The health care sector represents 18.3% of the U.S. economy, with each person spending an average of $12,900 each year on health care services.

Even as health care expenditures are projected to top $7 trillion by 2031, according to the Centers for Medicare & Medicaid Services, hospitals and health care providers are grappling with financial challenges driven by wage and benefits expenses and other factors, including the growing cost of litigation. In addition, an influx of private capital into the space is changing the risk landscape for providers.

Costs related to medical malpractice amount to about $60 billion for the health care industry. Medical errors are the No. 3 cause of death in the United States, and social inflation on top of economic inflation have pushed medical liability premiums steadily higher over the past decade. Medical professional liability E&S direct premiums grew to $3.21 billion in 2023, an increase of 6.9% from the previous year, and accounted for 26.3% of the total medical professional liability market in 2023, according to S&P Global.