As senior living providers prepare for approaching renewal periods, we wanted to provide an update on our view of the changing marketplace. This will aid you and your team in determining your risk tolerance appetite and preparing your budgets for potential increased costs and decreased coverage.
Unfortunately, the cost of purchasing coverage is increasing nationwide for all providers. Current trends as of this blog:
Peter Feeney, a trusted business partner with Healthcap – a carrier specializing in professional and general liability insurance shares the following: Senior living liability is in a classic "hard market" which is characterized by increasing loss costs after a prolonged period of declining premiums for facilities. Hard markets are hard to predict but occur every ten to twenty years. The last hard market for senior living liability was twenty years ago. In the past three years dozens of carriers abandoned senior living because of declining premium rates, deteriorating loss experience due to "social inflation," and over a decade of low investment returns. In other words, they lost way too much money. The relatively few carriers that continue to write senior living liability are substantially raising rates and tightening terms in attempt to rebalance premiums and risk.
HealthCap has always emphasized risk management as a means of driving down claim frequency and severity and that is no different in the Covid era. HealthCap has intensified our member outreach from the beginning of the lockdown to the present including expanding our risk management advice, consulting and materials at www.healthcapusa.com.
Prior to the pandemic, a number of carriers had left the marketplace for senior living operators. Those remaining have instituted a number of changes, most notably one of the largest writers – CNA is in the process of transitioning occurrence policies to claims made. They are also mandating a COVID Exclusion on all new business, Class Action Exclusion is being applied to new and renewal business along with Communicable Disease Exclusion and Pandemic Exclusion. A number of other carriers are implementing COVID/communicable disease exclusion as well.
Some miscellaneous market trends that are being seen include:
Important claim trends to be aware of that contribute the stance carriers are currently taking:
The AP Senior Living team stands ready to partner with our clients in navigating the renewal process to achieve the best possible solution for each organization’s needs. Now more than ever, it’s imperative to partner with a broker that provides resources to assist in mitigating losses and can marshal the legal expertise to advocate for swift claim resolution. To learn more about our proactive, clinical and legal services, contact our team of senior living professionals.
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