, and clear data supports a stronger renewal presentation.
That data includes claims development by incident, notification and closure year, alongside damages, legal costs, paid amounts, reserves, reserving changes, complaints, near misses, audit exceptions and corrective actions.
“Underwriters increasingly want evidence that risk controls are not only in place, but are working in practice,” Lockton said. In obstetrics, that covers competency, consultant availability, escalation, emergency intervention, neonatal support and multidisciplinary simulation.
Underwriters also review credentialling, records, safeguarding, chaperones, consent, clinical AI and supplier risks that could affect multiple patients, and check controls run consistently after acquisitions.
AI is changing professional liability wordings. Willis found that, between January 2025 and January 2026, carriers shifted from silent AI assumptions to affirmative warranties or absolute exclusions.
Read more: The AI tool Australian insurers deploy could pose "catastrophic or existential risks to humanity"
Clients can expect higher aggregated self-insured retentions, and some larger systems are being directed towards each-and-every-loss structures.
A low initial retention can still leave substantial cumulative exposure and place predictable losses within risk transfer, Lockton warned.
Its alternatives include inner aggregate deductibles, insured or retained buffer layers, second or third loss protection, swing-rated programs and additional aggregate capacity. None is standardised, and value depends on negotiated definitions, attachment points and exhaustion provisions.
Attaching risk transfer at the most price-competitive point can reduce the overall cost of risk financing, the broker said.
Healthcare professional liability insurers are cautious on sexual abuse exclusions and carve-backs for cyber, technology and pandemic risks, and are scrutinising reinstatements, large vertical limits and sideways aggregate protection.
Since January 2026, an ISO form has let US carriers exclude generative AI bodily injury, property damage and advertising injury from standard general liability cover, while CFC has added affirmative AI wording.
AXA XL, HDI Global and Arch Insurance London have added capacity, particularly for excess layers, but not enough to offset reductions by some established HPL insurers. Incumbents are more selective and seek higher attachment points.
HDI Global unveiled a global healthcare liability unit in October, and Risk Placement Services reports upper-tower US capacity contracting while demand grows.
In the US, Gallagher Re has flagged insurers cutting line sizes and raising attachments on lead umbrella and lower excess positions.
Lockton cites longer claims tails, slower closures and rising frequency and severity in healthcare professional liability. Inflation has pushed more lower-threshold losses towards attachment points, and medical and legal costs in obstetric and paediatric claims can outpace CPI.
A paper presented to the Actuaries Institute in May estimated claims costs rose 122% at Avant, 64% at MDA National and 164% at the VMIA since 2017. Inflation, population growth and ageing explained about 50 percentage points of each rise, the authors said, with litigation and legal costs among the other drivers.
Medical and hospital service costs also rose about 5% last financial year, and private health premiums increased an average 4.41% from April 1, 2026.
Read next: Private health risk equalisation gap deepens across Australia
Lockton cited Stewart v Metro North Hospital and Health Service [2025] HCA 34, where the High Court rejected mainly weighing home care’s extra cost against its health benefits over institutional care. Reasonableness must account for the injured person’s circumstances, though there is no unrestricted entitlement to a preferred arrangement.
The court found about $4.75 million for future home care reasonable, against $1.08 million awarded at trial.
“The Stewart decision may increase the potential cost of catastrophic injury claims involving future care,” Lockton said. It said insurers and insureds should consider early expert assessment, realistic quantum analysis and, where appropriate, structured settlements.
