Embracing Collaboration: Shaping the Future of Healthcare (Re)insurance

At the heart of healthcare liability insurance lies the intricate realm of medical malpractice.

Demanding a profound understanding of both the product and the healthcare sector, this specialized field is cultivated through years of medical malpractice broking and underwriting experience and requires a deep technical expertise. What’s more, no specific regional market is quite the same as the next. Medical malpractice is highly influenced by the geographical location of the insureds – or reinsureds – thanks to the necessary uniqueness and shifting variabilities of different litigation venues, local commercial realities, and societal, political and demographic factors.

All that is to say, this landscape is a highly complex, albeit fascinating one.

As a recently appointed managing director at BMS Group, I have a particular interest in the transformative power of collaboration as an invaluable approach to navigating a nuanced and highly changeable sector. I believe that breaking down organizational barriers and fostering cooperation across teams and borders is not just beneficial, but paramount, in addressing the ever-evolving challenges of medical malpractice and healthcare liabilities and providing the best possible service for clients.

Breaking Down Organizational Silos

Currently, one of the primary obstacles hindering effective medical professional liability (MPL) management is the presence of internal siloes between reinsurance and insurance broking teams. Throughout my career I have witnessed firsthand how breaking down these barriers leads to more innovative and bespoke solutions for our clients, ultimately driving better business outcomes. Closer collaboration not only facilitates the sharing of insights and best practices but also enables clients to benefit from advancements in healthcare leadership globally.

While the market in the U.S. is a highly sophisticated one, there are – clearly – innovations taking place in many other markets around the world. It is imperative we learn from these developments, or else risk falling behind.

There can also be negative consequences to a lack of collaboration between insurance and reinsurance teams. In some instances, clients have been underserved due to internal profit concerns overshadowing their needs for reinsurance protection. Take, for example, an MGA that has a binder with significant volume for them to become a fully-fledged insurer with the need for reinsurance protection, as opposed to insurance. If in this instance the delegated authority team were to take the view that the reinsurance would not benefit their own P&L – thus neglecting to pass on the client’s needs to their treaty team – this failure to collaborate would not only negatively impact their colleagues, but would also prevent the MGA from seeing the benefits of a joined-up approach.

Conversely, instances where closer collaboration has occurred demonstrate improved outcomes for cedents, hospitals, integrated systems or captives, leveraging resources across departments, such as actuarial and analytical services, has proven invaluable in enhancing risk management strategies for clients.

Working Together for the Benefit of Clients

The evolving landscape of healthcare necessitates a dedicated focus on understanding its intricate dynamics. It is crucial that broker advisors deliver meaningful and value-added solutions to clients through dedication and focus.

Technological innovations such as robotics, telemedicine and AI are reshaping healthcare delivery, presenting both opportunities and challenges. While these advancements hold promise for improving patient care, they also introduce new liability considerations. It is incumbent upon us as specialist advisors to ensure that our solutions adequately cover the evolving liability landscape.

In this rapidly changing world, the dilution of expertise works against the needs of highly specialized and niche healthcare cedants, hospitals, integrated systems or captives. For too long, medical malpractice insurance and reinsurance brokers have been clumped together with indiscrete casualty disciplines such as workers’ compensation, general liability and other non-aligned dissimilar professional liabilities such as bankers, lawyers and architects E&O, and even D&O (all of which exclude bodily injury being the essential component of medical malpractice).

The result? The emergence of advice and products that lack dedication and focus on the complex and changing needs of those in the healthcare sector and industry.

Success in the future will instead rely on an unfettered, highly focused approach, which speaks to addressing very specific challenges within the healthcare space.

Moreover, societal changes have contributed to an increase in litigation across jurisdictions, further underscoring the need for tailored risk management strategies. For instance, changes across common law and civil law countries have propelled an increase in litigation into venues that only five years ago were considered fair and “safe” jurisdictions. Staying ahead of these shifts is crucial to providing clients with comprehensive protection, and this can only be achieved by taking a more holistic, client-centric view.

Also, as well as breaking down organizational barriers for the benefit of clients, successful (re)insurers will continue to take a long-term view to risk management.

As an inherently niche product line, navigating complexity within medical professional liability can only be truly achieved by working and learning together. By breaking down internal barriers and P&Ls, fostering closer collaboration between teams, and staying attuned to the evolving healthcare landscape, we can navigate risks more effectively and deliver value-driven solutions to clients. As the industry continues to evolve, collaboration remains the key to success in mitigating risks and seizing opportunities in healthcare (re)insurance.