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  • Maintaining a financially
    strong mutual

  • Our capital strength and financial discipline is why members can rest assured we’re here for the long term.

    Financial security

    With over $1.2 billion in net assets, Avant has more than any other medical indemnity provider, giving you the confidence that we will be here over the long term.

    This financial strength enables us to deliver greater stability in premiums – a key objective of our financial management.

    Total net assets have grown and net assets per member continue to be stable at around $20,000.

    We believe this is a prudent level to hold to ride out any adverse conditions in the inherently volatile medical indemnity claims environment where, for example, a large number of claims can arise from a class action related to a faulty medical procedure.

    in net assets


    in net assets per doctor member

    More doctors choosing Avant

    This year we welcomed over 6,100 new doctor and medical student members.

    Avant continues to be the most selected medical indemnity insurer, with over half of doctors in Australia being Avant members.

    The steady growth in Avant’s share of Australian doctors is an endorsement of our philosophy, strategy and service.

    However, we do not take our members’ support for granted and strive to continually improve what we do.

    more doctors choose Avant

    Continued growth in diversified revenue

    Earlier this decade, we commenced a program of diversifying our revenue. Medical indemnity claims are inherently volatile from year to year; a broader diversified Avant provides greater stability and resilience to be able to ride out this volatility.

    The strategy enables Avant to leverage our scale and expertise to provide better products to Avant members than they would otherwise be able to access.

    Revenue streams from diversified products now make up a third of group revenue, with Doctors’ Health Fund contributing 28% of total revenue.

    Newly added products like our life insurance, business insurance and PracticeHub cloud technology service will continue to grow over time.

    annual revenue

    Claims costs environment

    We have seen an increase in civil litigation by 25% per doctor when compared with five years ago, although ardently defending members and managing civil litigation claims has helped constrain overall claims costs.

    The year saw an 8% rise in the frequency of civil litigation claims, which contributed to an increase in claims costs. These costs make up the biggest portion of medical indemnity expenses.

    Claims expenses will also rise proportionately with Avant’s membership growth.

    This year our reported claims costs have also been impacted by lower interest rates. This is because the money we have reserved to pay will have a lower return in the future, meaning a larger reserve is required today.

    Associate Professor Richard Cracknell

    Sound financial results

    Over the financial year, we worked hard to identify ways to manage expenses, without impacting the quality of service members receive by increasing efficiency within Avant.

    Our administration expenses as a proportion of revenue were once again reduced. We continue to invest in systems and infrastructure that increase operational efficiencies and improve service delivery.

    Our expense ratios remain among the lowest of any medical defence organisation.

    Prudent financial and claims management has delivered a surplus of $41 million for the financial year.

    A strong performance means Avant is well placed to manage indemnity insurance premiums over the years ahead. As a result, despite the increase in claims costs, we anticipate premium rates on average will go up less than in previous years. However, this will vary by member.

    financial results

    Prudent asset investment

    In addition to ensuring financial security, we look to make our assets deliver additional returns for members.

    Funds are invested in fixed interest securities, unit trusts and equities. We have a low risk investment strategy to limit the impact of market volatility.

    Financial markets have had a turbulent year and we are expecting this to continue.

    Low interest rate environment

    Returns on both short and long-term government bonds have fallen consistently in recent years. Interest rates are at historic lows both internationally and in Australia. This makes it more difficult for Avant to achieve returns on our assets.

    Claims can take a number of years to be resolved given Australia’s legal processes. Avant invests members’ premiums during this period and this enables us to pass this on to members via a lower premium. Lower returns does limit the impact of our ability to reduce member premiums.

    reserve bank

    Effects of the medical indemnity schemes

    In December 2018, the Commonwealth Government committed to maintaining and improving the medical indemnity schemes. Importantly, the Government’s support for the High Cost Claims Scheme (HCCS) and Exceptional Claims Scheme will continue. These schemes are critical to the medical indemnity industry and contribute to affordable premiums for doctors.

    Doctors have been able to access medical indemnity cover and the schemes have contributed to stability in doctors’ premiums, also a key objective for Avant. We have been an active participant in the Department of Health’s consultation on the future of the schemes and continue to work with stakeholders to improve new legislation as it is developed.

    Doctors’ Health Fund

    The 2018-19 financial year saw excellent growth for the fund, with an 18% increase in revenue over the previous year.

    This puts Doctors’ Health Fund among the fastest growing health funds in Australia, with the market as a whole only growing by 0.7%.

    Within the context of increased utilisation, health insurance premium rises are inevitable. In the latest premium rises, Doctors’ Health Fund recorded the lowest average premium increase across all health funds.

    DHF premium revenue

    The outlook

    Increasing expectations and more stringent regulations to protect the public are likely to result in the continued growth of complaints and legal action against doctors. This leads to increased litigation and claims costs.

    Predicting the future of financial markets is also difficult given global trade uncertainty.

    We are expecting increased financial regulation and volatility.

    Avant is in a very strong financial position to weather these market dynamics and minimise the impacts to our members. Our growth in recent years looks set to continue as we invest in supporting members and offer the best value products possible.

    We are committed to ensuring that we are here to help our members when needed.