Long-term care (LTC) and senior living providers won’t catch a break — at least on liability insurance rates — in 2018, according to a new report from advisory firm Willis Towers Watson.
The insurance rates for LTC and senior living operators are expected to increase anywhere from 5% to 20% this year, and in “deteriorating venues” — such as the state of Kentucky — carriers are restricting their capacity.
“In underwriting, we see increasing emphasis on an LTC operator’s sophistication, experience and risk management protocols,” the report said. “Best-in-class operators have generated discounts in the face of rising rates when they can demonstrate proactive clinical and risk management engagement.”
Buyers will also have to keep an eye on external factors, such as auto insurance rates, court activity, and increasing cybersecurity risks. Most LTC claims activity can be attributed to loading and unloading residents, leading to an increase in auto rates in the segment.
In addition, there was a significant increase in ransomware claims in health care overall and in the LTC space last year, which creates pressure for insured entities to develop integrated cyber solutions.
Because of adverse underwriting, some carriers with significant market share have left the LTC and senior living space entirely, while those still in the space are altering rates and deductibles to boost profitability, the team from Willis Towers Watson noted.
Written by Maggie Flynn