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Claims, Staffing Woes, Natural Disasters Drive Insurance Premium Increases

Property and professional liability insurance premiums have steadily risen since the start of the Covid-19 pandemic, and a new survey shows that trend is seemingly continuing in 2022.

About half of all respondents to the latest Executive Insights Survey from National Investment Center for Seniors Housing & Care (NIC) reported that property and liability insurance premiums have increased “slightly” or “significantly” compared to before the pandemic.

The survey, the 43rd in the ongoing NIC series, includes responses from 50 owners and executives of senior housing and skilled nursing operators. Answers were collected between June 27 and July 24.

Among independent living operators, 74% reported that their property insurance premiums had increased compared with the pre-pandemic period. Just under a quarter of respondents said the increase was significant.

In the assisted living asset class, 79% of respondents reported a property insurance increase, with 32% reporting a significant jump compared with before the pandemic. Among memory care operators, 78% reported an increase with 25% reporting the increase was significant in that time.

Professional liability insurance premiums have similarly increased during the pandemic, according to the survey. Among independent living operators, 63% said liability insurance premiums have risen since before 2020, with 14% reporting significant increases.

A little fewer than three-quarters of assisted living operators that responded to the survey reported increases in liability insurance premiums compared to the pre-pandemic period, with 26% reporting increases as significant. Memory care operators reported similar trends, with 72% reporting liability premium increases; 19% of those noted as significant.

As for why insurance premiums rose over the last two and a half years, the respondents cited a variety of issues, including a lack of competition in local markets, concerns over the risks Covid-19 and litigation, increased frequency of natural disasters and a nationwide increase in the frequency of claims.

Insurance costs were on the rise even in the two years before the pandemic, driven mainly by “deteriorating litigation trends,” according to John Atkinson, managing director of senior living for business insurance agency Marsh & McLennan (NYSE: MMC). As it was before the pandemic, resident-related health events such as falls still make up the “vast majority” of liability insurance claims, with resident falls accounting for as much as half of that.

But all of that was exacerbated with the arrival of the Covid-19 pandemic, and by other headwinds such as widespread staffing shortages in senior living and disastrous weather events.

“[In] assisted living staffing issues are a major concern,” Atkinson told Senior Housing News. “Carriers are looking with a higher degree of scrutiny as to how these organizations are responding to the staffing crisis … both at the leadership level and at the caregiving and operational level.”

And as for natural disasters, the senior living industry is at risk due to high concentrations of senior living communities in markets with a higher likelihood for severe weather, like the Southeast and West Coast, according to Atkinson, .

For example, California and Florida have high concentrations of senior living communities, but those states are experiencing an increasing number of floods, wildfires and hurricanes, respectively, he said.

“We’ve seen a number of significant losses in the senior care sector — [such as] convective storms, which are these polar vortexes and hail storms, that are hitting areas of the country more frequently than they ever did before,” he added.

The post Claims, Staffing Woes, Natural Disasters Drive Insurance Premium Increases appeared first on Senior Housing News.

Source: For the full article please visit Senior Housing News

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