Skip to main content
Survey Report

Insurance Marketplace Realities 2020 Spring update – Senior living and long term care

N/A
COVID 19 Coronavirus

May 7, 2020

The senior care industry is ground zero for COVID-19 in an already hard market.
Rate predictions
  Trend Range
General and professional liability
Favorable loss experience and venues
Increase (Purple triangle pointing up) +10% to +50%
Adverse loss experience and poor venues
Increase (Purple triangle pointing up) +50% or more
Auto Increase (Purple triangle pointing up) +15% to +20% or more
Property
Non-cat exposed
Increase (Purple triangle pointing up) +5% to +15%
CAT exposed without losses
Increase (Purple triangle pointing up) +10% to +20%
CAT exposed with losses
Increase (Purple triangle pointing up) +30%

Key takeaway

The senior care industry is ground zero for COVID-19 in an already hard market. Underwriter uncertainty requires strong collaboration and communication between insureds and underwriting partners.

Carriers are looking at what preventative action is being taken to help drive down incidents and what procedures are implemented after an incident to ensure it does not happen again.

  • Carriers are hyper focused on the root.
  • A robust risk management program is crucial for insureds seeking more favorable terms and conditions.

The general and professional liability marketplace continues to tighten due to insurers’ drive for profitability and emerging loss trends.

  • Carriers and self-insureds are experiencing significant increases in frequency and severity especially in troubled venues (California, Florida, Kentucky, Tennessee, Oklahoma, New Mexico, New York and Illinois).
  • The plaintiffs’ bar remains active and creative as it targets this fast-growing industry, driving up claim outcomes.
  • Excess capacity has decreased significantly, and price increases are often greater than in the primary layers.
  • Clients are taking on higher retentions or reducing the total limits they purchase to mitigate premium increases.
  • Ongoing retrenchment in coverage includes addition of class action exclusions, abuse sub-limits and tightening on punitive damage coverage grants.
  • A back-to-basics approach requires more detailed submissions, face-to-face meetings with underwriters, thorough supplemental information, clinical and risk analytics and longer lead times to obtain quotes.

The auto market continues to worsen for buyers.

  • Fewer insurers are offering monoline auto options as this line of business continues to face profitability issues.
  • Brokers are having to become more creative in finding package solutions, e.g., packaging auto with workers compensation or other lines of coverage.
  • Increasing claim severity resulting from loading and unloading residents, and distracted drivers is a major concern for underwriters.

Several factors are creating a hardening property market.

  • Property market conditions continue to see an acceleration in rate increases as two years of combined ratios exceeding 100 have forced underwriters to push for profitability.
  • Capacity is shrinking, especially in catastrophe-prone areas.
  • Attritional losses are driving higher retentions, as carriers may push higher retentions as a strategy to keep rate increases at bay.

Disclaimer

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.

Contact Us

Related Capabilities