Due to continued losses, the Professional Indemnity (PI) market has experienced hardening since 2017. There has been no let-up in 2020 and 2021. If anything, it has accelerated with premiums continuing to increase and insurers reducing their appetite and capacity for PI risks.
This article covers how these developments (and more) may affect podiatrists - but keep reading as it’s not all doom and gloom! It just shows the importance of finding insurance cover that works for you. Here are some key issues to be aware of, all of which have the potential to affect podiatrists directly or indirectly.
1. Australian market conditions
Our local market is limited to a small number of key insurers willing to write ‘allied health exposures’, which is simply a way of saying that these key insurers are less willing to expose their risk profile to the allied health sector. Long-running formal investigations, in particular Royal Commissions, continue to expose vulnerabilities across the healthcare sector, with increasing media scrutiny serving to raise public awareness and expectations around the quality of care provided to our disabled and aged care communities.
With exposures often falling in the grey area between General Liability and Medical Malpractice/Professional Indemnity policies, there has been a noticeable shift as insurers seek to realign their appetites across both classes of insurance.
- Mental health changes
In line with global trends, losses arising from mental health and substance abuse issues are on the rise with more attention needed to ensure appropriate mental health plans are in place for affected individuals.
- Patient privacy
Failing to adequately protect patient privacy is also squarely in the spotlight. The Office of the Australian Information Commissioner declared the health sector has consistently reported the highest volume of data breaches compared to any other industry sector since the commencement of the Notifiable Data Breaches scheme in 2018.
- Telehealth
The rapid adoption of telehealth has created new concerns in some sectors of the insurance industry around healthcare best practice and security of personal information. While the rush to embrace telehealth has been necessary for patient and staff safety, it is clear that some illnesses or injuries can’t be effectively diagnosed remotely. Telehealth potentially carries an increased risk of miscommunication and misdiagnosis due to an inability to conduct physical examinations, and the potential for a break in the continuity of care for new patients. In addition, the added reliance on technology brings a complex web of risks that extend beyond the scope of Medical Malpractice/Professional Indemnity insurance that should be considered; in conjunction with organisational, clinical and privacy law requirements.
Telehealth does, however, bring many benefits and efficiencies and post COVID-19, there is an expectation that telehealth consultations will continue, forever changing the way allied health is delivered.
- Reduced insurer capacity
A key issue has been a widespread reduction in insurers’ capacity; reductions from $20 million to $10 million or even as little as $5 million in some cases are common. New insurers need to be found to add capacity, so that larger limit programs can maintain overall limits. This has come at a time where insurers’ appetites are at their lowest in several years.
2. Increasing premiums globally
Going further afield, the second major factor in the market is premium increases. Rises of 50% to 100% are common and we have even seen increases as high as 2000% in some extreme cases. According to the Australian Prudential Regulation Authority (APRA), statistics show that the average premium per risk for the first quarter of 2020 increased by 85% when compared to the same quarter in 2019.
3. Tightening coverage
The third key factor is that some insurers are continuing to roll back coverage previously provided. As relatively good news for podiatrists, the construction industry has borne the brunt of this tightening as insurers seek to limit cover for contractual liabilities that extend risk beyond the usual standard of care that is expected of professionals in the sector.
However, all of these factors have led to a current marketplace where premiums have continued going up (even where insurance revenues are down due to COVID-19), with policy limits, deductibles and breadth of coverage coming under sustained pressure.
4. London market conditions
What happens in London can affect podiatrists in Australia. Here’s why.
London is under significant pressure, with underwriting losses and lower investment returns leading to well-known insurers such as SwissRe, MS Amlin and ChinaRe exiting the healthcare sector over the past 12 to 24 months.
More recently, Zurich has closed its doors to new business and other insurers are considering this course of action as global directives take effect. The London market is expected to continue hardening throughout 2021 with an increasing use of co-insurance and self-insurance due to severe capacity restrictions.
Summing up
All of these indicators point towards a shifting marketplace that is constantly assessing its exposure to risk. It is critical that robust planning processes produce detailed renewal strategies to account for multiple contingencies, with a view towards sourcing alternatives to the traditional insurance marketplace where necessary and possible.
With all this said, podiatrists present as a good risk for insurers, with small claim numbers. So premiums are not rising for APodA members in 2021.
Whilst podiatrists have a low claims frequency, the majority of incidences being reported are regulatory complaints.
Get in touch
Head here to find out more about the BMS Risk Solutions program (which is available at special rates to members of the APodA). You’ll find a breakdown of fees and cover options at the link, or simply contact the team at BMS by phone on 1800 514 933 or email podiatry@bmsgroup.com
