Senior Living Market Easing but Reprieve May be Brief

After a year or two of hardening, the insurance market for senior living facilities took another hit in 2020 due to the COVID-19 pandemic’s new wave of compounding challenges. Brokers working with these healthcare organizations were warned to keep a wary eye on increased liability and tighter underwriting moving into 2021.

Throughout the challenging market in 2020 and 2021, accounts of varying quality were often painted with the same brush in an effort to improve underwriting profitability through widespread price hikes of 20% or more. This was frustrating for higher-quality accounts, and the sector saw a subsequent rise in the secondary market as risk retention groups (RRGs) were priced slightly lower than traditional marketplace offerings. However, the impact of RRGs began to wane at the end of 2021 as new entrants began joining the space, allowing better accounts to be considered on their own merit.

As we move into the second half of 2022, there are signs that the senior living insurance marketplace may be easing as 3 - 4 new insurers have now entered the space, and some legacy carriers have become more aggressive in an effort to rebuild their books after balancing portfolios. This means the pace of rate hikes may decelerate, which is good news for many operators experiencing post-COVID fatigue after significant premium increases. However, price sensitivity is still through the roof, and many insureds are looking for a better deal. The marketplace is seeing some clients choose to leave multi-year insurance relationships in favor of a lower price, but that leap may prove detrimental for insureds in the long run.

Featuring:

• Rusty Hughes is a Senior Broker with CRC Group’s Birmingham, AL office specializing in the healthcare and assisted/ senior living sectors.
• Lee McClure is a Senior Broker with CRC Group’s Birmingham, AL office specializing in healthcare professional liability.
• Conner Madey is a Broker with CRC Group’s Chicago office where he specializes in healthcare.

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