Litigation in medical malpractice claims is increasing across Europe, and it is a trend that we expect to continue across both ‘claims made’ and ‘claims occurred’ markets.
The former policies cover incidents that happen and are reported within a policy’s timeframe and the claim lies with the original insurer that issued the policy, while occurrence policies have lifetime coverage regardless of when the claim is reported and which insurer has inherited the claim (if a book of business has been sold).
A split in the market
Currently, the European market is split, with Germany handling medical malpractice claims on a claims-occurred principle, while the rest of Europe works on claims-made principles.
Over the last 20 years, however, a combination of longer-term settlements and increasing treatment costs has meant insurers are looking closely at medical malpractice lines of business across territories.
Several factors are also impacting the cost of insuring medical malpractice, including a long-term and higher than inflation increase in the cost of treatments across the board, and an increase in longevity of claimants due to improved treatment options.
In Germany, larger players have already left the market and it is complex for new market entrants to join from a regulatory perspective. This, combined with the trend for increased litigation from social security carriers looking to recover long-term treatment costs, is driving up premiums.
Midwifery is a case in point, where in Germany the average self-employed midwife has seen premiums triple or even quadruple in some regions. This is an essential profession and clearly it is a situation that needs to be addressed.
Elsewhere in Europe
Beyond Germany, the claims-made principle markets in Spain and Italy see a more competitive environment between insurers, with higher fluctuations on coverage, and a rapidly changing picture in terms of market participants in recent years, particularly with respect to hospital insurance.
However, where some of the key players have underwritten significant lines, they are now in danger of claims developments catching up with them.
We are also seeing increasing direct requests from hospitals in Spain and Italy to enquire around self-retention of risk, with claims managed by Pro’s experts, as a more cost-effective alternative to the private insurance market. This also has the advantage of allowing hospitals to recover VAT.
It is likely that the pandemic crisis will have an impact on future medical malpractice claims, potentially driving up claims against hospitals and care home settings where it can be proven that patients originally contracted the virus.
Although it must be highlighted that we have not seen this trend emerge as yet, the impact of COVID should be a top priority for insurers taking on medical malpractice today, especially as the long-term impacts related to COVID on an individual level are still largely unknown.
Proactive claims management
Medical malpractice is, understandably, a very emotional and sensitive topic, and often leads to complex, multifaceted claims. But the reality is that most claims costs tend to be associated with social security carriers trying to recover money from insurers, over and above individual claimants, who rarely have to battle to recover costs for ongoing treatment and support.
Regardless of whether claims occurred or claims made principles are governing in the territory, we expect litigation to increase across Europe in the coming months and years.
A clear view of your exposure
As such, we strongly believe that insurers should embark on thorough reserve analysis and portfolio reviews, and carefully assess their claims administration procedures to ensure they have the most efficient, cost-effective procedures in place.
Providing clear and quick settlements wherever possible is essential in the medical malpractice market, while at the same time keeping control of legal costs and expenses.
This is prompting some innovative thinking from insurers and companies like Pro that work with insurers and medical establishments to help manage claims. Pro’s experts approach medical malpractice portfolios proactively, using a systems and data analytics approach to identify trends.
We also partner with medical malpractice experts to help advise on complex cases, and work to appoint panel law firms that reduce the timelines of claims disputes – a factor that works to the best interests of both claimants and insurers.
Having independent, expert advice during arbitration and litigation is essential to achieving transparent negotiating with policyholders and cedants.
Please get in touch to find out more about how Pro’s medical malpractice experts can support you.