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2020 Actuarial Liability Benchmark for Senior Care Providers

How will senior care providers protect against the impact of increasing litigation costs and improve liability outcomes in a volatile insurance market?

02/10/2021 · 2 minute read

With the frequency and severity of claims increasing, the liability insurance marketplace for senior care providers is experiencing massive disruption. Pre-pandemic claims costs appeared to have stabilized to some degree, but the bottom line is that litigation costs are increasing — and there’s no relief in sight for the industry.

The 2020 Professional and General Liability Benchmark for Senior Care Providers, a collaboration between Oliver Wyman’s Actuarial Practice and Marsh’s Senior Care Practice, comprises participants from skilled nursing, assisted living, and independent living providers and is an analysis of the exposure associated with approximately 207,000 senior care beds/units.

It is imperative that senior care providers effectively use data to help mitigate this critical risk exposure. The findings in this report provide estimates on the cost of liability — including both professional and general liability — exposures on a per-bed basis and will enable providers to effectively navigate a complex liability landscape.

Scope

  • Estimation of countrywide and state-specific trends separately for claim costs, severity, and frequency.
  • Estimation of countrywide and state-specific claim costs.
  • Examination of the relationship between indemnity costs compared to expense costs.
  • Review of the accident year by report year relationship.
  • Analysis of the cause of loss descriptions.

Key findings

  • Ultimate loss rates are projected to be $1,730 in 2021 (before the consideration of effects due to COVID-19).
  • Analysis is comprised of nearly 11,000 closed claims with approximately $1.84 billion in paid indemnity and expense losses over the past ten years.
  • Analysis contains data from more than 30 participants with approximately 207,000 long term care beds.
  • Analysis includes frequency, severity, and loss rates on a countrywide basis and analyses for nearly 20 individual states.

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