The MDU has an established risk management procedure (premium element adjustment). This was due to an improvement
which includes assessment of insurance/reinsurance security, in the insurer’s claims experience.
currency risk and staff development and retention policy. It
also has a conflict of interest register and procedures to ensure
The insurance arrangements provide each paying member of
that members are treated fairly. These are regularly reviewed
the MDU in the UK with the security of an individual insurance
by the Board to ensure that the necessary procedures and
policy in his/her name. The insurance policy provides cover up
strategies are in place to manage risks appropriately.
to £10m for claims first made in the policy period, including
indemnity and legal costs, arising from an incident whilst a
member.
Key performance indicators
The MDU monitors its business activity by means of a number
The MDU has a reinsurance programme, which includes
of key performance indicators designed to track the activity
additional protection for discretionary claims. The amount of
and achievement of the company. The Board considers the
reinsurance recoveries in 2008 was £5.3m (2007: £1.3m).
following on a quarterly basis: Medical and dental advisory costs along with administrative
costs amounted to £26.9m in 2008 (2007: £24.6m), the increase
1 Membership statistics
of £2.3m reflecting enhancements in the medical and dental
advisory services for our members.
The MDU monitors all areas of its membership and evaluates
any movements in renewals activity; leavers; junior doctors,
graduate and student applications, and recruitment overall.
Assets/Indemnity Provision
The balance sheet for the MDU now shows total assets of
2 Quality of service
£178m compared to £132m in 2007. This improvement is
mainly due to good operating performance in the year and the
The company monitors, by means of regular membership
benefit of the premium element adjustment referred to earlier.
surveys, satisfaction with service levels provided by the medical
and dental advisory, claims and membership departments. In assessing the provision for indemnity, the MDU takes
The company welcomes comment from members on the account of all reported incidents notified up to the balance
quality of services provided. sheet date. This includes all notifications from members
including incidents relating to potential claims, pre-claims
3 Financial performance
where incidents are still being investigated and actual claims
where there has been a demand for compensation or where
The Board reviews on a quarterly basis the MDU’s overall
legal proceedings have been served. It does not include any
financial performance including subscription levels, insurance
case where the Board has declined to exercise or to continue to
premiums, claims payments, legal costs and claims reserves.
exercise its discretion to assist.
These are highlighted below in the Financial Review.
No provision is made for claims that may arise from incidents
The company is committed to maintaining strong
occurring before the balance sheet date but not reported to
management, organisational effectiveness, tight cost control,
the MDU at that date, or for defendant legal costs. Nearly all
and appropriate investment in systems and technology to
paying members now have an insurance policy and, for those
deliver the optimal service to members.
who do, such claims are covered under the terms of the policy.
Financial Review
The level of indemnity provision, see note 13(a), has been
estimated on the advice of consulting actuaries taking all the
Income
above factors into consideration, and is shown in the accounts
Subscription income for the year ended 31 December 2008 was
at £143m (2007: £129m). This increase includes the effect of an
£181m (2007: £176m).
adverse difference on the sterling/euro exchange rate at year
end of some £15m.
Over 97% of subscriptions come from our UK members, the
remainder being from our members in Ireland.
In summary the MDU concentrates on providing the best
advisory, risk management and claims handling service to
Added to the subscription income is investment income for the members, with the financial security of insured claims and
year of £6.2m bringing the total mutual income for the MDU associated legal costs being provided through regulated
group in 2008 to £187m (2007: £178m). insurance.
This is my last Annual Report, as by the time you read this I will
Expenditure
have been retired for some months. I am pleased to say that
In 2008 the MDU paid out on behalf of its members £31m in the MDU, your company, whose Board and management are
discretionary indemnity claims and legal costs (2007: £25m). focused on members’ needs, has an increasingly strong
Within the £31m of indemnity and legal payments for 2008, financial and membership base. I wish the company and my
£4.8m (15%) relates to our Irish members’ claims. successor, Dr Christine Tomkins, every good fortune.
Insurance and reinsurance premiums in 2008 were £106.6m
(2007: £108.7m).
Following the successful renegotiation of the new insurance
arrangements with SCOR in December 2007 the MDU has
again been able to benefit from a positive adjustment of Dr Michael Saunders
premium of £20.8m in 2008 (2007: £28.2m) – see note 4 Chief Executive
43
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74