Long-term care providers can expect increases of 5% to 30% to their commercial liability insurance policy rates, according to a new report.
Experts with Willis Towers Watson made that prediction last week, noting that the eldercare space is difficult for payers.
“The senior living and long-term care insurance marketplace remains in stark contrast to the overall health care industry, with less favorable conditions for buyers due, in part, to rising frequency and severity of claims,” the risk management and insurance brokerage firm said.
Carriers have continued to “scrutinize this sector,” the report noted, with several exiting the space in the past 12 months. Several factors are creating uncertainty for insurers, including class-action lawsuits tied to everything from staffing to marketing of nursing homes, natural disasters, and expanded litigation reaching more suburban and rural providers. Mergers and acquisitions also have contributed, though occupancy challenges have slowed down M&A activity.
To combat the pressures, liability insurers have focused more intently on managing falls and prescription drugs, restricting coverage grants, and significantly increasing rates in California, Florida and Illinois.
“Buyers will need to keep a keen eye on verdicts, settlements, class action matters and the evolution of tort conditions in various venues,” the authors noted. “Expect terms and conditions to come under increasing scrutiny from carriers in high-focus areas.”