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Survey Report

Insurance Marketplace Realities 2021 Spring Update – Senior living and long-term care

April 21, 2021

Premium rates, program structures and terms and conditions continue to be impacted despite the reduction in senior care liability capacity subsiding.
Rate predictions
  Trend Range
General and professional liability
Favorable loss experience and venues: Increase (Purple triangle pointing up) +10% to +30%
Adverse loss experience and poor venues: Increase (Purple triangle pointing up) Potentially higher increases
Excess: Increase (Purple triangle pointing up) +30% or higher
Non-cat exposed: Increase (Purple triangle pointing up) +10% to +20%
Cat-exposed without losses: Increase (Purple triangle pointing up) +20% to +30%
Cat-exposed with losses: Increase (Purple triangle pointing up) +40% or higher

Key takeaway

Although the reduction in available senior care liability capacity in 2020 has subsided, premium rates, program structures and terms and conditions continue to be impacted by the lack of insurers participating in this sector, especially in the excess layers.

Professional liability and general liability

  • The overall reduction in professional and general liability capacity in each key market (Bermuda, London and the U.S.) is a result of market withdrawals and reductions in deployed capacity, particularly for new business and large and complex risks. The typical deployed excess line size has fallen into the $5 million to $10 million range, depending on attachment point and venues.
  • While a limited number of new market entrants will consider senior care risks, the additional capacity has not filled the gap created by market exits in 2020. Furthermore, the new entrants are underwriting conservatively, targeting risks with good loss experience in less troubled venues.
  • To reduce their total cost of risk, many insureds are assuming larger deductibles or self-insured retentions. Buyers need to be proactive in securing lender waivers when retentions exceed those allowed in standard loan covenants or when captives are utilized without acceptable fronting arrangements.
  • We are seeing a significant uptick in the use of captive programs for primary layers on these risks.
  • While rates are still increasing, the level of increase is decelerating.
  • The coverage retrenchment trend continues — class action exclusions, punitive damages exclusions and reduction in sublimits are required by most carriers. Additionally, nearly all carriers are attaching COVID-19-related exclusions — typically referring to communicable diseases or pandemics.
  • Insurers are continuing to monitor the rollout of vaccines, now well underway, to residents and associates. Buyers should be prepared to clearly articulate the processes and progress of vaccine distribution.
  • Insurers are requesting updated COVID-19 data, including numbers of positive cases for residents, numbers of positive cases for associates, overall positivity rates, etc.
  • Insurers are closely monitoring their COVID-19 incidents and claim notices. Most carriers have received thousands of notices but only a small number of asserted claims, leaving much uncertainty about COVID-19-related claim development.
  • Renewal timelines continue to be longer than usual due to substantially increased submission flow, less underwriting authority at the desk level and the ongoing complexities of the pandemic.
  • Clients seeking to differentiate their risks must focus on incident reporting, claim mitigation, policies and procedures.
  • COVID-19 claims advocacy and strategies should look closely at batching language.


  • Insurers remain focused on creating stability and profitability during these uncertain times.
  • Challenged occupancies facing sustained upward rate pressure include senior living. Geographic location and claim experience will continue to be key determinants in pricing.
  • Due to the array of occupancy classifications that can apply to this sector, it is imperative to use accurate occupancy classifications for modeling to ensure the most competitive pricing.
  • Insurers continue to restrict many coverages previously offered, focusing on communicable disease exclusions.
  • Coverage is tightening on contingent business interruption and service interruption. Buyers should be prepared for underwriter valuation concerns, reductions in sublimits and increased waiting periods.
  • New opportunities for insurers are limited where engineering visits are required, giving an advantage to incumbents familiar with the sites.
  • Buyers should be ready to quantify reduced rating exposures (i.e., reduction in business interruption values due to COVID-19).

Workers compensation

  • Carriers are tightening their appetite for long-term care risks, and fewer carriers are interested in writing this business; however, there is still adequate capacity in the marketplace
  • Carriers (including incumbents) are taking an in-depth look at insureds’ COVID-19 and infection control protocols and asking more questions about policies and procedures.
  • Carriers are removing deductible or aggregate stops on disease.
  • Credit officers are more focused on liquidity and understanding the financial viability of insureds.


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.

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.

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