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Survey Report

Insurance Marketplace Realities 2023 - Senior living and long-term care

December 1, 2022

Emerging from the pandemic, challenges remain in senior living and long-term care with respect to coverage issues and insurance capacity.
Rate predictions: Senior living and long-term care
  Trend Range
General and professional liability with favorable loss experience and venue Increase (Purple triangle pointing up) +5% to +25%, higher with adverse loss experience and/or poor venue
Property with non-challenged occupancies Neutral Increase Flat to +7.5%
Property with challenged occupancies Increase (Purple triangle pointing up) +15%
Workers compensation Neutral decrease -5% to flat
Auto Increase (Purple triangle pointing up) +5% to +10%

Professional liability and general liability

  • CNA’s Aging Services Claims Report published in March 2022, reported that the average cost of senior living claims has increased more than 15% since 2018, with assisted living claims being almost 9% higher than skilled nursing claims.
  • As a result, we anticipate further rate increases ranging from +5% to +25% depending on acuity mix, venue and prior loss experience. In addition, economic inflation is now being priced into all business.
  • Insurers are highly selective in determining the risk they will write. They are frequently unwilling to deploy significant capacity in such litigious venues as New York, New Jersey, California and Florida.
  • Insurers advise that larger risks will likely require further premium remediation, while most smaller accounts are priced appropriately.
  • Significant capacity was lost in the senior living market in late 2019 and 2020. While lost capacity has not been fully replaced, new entrants have yet to deploy their capacity in a meaningful way.
  • Expect to see rate deceleration as the environment evolves and new entrants begin to try to expand market share. Markets will continue to focus on obtaining rate for increased exposures and to decline or non-renew risks with adverse loss history.
  • Underwriters have incorporated a broader communicable-diseases exclusion rather than simply excluding COVID-19. Stand-alone communicable disease liability policies are now becoming available, but large capacity is still not available.
  • 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 used without acceptable fronting arrangements.
  • Underwriters are seeking more detailed data and information for the renewal process. Information requests may focus on vaccine protocols, staffing adequacy, virus statistics, and potential financial instability for senior living communities as 97% of communities have lost revenue during the COVID-19 pandemic.
  • Clients seeking to differentiate their risks must focus on incident reporting, claim mitigation, policies and procedures. Emphasis on the clinical program management will also have a positive impact, particularly for those with a focus on fall management, elopement, medical management and infection prevention and control.


  • Valuations are being heavily scrutinized, due to significant cost increases evolving from material demand, supply chain issues and labor shortages. Occurrence limits of liability endorsements and margin clauses are frequently considered by insurers to limit their liability in the event of perceived under-valuation of property values.
  • The recent shift in availability of capacity is causing a deceleration of rate for non-challenged occupancies. However, challenged occupancies (including senior living) and certain geographic locations continue to see higher rate increases.
  • As new capacity enters the market, incumbents are forced to increase line size or decrease rate to maintain market share. Challenges remain for accounts with losses as well as engineered risks.
  • Insurers continue to restrict many coverages previously offered, such as communicable disease and cyber. Additional coverage tightening is occurring on CBI (contingent business interruption), service interruptions, deductibles for convective storms and increased waiting periods.
  • There is continued pressure to move from manuscript to insurer forms.
  • 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.

Workers compensation

  • Eight years of consecutive profitable results have allowed rates to level off more quickly in workers compensation than in other lines of insurance.
  • Underwriting concerns continue regarding opioids, the aging workforce, regulatory reform, and medical bill and payroll inflation.
  • 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. For accident years 2020 and 2021, COVID-19 has generated roughly 60,000 claims and close to $500 million in losses.


  • Combined ratios are still over 100 and the volume of vehicles on the road is increasing as the pandemic subsides.
  • National Safety Council (NSC) estimates Q1 2022 motor vehicle fatalities are up 4.5% from 2021 (the worst year on record for motor vehicle fatalities) and 16.7% from 2019. The median cost of a single fatality in 2019 was $5.1 million, up 14% from 2018 and up 182% over the past 10 years.
  • Distracted driving remains a significant issue, and communities with high numbers of drivers using their own vehicles will find more underwriting scrutiny and higher pricing.
  • According to Fitch, the pandemic’s socioeconomic changes led to an “unprecedented decline” in commercial auto claim frequency; however, regular increases in claim severity have been a key factor behind the chronic underperformance of commercial auto over the past decade.
  • Higher occupancy vehicles are also viewed less favorably and may add rate to a community's auto premium if their fleet involves multiple vans and/or buses.


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 entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).


Healthcare Industry Vertical Division Leader, North America

Senior Vice President, Client Executive

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