As the fourth biggest contributor to Australia’s GDP, it’s fair to say the nation’s healthcare sector is booming and one senior figure says this offers a potentially lucrative opportunity for brokers – as long as they take the time to understand the industry.
Eric Lowenstein (pictured) is the CEO of specialist medical underwriter Tego – he says underinsurance remains chronic across the sector, with organisations in desperate need of tailored advice and solutions.
“Thousands of Australian medical practices have no entity medical malpractice insurance – that creates untapped potential for brokers,” says Lowenstein, who founded the firm in 2015. “Those practices rely on individual medical practitioners to have their own insurance to respond to adverse outcomes from their patient care – but practices face risks that may not be covered by practitioners’ individual policies.”
According to Lowenstein, practice protocols, staff errors and system failures can all contribute to poor patient outcomes, exposing practices to legal action or complaints that fall outside of individual policies. Cyber uptake, too, is worryingly low.
“While take-up is on the rise, many healthcare entities have no cyber cover,” he says.
Lowenstein’s comments come after the agency expanded its product suite to include entity medical malpractice, life sciences, and clinical trials – a move which comes as many of the major insurers continue to back away from the sector.
“There are limited insurers in healthcare and even fewer writing life sciences and clinical trials. Appetite is drying up and several insurers have retreated,” says Lowenstein.
According to Lowenstein, even those that are still writing business are becoming more conservative, particularly around issues like vicarious liability and abuse liability.
“One insurer has removed vicarious liability cover,” he tells Insurance Business. “But it’s a complex area of insurance law and removing the cover can create significant uninsured losses and potentially expose brokers to E&O risk.”
However, for brokers who take the time to familiarise themselves with the industry, the benefits can be substantial.
“The sector is highly reliant on specific advice from brokers,” says Lowenstein, who adds that Tego regularly engages its broker network with specific training about the market and product specifics.
“I am amazed at the untapped value often sitting with brokers’ existing clients. In standard GP practices, there is often a broad range of insurances brokers are not assisting with.”
