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Survey Report

Insurance Marketplace Realities 2021 – Senior living and long term care


November 18, 2020

The emergence of COVID-19 has instigated a massive market disruption in all facets of this sector.

Rate predictions

Rate predictions: Senior living and long term care
  Trend Range
General and professional liability
Favorable loss experience and venues: Increase (Purple triangle pointing up) +15% to +30%
Adverse loss experience and poor venues: Increase (Purple triangle pointing up) +40% or more
Excess: Increase (Purple triangle pointing up) 50%+
Auto liability: Increase (Purple triangle pointing up) +15% to +20%
Non-cat exposed: Increase (Purple triangle pointing up) +10% to +20%
Cat-exposed without losses: Increase (Purple triangle pointing up) +15% to +25%
Cat-exposed with losses: Increase (Purple triangle pointing up) +30% or more
Workers compensation: Increase (Purple triangle pointing up) Flat to +5%

Key takeaway

COVID-19 has substantially disrupted an already hardening senior care marketplace, further deepening rate increases, capacity shortages and coverage retrenchments in almost every product line.

In an already deteriorating general and professional liability and excess marketplace, the emergence of COVID-19 has instigated a massive market disruption in all facets of this market sector: coverage, capacity and rate.

  • Insurers continue to cite the substantial increase in the frequency of high severity claims and their negative impact on loss ratios. These trends are driving insurers to adjust the structure, coverage and pricing of most towers of insurance.
  • The recent withdrawal of multiple insurers from the market, in combination with moratoriums on new business imposed by others, has led to a dramatic reduction in available capacity, particularly excess liability capacity. Consequently, rate increases on excess layers often far exceed those of primary layers.
  • Rates are expected to keep rising into 2021.
  • To mitigate large premium increases, many insureds are assuming higher retentions or (in some cases) reducing excess limits purchased.
  • The trend toward coverage retrenchment continues. Class action exclusions, punitive damage exclusions and sublimits for abuse (and other sublimits) are increasingly being introduced by insurers.
  • Many insurers are mandating the addition of a COVID-19, pandemic or communicable disease exclusion on renewals and new business.
  • In order to obtain appropriate premium rating, buyers must ensure that their submitted exposure base is accurate and has been updated to reflect changes caused by COVID-19.
  • Renewal timelines are substantially longer due to the convergence of three main forces:
    • The disrupted marketplace has led to a large spike in the volume of new business submissions into carriers.
    • Underwriting authority in the field has been reduced, often necessitating more robust and time-consuming referral processes.
    • Closely monitoring the continuously evolving COVID-19 situation, many insurers are only issuing quotes within 30 days of renewal.
  • Despite the exit of several insurers from the senior care segment, there are some positive signs in several new entrants, though these markets are entering cautiously and are being selective.
  • COVID-related claims to date are limited, but we expect they will increase.
  • Property and casualty lines are being negatively disrupted by COVID-19, and the market continues to harden.

Auto liability

  • There are few, if any, monoline auto markets with an appetite for long-term care auto liability. As a result, many clients are exploring package solutions that combine auto liability with workers compensation or property.
  • COVID-19 has parked many insured vehicles for extended periods without premium relief from the insurers.


  • Capacity is significantly shrinking, especially in catastrophe-prone areas.
  • Insurers have less appetite for single carrier towers; consequently, insureds are increasingly exploring shared and layered programs in order to access adequate capacity.
  • Deductibles and retentions are increasing to eliminate attritional loss dollar swapping and, in some cases, to help mitigate large premium increases.
  • Business interruption values need to be reevaluated at the time of renewal to reflect the impact of COVID-19.

Workers compensation

  • Many insurers have imposed a moratorium on new health care business. With less choice in the marketplace, many programs are vulnerable to large rate increases and increased deductible aggregates.
  • As associates in the senior care industry often have acute exposure to COVID-19, insurers are scrutinizing risk management protocols.
    • Given the heightened risk of exposure, many positive COVID-19 cases are attributed to associates’ workplaces regardless of where they may have actually contracted the disease.

The senior care industry has been on the front lines of a global pandemic that is directly affecting the residents and the clients that we serve

  • We continue to partner with Argentum, ASHA and other industry partners to support the industry in facilitating forums to share best practices in real time on infection control and COVID-19 mitigation strategies, as well as partnering with clients to help advance critical state and federal tort immunity initiatives. See Willis Towers Watson Senior Living COVID-19 Resource Center for additional information.
  • Variability of infection control protocols, care settings, levels of acuity and geography have impacted infection rates in various long-term care venues, with assisted living facilities experiencing significantly lower infection rates than skilled nursing facilities.
  • We will be watching all COVID-19-related developments closely.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. 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 advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

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