In the face of rocketing premiums for medical liability cover, which is driving high-risk specialists such as gynaecologists and obstetricians from their professions, an insurer has developed South Africa’s first home-grown medical indemnity insurance product.
Recent media reports have highlighted the crisis facing doctors in private practice, who are paying tens of thousands of rands a month for cover against patients suing them for medical malpractice. Obstetricians have been particularly hard hit. According to the South African Society of Obstetricians and Gynaecologists, the annual cost of medical liability cover for an obstetrician, which was R180 000 in 2013, is expected to be more than R800 000 next year.
The premiums are high because the claims can be high: children disabled at birth, for example, can claim, through their parents or guardians, or when they reach adulthood, not only for medical expenses, but also for living expenses for their entire lives. Claims of R20 million or more are not uncommon in these cases.
Until now, few local insurers have covered doctors, and there has been no cover for those in the high-risk areas of practice. These doctors have had to look to overseas-based insurers and international organisations, such as the Medical Protection Society (MPS), to protect them in malpractice suits.
Now, Constantia Insurance Company has launched EthiQal, which offers occurrence-based liability cover, as well as claims-based cover, to the medical profession. (With occurrence-based cover, you must be insured when an incident that gives rise to a claim occurs. If you take out claims-based cover, you must be insured when the claim is made.)
Apart from ensuring that the revenue from the premiums will remain in South Africa, EthiQal has been tailored for the needs of doctors in this country.
Constantia’s chief executive, Volker von Widdern, says its research identified a strong demand from South African practitioners for “stable and sustainable” premiums based on the risks facing the local private sector, backed by on-the-ground professional support for doctors facing litigation or disciplinary proceedings.
“We have developed EthiQal according to South African risk profiles, cutting out the unfair skewing of premiums to some practice categories – something that occurs all the time when working with international risk profiles,” Von Widdern says.
Constantia, a subsidiary of Conduit Capital, has solvency capital in excess of the Financial Service Board’s requirements, Von Widdern says, and is re-insured by a leading global re-insurance company.
In comparison to the R800 000 a year obstetricians will have to pay next year to the MPS for liability cover, the EthiQal premium for obstetricians is about R526 000 (excluding VAT), Von Widdern says. Premiums will stay fixed until 2019, according to the EthiQal website. Cover is up to R50 million per incident.