Medical Malpractice Insurance in Significant Global Markets
London, 23 October 2020 – The total value of medical malpractice premiums in five major global markets has shrunk in real terms between 2015 and 2019, as the public sector has had to take on more of the cost in key markets. This is one of the key findings from Finaccord's newly released report Medical Malpractice Insurance in Significant Global Markets which analyses the market for medical liability in 15 countries: Australia, Austria, Belgium, Canada, France, Germany, Ireland, Italy, the Netherlands, South Africa, Spain, Sweden, Switzerland, the UK and the USA. In addition, the study quantifies the size of the medical malpractice insurance market globally, with estimates for other important countries such as Brazil, China and Japan.
The decline was partly caused by a falling number of enterprises eligible for this type of cover in some countries, such as Italy and the US, while in both Italy and the UK the public sector is playing a greater role in taking on the burden of liabilities. Premiums paid by public health institutions in Italy nearly halved between 2010 and 2019 and were replaced by self-insurance backed by the Ministry of Health. In the UK, the market was affected by the introduction of state-backed schemes for England and Wales in 2019 which provide cover for general practitioners when treating patients within the National Health Service (NHS). As a result, these practitioners need much less cover from providers such as the Medical Defence Union (MDU) or the Medical Protection Society (MPS).
“In contrast to changes in these countries, the market continues to grow elsewhere with further increases anticipated up to 2023”, commented Emiliya Belcheva, Consultant at Finaccord and co-author of the series. “Canada, Ireland and Switzerland have each produced compound annual growth rates in excess of 5% and they are among the countries where the value of the medical malpractice market is likely to increase in real terms over the next three to four years.”
The report also looks at affinity schemes for medical malpractice cover between insurance providers and professional associations. Finaccord researched 814 organisations in total which were split into two categories: healthcare-related services, and medicine and dentistry. The latter incorporates medical and dental practice activities plus hospital activities while the former takes in other human health activities and veterinary activities. Emiliya Belcheva continued, “The provision rates varied widely between the countries, from 30% to nearly 90%, with an average of just over 50% across the 15 countries analysed. Most associations in the category of healthcare-related services had a partnership for professional indemnity insurance (at 56%), while the provision rate among medicine and dentistry organisations was significantly lower, at 34%.”
Another finding of this research is that these schemes are dominated by brokers, who were involved in more than 70% of these partnerships. In contrast, only 20% of them operated with external underwriters without the involvement of a broker.
Emiliya Belcheva also commented on the future of the medical malpractice market in the wake of the COVID-19 pandemic: “Finaccord has assumed a sharp recession in 2020 followed by a gradual economic recovery through to 2023. We expect a very modest growth in the countries where the value of the market increased rapidly between 2015 and 2019 and we believe that the total premiums in the 15 countries researched will decline in real terms.”
Media contact: David Parry, [email protected]
Notes to editors:
Finaccord is a market research, publishing and consulting company specialising in financial services that is a part of Aon Global Operations SE Singapore Branch, a part of Aon plc (NYSE: AON). It provides its clients with insight into and information about major issues in financial services around the world, with a particular focus on marketing and distribution topics such as affinity marketing, bancassurance and strategic alliances, as well as commercial lines insurance.