In all departments – from eggs on grocery store shelves, car repair costs, mortgage rates, and the cost of seeing a doctor – Americans everywhere are more expensive on goods and services. Like people, businesses are seeing their costs rise. A keen sense is that in the medical field, providers face cost pressures from all angles that affect their ability to provide high-quality care (and repayment is reduced at the same time!).
For many doctors, they see a sharp rise in malpractice insurance premiums, which is usually the second largest fee for suppliers. In fact, since 2022, doctors’ insurance premiums have increased by 70% per year by 11% of providers due to increased nuclear rulings and legal fees escalation. While large awards may provide the necessary compensation for victims of malfeasance, they can also significantly constitute a health care system, increasing insurance costs and potentially limiting access to care. We ask providers to provide quality care while slamming them with incredibly high premiums – so the question is: Why are so many healthcare areas seeing innovation and change, but without this?
We live in the digital age and rely on technology to improve efficiency and convenience in every aspect of our lives. But for those applying for malpractice insurance, the process feels more in 1980 and less in 2025. To receive a quote, the provider must fill out a page of more than 15 pages to apply, send the documents to their malpractice medical malpractice insurance broker, and then wait for a few days or even weeks to leave the quote. Additionally, operators have traditionally evaluated the provider’s expertise, geography and claim history. But, like the stock market, past results do not always indicate future, with some providers having higher price ranges than their future risks.
AI’s Commitment
Over the past few years, AI has grown in popularity and accessibility, driving efficiency in various industries, and the medical malpractice insurance industry has matured with AI disruptions. While it is always important to have a certain level of supervision during the insurance coverage process, it is always important to leverage the power of AI to quickly synthesize publicly available socio-economic data, health care claims and other risk factors, thus creating a more accurate risk breakdown. Attract more data sources than the data sources used in the traditional quotation process, providing providers with better and more affordable quotes, and only with AI tools can do this in real time.
For example, in traditional medical malfeasance insurance underwriting, it is often believed that the cardiologist who operates is more risky than the cardiologist who does not perform the surgery. However, the data will tell you otherwise, depending on the activity that is actually performed by non-appearance. On the other hand, insurance companies often think that family doctors would be considered low-risk, but with the rise of opioids, we often see that primary care physicians who prescribe these narcotics are more likely to experience future claims than average. Traditional underwriting still takes a very superficial approach, while AI tools allow underwriters to easily and quickly mine large amounts of data that are more comprehensive and accurately understand the types of risks we can see from providers.
For traditional insurance companies, ten primary care physicians in the same office location look essentially the same. But the reality is that every doctor has a unique alternative data footprint that could have a significant impact on their future malpractice claims risk. The ability to customize pricing and personal-level coverage has the potential to significantly reduce the premiums for physicians with minimal risk.
Meet the needs of future providers
As the medical malpractice situation continues to evolve, we see providers facing new sources of risk, and innovation will be the key to narrowing these coverages. As new digital health tools emerge, which incorporate clinical workflows such as debris and AI chatbots, the risk for providers will also increase. A recent QBE survey found that despite the benefits of digital health tools, 63% of brokers reported that their clients were “very concerned” or “very concerned” with the risks associated with them. The survey also found that 60% of brokers reported an increase in the number of digital health-related claims for clients compared to a year ago. These modern challenges require modern approaches, and malpractice insurers must leverage AI and other technologies to help providers and brokers keep up with changes in the industry and better manage risks.
The current situation of medical malpractice insurance is no longer sufficient. While we must always prioritize accountability needs for medical malpractice, we must also consider how challenges increase premiums, rising costs and new risks that affect providers and lead to patients. AI can tame the cost of malpractice premiums and increase efficiency, helping support providers of good medicine so that they can focus on what matters – providing high-quality patient care.
Photo: Tonefotografia, Getty Images
Jared Kaplan is the CEO and co-founder of Indigo, an insurance company platform for AI-powered medical malpractice insurance companies. Jared held executive positions at several private equity-backed fintech companies before founding Indigo. Previously, he was CEO of APFI (NYSE:OPFI), a platform that powers community banks, as well as co-founder and EVP of Isureon, a leading small commercial insurance online agency. Jared also led financial services investments in Accretive, an early stage private equity firm. He began his career as an analyst at Goldman Sachs and holds a BBA at the University of Michigan.
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