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 (source 1).



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.

 In 2021, the average cost of a claim in the assisted living environment climbed to $267,174, outpacing skilled nursing facility claims at $245,559.3

Now that the pandemic has largely resolved, premium increases are beginning to settle into the range of 10% or less, and carriers are starting to price more competitively to protect renewals. Markets seem to be moving away from pushing rate across the whole portfolio. In addition, other adverse underwriting actions such as reduced limits, increased attachment points, and non-renewals are now typically happening on an account basis versus applying to an entire book. Better venues may start to see some price decreases as increased capacity gives operators more leverage to drive premiums lower. Carriers returning or debuting in the space are taking advantage of what they see as a softer environment and undercutting prominent market participants. This means insurers that persisted through the hard market and were obtaining 20% - 25% premium increases even on solid accounts, may now find that their business is back in play. It’s not uncommon for new market players to price 10% - 15% lower than incumbents because they don’t have any legacy losses to consider. By leaving an incumbent and transitioning to a new carrier, some larger operators may achieve as much as $200K - $500K in cost savings.

Choosing to swap carriers to save premium dollars may seem like a common sense decision, but it can cost insureds further down the road. The current pricing environment is likely short-lived, and it’s unclear if the carriers new to the space are invested for the long term. As the courts return to normal operations, litigation that was delayed during the COVID pandemic will come to fruition, and it’s unclear what those claim settlements or verdicts will look like or how they will influence future pricing. Many plaintiff-friendly venues are lengthening filing timeframes due to COVID delays. Once trial activity picks up, settlements and verdicts will start hitting, meaning current results are likely skewed. Traditionally tough venues such as Florida, New Mexico, and California remain problematic when it comes to claims. Iowa and Kentucky are also tough, along with New York City, Chicago, and Miami. Recently, Montana has become very challenging, as has South Carolina due to big verdicts.

It’s understandable that the promise of savings looms large. But, when insureds move carriers based purely on price, the number of claim issues that occur after the transition due to late reporting, uncovered claims, or carrier disputes over claim coverage often increases. Those issues can prove costly in an uncertain claims environment, especially if the prior carrier is less inclined to assist with claims after the account has moved. This makes it crucial that agents and insureds evaluate how invested a carrier is in the senior living space before making a change. It’s wise to thoroughly investigate the carrier’s claims platform to ensure new players have the kind of seasoned staff and deep expertise needed to back up the policies they’re writing.

In 2021, the typical deployed excess line ranged between $5M and $10M, which still holds true in 2022. Recently, carriers have been dropping capacity to $5M. Occasionally, accounts will see a market willing to put up $10M if they were already on the exposure, but it’s unlikely that carriers will put up $10M of brand new capacity. The average cost of fall-related claims in the skilled nursing setting has risen sharply compared to assisted living fall-related claims, due at least in

part to allegations of improper care related to the labor shortage.3 In total, recent claim costs across all acuity levels have increased by almost 30% since 2018. When it comes to terms and conditions, brokers are seeing carriers offer a minimum $25K deductible, but retentions can climb higher depending on the particular venue. Before COVID and the harder market, many offered “first dollar options,” meaning nothing was required to trigger a loss on behalf of the insured. These options are now starting to creep back into play, but not with the same level of prevalence.

 Insurers reported increases in general/professional liability loss frequency and severity of 10% - 30% in 2020, compared to a rise of 8% - 12% in 2019.2


One of the biggest challenges facing skilled nursing or assisted living owners and operators is retaining staff and hiring new, qualified team members. High rates of staff turnover and a continuing healthcare labor shortage are ongoing issues. A lack of labor means higher patient-to-staff ratios, and overworked staff members are more likely to make mistakes that lead to losses, and in turn - higher insurance costs. In addition, fewer staff members can result in lower occupancy rates for the facility, which ultimately reduces revenue. Many carriers were providing COVID immunities, but those are going to expire and can trigger claim trends. In addition, the severity of the pandemic caused many facilities to hyper-focus on COVID-related issues and pay less attention to other risks such as slip and falls or wrongful death claims. It’s anticipated that those issues will come roaring back into focus as the courts reopen.

As facility operators seek capital needed to keep the doors open, many facility operators continue to see stringent lending requirements. Lenders may require that owners maintain high insurance limits to obtain a loan while keeping a deductible of no more than $50K. Banks may also require large umbrella policies of $3M or more. Faced with a continuing labor shortage, high insurance prices, and tough lending requirements, mergers and acquisitions will continue to take place as larger entities sell off underperforming facilities and smaller organizations seek a buyer with pockets deep enough to fund operating costs.


One of the most helpful things agents can do is set and manage client expectations. Insureds need to understand that prices are still increasing because rates are not yet aligned with the level of risk in the space. Even with new entrants and increased capacity, the market remains uncertain. Six months out, make sure you have a solid grasp of the facility’s expiring limits and retentions so that you know what the client needs.

Agents with the insured’s best interest at heart should also work to promote consistent buying behavior. Carrier loyalty is woefully undervalued in this space. A retailer can take an account to market every year and likely get a better deal in the short-term. But, that kind of buying behavior shows underwriters that the account is price sensitive and can make obtaining loss history and other information more difficult. Clients may not realize that the senior living sector is a very small world. Underwriters and carriers typically know one another, and they take note of accounts that lack a history of strong carrier relationships. Those clients that bounce between markets will likely never fully benefit from the improved market environment from a relationship or pricing standpoint.

When going to market, agents will have the best results when providing the most comprehensive submission possible. Underwriters want to see a detailed application including at least 5 years of loss runs, a supplemental COVID application, and details of any risk management resources the insured has utilized through the incumbent carrier or an external partner. The frequency of state surveys can vary, but it’s a good idea to attach the most recent survey data as well as a breakdown of endorsements with retro dates and limit structures. Providing data around how the insured has improved staffing ratios since the difficult days of COVID, enhanced training, or raised occupancy levels can also help underwriters feel more comfortable with a risk.


As the market evolves, senior living facilities should take the time to fully evaluate the potential benefits and disadvantages of moving their business to a new carrier. It may save premium dollars now, but can have costly consequences when it comes to claims. No one knows how the claims landscape will shift as cases put on hold during the pandemic settle or work their way through the legal system. Moving ahead, facilities should take full advantage of risk management resources available through insurance partners to ensure they’re operating as safely as possible and mitigating the risks that come along with a labor shortage. CRC Group maintains a large volume of business in the market and is known for strong industry partnerships and underwriting relationships. Reach out to your CRC Group producer today to discuss how we can help protect your senior living sector clients.


  • 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.


  1. Senior Living in a Post-Pandemic World, Insurance Journal, November 16, 2020. magazines/mag-features/2020/11/16/590630.htm
  2. Senior Housing Insurance Rates Continue to Spike, But Signs of Slowdown Emerge, Senior Housing News, April 22, 2021. slowdown-emerge/
  3. Aging Services Claims Report: 11th Edition, 2022. ca868d402917/CNA-Aging-Services-Claim-Report-11th-Edition.pdf?MOD=AJPERES