Learn the meaning of loss ratio
By Merilee Dannemann | Triple Spaced Again
If you have never heard of the term “loss ratio,” consider yourself lucky. That means you have never had to learn a certain unpleasant truth.
“Loss ratio” means how much insurance companies have to pay for losses and other expenses compared to how much they earn in premiums. In other words, it expresses how much money they are making or losing.
So when I read that the loss ratio for medical malpractice insurance in New Mexico is 1.92, I just about jumped out of my skin.
Insurance companies have been spending $1.92 in claims or other expenses for every dollar they earn in New Mexico from medical malpractice insurance.
This number was presented to a legislative interim committee in November 2025 by the state Superintendent of Insurance, Alice Kane. That was a few months before the legislature passed the malpractice reform bill, House Bill 99.
Kane said New Mexico has the highest malpractice loss ratio in the country. With that number, it’s hard to imagine why any insurance company would be willing to sell malpractice insurance here.
For comparison, here’s what happened more than 30 years ago when New Mexico had a workers' compensation crisis.
In the late 1980s, the loss ratio for workers' compensation in New Mexico was just above 1. One news report at the time said insurers were paying $1.21 for every dollar in premium. Most insurers had stopped selling workers' compensation insurance in New Mexico.
The workers' compensation reform was passed in 1990, and it took about three years for the reform to bring costs down. That is because there were still lawsuits moving through the courts. Each case would be decided according to the law in effect when it was filed.
A few years later, New Mexico workers' compensation was a success. Now, we desperately need a comparable success with medical malpractice.
Since HB99 was passed, it will take a while before the loss ratio goes down to anything approaching an acceptable number.
Malpractice cases under the previous law will be going through the courts for at least another year or two. The new law, with the promise of lower premiums, is just one modest step toward stemming the loss of doctors in New Mexico.
Meanwhile, the new law is not safe from possible attempts by trial lawyers and so-called patient advocates to undo it by future legislation or court challenges.
And there’s a new number all ready to confuse us.
The number is 3800. That number was mentioned in a recent legislative hearing – as an increase in the number of doctors licensed in New Mexico. The number is accurate but misleading.
So informed New Mexicans must be made aware that the number does not mean the number of doctors practicing in New Mexico. The number was presented by the New Mexico Medical Board, whose spokespersons clarified that this number does not mean that we have more practicing doctors.
Apparently there are reasons why a doctor might park a license in New Mexico without intending to practice medicine here.
The board spokesperson explained that fewer than half the licensees are even registered with a New Mexico address. Other data was offered to confirm what New Mexicans are experiencing: the state does not have enough doctors, and many have left because of unacceptably high malpractice rates.
As you have heard repeatedly, New Mexico is the only state to have lost doctors in the last few years; one study shows we lost 8.1% of doctors between 2019 and 2024.
The fight to save our medical care is not over and no doubt the arguments will be confusing. Just remember, when you hear the number 3800, think of the number 1.92, and the term “loss ratio.”
Merilee Dannemann’s columns are posted at www.triplespacedagain.com. Comments are invited through the web site.
Journalist Merilee Dannemann was a public information and public policy professional at the New Mexico Workers' Compensation Administration.
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