Demystifying medical indemnity insurance premiums

Michael Lynch, General Manager – Product and Chief Reinsurance Officer, Avant

Tuesday, 14 May 2024

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Like any other profession, medicine is not immune to rising costs and inflation, and some doctors may be worrying about their finances including medical indemnity insurance premiums.

A recent media report highlighted premium increases in some specialities. The reality is average increases for the majority of Avant members have been below CPI for the last few years and will be similar for the upcoming financial year renewal.

Keeping premiums stable

The main driver that allows us to keep premiums stable is our financial strength, which comes from prudent financial management and strength in numbers, with membership surpassing 85,000.

Another key driver is our extensive claims data, which we use to manage claims and pricing to ensure we can cover the costs now and in the future.

Also, the affordability of Avant’s premiums is reflected in the median premium-to-billings ratio (the amount you pay for medical indemnity insurance and the billings you earn for the private healthcare services you provide), which is less than 3%. This ratio has been at a similar level over the past five years, despite the uncertainties we faced through the pandemic and with inflation surfacing and remaining persistently high, especially for insurance products.

Though premiums are stable for most of our members, we acknowledge approximately one percent have experienced double-digit premium rises due to a significant increase in the frequency and severity of claims in their specialty. Also, a cohort of members participating in Avant’s Getting Started in Private Practice program may have seen higher increases because their discount has been reducing year on year.

If your premiums-to-billings ratio is high, you may be eligible for an Australian Government Premium Support Scheme subsidy.

Factors that influence premiums

We understand member’s circumstances are different, and there are individual and industry factors that influence your premiums.

Infographic of factors that increase your medical indemnity premium: Specialisation, gross annual private billings, your claim history, industry litigation rates and cost of claims, increase in demand for medical-legal advice, inflationary pressures.

Individual factors

Specialisation: Includes work a member does in their professional practice and excludes work outside of this. While medical indemnity insurance takes individual circumstances into account, it also considerers claims in their cohort. As a rule, the higher risk the healthcare, the more a member can expect to pay for their medical indemnity cover.

Gross annual private billings: Includes income generated by a member from their practise and reflects the number of private patients they see and the type and volume of healthcare services they provide. It is likely gross private billings will change as a member progresses through their career.

Claims history: Includes personal liabilities that may arise from members' provision of healthcare by way of civil claims and non-civil claims. Medical indemnity insurance is a claims-made policy, which means doctors are covered for incidents from their past healthcare and claims made against them by patients and other third parties when the claim is made and not when the incident occurred.

Industry factors

Litigation rates and cost of claims: Social inflation, resulting from increasing litigation and costs, is driving the increasing cost of claims. Litigation funding and legislative changes also impact the cost of claims.

Inflationary pressures: Includes inflation pressure on the cost of claims and operating expenses. These pressures increase the cost of claims and are built into the claims settlement calculations.

Increase in demand for medico-legal advice: There has been a steady increase in demand for medico-legal advice in recent years, and over the last 12 months, our team responded to more than 30,000 calls.

Fair pricing for extensive cover and protection

Your medical indemnity insurance protects your reputational and registration risk by responding to complaints and your financial risk by responding to patient claims. It may not be until you’ve experienced a claim that you appreciate the extent of your cover, and Avant premiums are reflective of the extensive cover and protection we provide.

In 2022-23, we experienced an average frequency of 105 claims per 1,000 members and using our specialty-specific claims data to draw on, we identify the cover members need and regularly update our policies to reflect the changing healthcare environment.

Our focus is to deliver strong defence and advice so members can focus on doing what they do best, caring for their patients.

More information

If you would like to discuss your Avant medical indemnity premium, call us on 1800 128 268.



Professional indemnity insurance products are issued by Avant Insurance Limited, ABN 82 003 707 471, AFSL 238 765. The information provided here is general advice only. You should consider the appropriateness of the advice having regard to your own objectives, financial situation and needs before deciding to purchase or continuing to hold a policy with us. For full details including the terms, conditions, and exclusions that apply, please read and consider the policy wording and PDS, which is available at or by contacting us on 1800 128 268.

Avant Law’s liability limited by a scheme approved under Professional Standards Legislation. Legal practitioners employed by Avant Law are members of the scheme.

This publication is not comprehensive and does not constitute legal or medical advice. You should seek legal or other professional advice before relying on any content, and practise proper clinical decision making with regard to the individual circumstances. Persons implementing any recommendations contained in this publication must exercise their own independent skill or judgement or seek appropriate professional advice relevant to their own particular practice. Compliance with any recommendations will not in any way guarantee discharge of the duty of care owed to patients and others coming into contact with the health professional or practice. Avant is not responsible to you or anyone else for any loss suffered in connection with the use of this information. Information is only current at the date initially published.

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