How Will ACA End Up Impacting P/C Insurers?

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  • The Patient Protection and Affordable Care Act has been dominating headlines for years now, and much of the focus has – understandably – been on the ways in which the law’s various mandates will end up impacting the health insurance industry. However, new data suggests that it could also have a potentially huge effect on the property and casualty insurance sector as well, and that’s something for which agents will certainly have to prepare themselves.

    There are a number of ways in which the P/C industry will be affected by the various aspects of the new health care law, and perhaps the largest of them is that hospitals, health insurers, and other industry participants will likely try to shift more costs to these companies instead of paying them themselves, according to a new study from the Insurance Research Council. However, there are a number of other aspects that might end up affecting P/C companies as well, including a potential increase in fraud as more criminals find their way into the realm of P/C insurance from other types of coverage for which such scams are now more difficult to pull off, and as such there may be a moderate upward shift in costs. Further, the number of claims being filed with such companies likely also rise, leading to a minor increase in prices.

    On the other hand
    Fortunately for many in the P/C industry, there are a number of factors that may to reduce their costs as well, the report said. For instance, with fewer people being uninsured, fraud should go down overall even as more people turn their attentions to this new area. And while this might have a minor impact on cost, the fact of the matter is that there could be a potentially significant downward push for P/C insurers in this regard as future medical damages decline. However, it’s not yet clear the size of the impact this change will have. Finally, other factors such as Americans being healthier overall, and using coverage more appropriately, will also likely have an impact on cost, but exactly how they will do so is likewise still uncertain.

    Insurance agents selling this type of coverage will certainly have to keep a close eye on the ways in which any number of factors affect their business going forward, especially if there’s a significant uptick in the amount of claims that might once have gone through health coverage instead, as these could end up making things more difficult.