C O N S TA N T I A INSURANCE
CONSTANTIA INSURANCE
Specialist Cover from the Experts in Care PRODUCTION: Timothy Reeder
When Constantia saw the catastrophic effects that medical negligence claims and unaffordable premiums were having on the quality of the country’s healthcare, it decided to act. CEO Volker von Widdern briefed us on the reception which the first home-grown medical indemnity insurance product has received, and how its specialist focus will allow Constantia to capture the rest of the market.
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When Enterprise Africa spoke with Constantia CEO Volker von Widdern in March last year, he spoke of the ‘crisis’ which was sweeping through the South African medical profession, and obstetricians in particular, with rocketing medical negligence premiums forcing them out of business in droves. “This is a crisis. They have trained for 20 years to practice and now they are fearful of being attacked. Their livelihoods and their personal environments are being turned upside down,” was von Widdern’s
take in March 2017. Coupled with the inescapable prospect of an imminent ‘attack’, it was proving ruinously expensive for doctors to adequately arm themselves against the astronomical claims that were beginning to arise. “High premiums are driving doctors out of the industry,” underlined von Widdern last year. “Underlying insurance premiums have gone up very quickly in the last three or four years - a tripling. For certain specialist sections this has made them unaffordable.”
ENTER ETHIQAL Constantia knew it had to react, and came up with a product capable of restoring doctors’ faith in the pursuit to which they have dedicated themselves, sometimes for entire professional lifetimes. EthiQal is a comprehensive Medical Indemnity solution developed for South African Medical Practitioners by Constantia Insurance, which has more than 60 years of experience serving South Africa. When Enterprise Africa last spoke to von Widdern, EthiQal was fairly “new to the business,” and performing well.
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Today, he confirms that this good start has been sustained, and even bettered, since. “The response to EthiQal has been incredibly positive; we have achieved nearly 20% of the market share among private sector specialists in South Africa in the two years since its introduction.” Until EthiQal’s introduction, very few local insurers extended Professional Indemnity cover on an Occurrence basis to doctors, and even fewer offered cover to those in high-risk practice areas. This meant they were forced to turn to overseas insurers for protection in malpractice cases. “We have developed EthiQal according to Such African risk profiles, cutting out the unfair skewing of premiums to certain practice categories - something that happens all the time when working with international risk profiles,” von Widdern informs us. He also details a further reason -
Constantia CEO Volker von Widdern
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arguably the most pressing - behind EthiQal’s advent: the threat to top-quality care which was increasingly prevalent. “A 2017 survey polled higher risk specialists, and found that they certainly feel aggrieved at the unnecessary exposure to litigation they face,” he outlines, going on to detail the result of this unease. “As well as talented doctors simply retiring, what we see more of now are both defensive and restrictive medicine - a gynaecologist might only track a pregnancy for the first three months, for instance, or others will be limited to caesareans, for example. There are real outcomes of that nature, and we do not have the surplus of medical talent and resource in South Africa to be able to absorb such a reduction in the amount of care available, and to have any restriction of activity is a massive headache to all.”
OPEN TO ALL Constantia’s Gerald Mathebula was recently keen to clear up a misconception which had begun to circulate regarding EthiQal’s universal availability. “It has come to our attention that there is perception in the market that EthiQal does not provide quotes to doctors who are 60 years and above,” he said. “At EthiQal, we consider cover for all doctors, taking note of their personal circumstances, including their medicolegal history.” It was a sentiment echoed by von Widdern, who explains more on Constantia’s current real target demographic. “We are open to all classes of doctors, and we now go now right through to age 75, which is obviously way past the normal age of retirement. “We do, however, have a focus on specialists,” he explains. “We also recognise that in rural areas there are general practitioners who have to do it all: births, operations, orthopaedics; because they are the only people there and are running the clinic; we want to support them as well. “There are 20,000 other GPs in South Africa, however, who do family work and so forth, and when you consider that context, we have clearly not yet reached an industrial level service model which can properly address that many diverse needs. That’s why we aim to attract the specialists; if we can reach around 3000 specialists and properly look after them, we’ll move along from there.” The professionals already on board with EthiQal are finding that this historically onerous and potentially ruinous process has been totally overhauled. “Thankfully our claims exposure is still very much in the negotiation and mediation stage,” says von Widdern of how it has been employed to date. “From that point of view, we are at least proving that a better model can work; we have not incurred substantial litigation or been in massively adversarial situations, even though we have over a thousand doctors with us at this stage.
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“We are very much engaged in those significant conversations, where people believe there are issues for which the doctor is responsible, but it has not reached the stressful, dramatic scenario of huge litigation. We respect both the doctor and the patient’s rights, which is a key part of how we are trying to change the engagement process.” Von Widdern is clear on what he wants EthiQal to become. “We would like to be the pre-eminent provider,” he tells us, “which means we need to hold about 50% of the market share. “I feel we have an excellent chance of getting there within the next two to three years. NEXT STEPS “We have started a journey, which is nowhere near finished, where we are trying to change the whole engagement model of medical malpractice insurance so that we have a better relationship with all of the key areas of risk in the market. “This is from the bottom up, so starting at patient engagement and going through consent, to clinical risk to how litigation and mediation works, right to the settlement models that are most fitting to a patient’s needs. “These are the components of the major risk and cost drivers on the market and we’re making substantial progress on each,” von Widdern espouses. Now that EthiQal is proving so impactful upon its intended recipients, Constantia
// THE RESPONSE TO ETHIQAL HAS BEEN INCREDIBLY POSITIVE; WE HAVE ACHIEVED NEARLY 20% OF THE MARKET SHARE IN THE TWO YEARS SINCE ITS INTRODUCTION //
as a whole can turn its attention to the endeavours which will be next to bring the plaudits. Its historic partnership with EFC was a splendid example, to allow athletes to be provided with medical insurance, at no cost to them, and entirely offset the expense of treating injuries sustained whilst competing at EFC events. “Until now, in order to compete at EFC it has been a requirement that athletes have private medical aid covering them for professional MMA competition, and EFC has contributed towards the cost of the athlete’s medical aid, but now all this changes with this new partnership,” said EFC president Cairo Howarth. “Constantia Insurance maintains a deep and meaningful relationship with its clients, much like ourselves and our athletes.” According to von Widdern, there is a wealth of innovation taking place as we speak at Constantia. “We are in the completion phase of the first four products that we wished to develop this year. One is a commercial assets policy for business, and then we have a product tailored for small to medium-sized business called InBiz. Small businesses cannot be expected to predict the kinds of risks which they may encounter as they don’t have professional risk managers on staff, so we have accounted for that by building an innovative ‘any other risk’ feature’ into the offering.
// FROM A CLAIMS POINT OF VIEW WE ARE PROVING THAT A BETTER MODEL CAN WORK // “We have also got our personal lines - a retail product which is completed, and a really interesting approach to the body corporate space. Those four are all in rollout now. “We have also launched our SME group life product, a very compelling offering and much cheaper than the industry rates as we go about sourcing data about our clients differently, and we are also in the process of developing new funeral products which will be ready in the first quarter of next year.” Constantia makes insurance personal, but it also introduces valuable, arguably life-saving products with a regularity which makes it impossible to better. We look forward to reporting on another year of innovation and dominance for this great South African insurer.
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ENTERPRISE AFRICA
DECEMBER 2018