QBE’s decision to partner with underwriting start-up Invivo Medical has been greeted with enthusiasm by the medical community as a sign that commercial competition is returning to the medical indemnity sector.

Reports say the new joint venture may lead to premium cuts of 10-40%, saving a general surgeon between $3500-$15,000 a year.

At present medical indemnity cover is effectively underwritten by the Federal Government, which pays 80% of the premium if the premium is more than 7.5% of gross earnings.

Invivo was formed by experienced underwriter Katherine Henry, who will be CEO of the new company. She has reportedly spent three years researching the medical indemnity market.

She says demand in the medical community for greater choice and financial security was the catalyst for QBE to provide Invivo with the capital to achieve this. “We are confident that Invivo’s partnership with QBE will provide doctors with a highly competitive alternative to what is available to them today,” she said.

“We have a fully-developed and differentiated approach to risk classification, underwriting and service, and we will be taking this to market immediately.”

It’s understood the Invivo approach involves a US management model which brings the insurer and doctor closer together to assess risks and then work to manage them.

QBE Australia Chief Operating Officer Terry Ibbotson says the “fundamentals and dynamics” of the medical indemnity market have changed substantially.