Market Fragmentation and Pricing Pressures
According to Amwins, the market remains fragmented as experienced carriers either pull back or hold firm on rates, while newer entrants compete for market share by undercutting prices. This dynamic, combined with many facilities receiving flat renewals, is pressuring carriers to lower prices to retain accounts. New insurers are introducing predictive analytics and alternative rating methodologies, but the long-term effectiveness of these approaches remains untested in this long-tail business.
Escalating Claims and Underwriting Shifts
Amwins notes that insurers are recalibrating their underwriting strategies to address mounting losses. Measures include reducing policy limits, increasing retentions, narrowing coverage terms, and applying stricter underwriting criteria. Claim severity has notably increased: slip-and-fall cases that once settled for around $150,000 now often reach $350,000. High-risk jurisdictions such as Cook County, Sacramento, and parts of Kentucky are seeing more large verdicts, further complicating risk assessments.
After a brief decline during 2020 and 2021, claim frequency has surpassed pre-pandemic levels. However, loss runs from those years can appear artificially low because many courts were closed, leading to potentially misleading data and underestimated risk exposure.
Heightened Challenges for Memory Care and Dementia Facilities
Amwins highlights that memory care and dementia-focused operations face particularly acute challenges. These facilities often have fewer regulatory requirements than skilled nursing homes but serve highly vulnerable populations. Common risks — such as resident elopement, aggression, and behavioral incidents — are amplified by staffing shortages and gaps in oversight.
Underwriters are placing greater emphasis on detailed operational information, including locked door policies, monitoring technology, and staff-to-resident ratios. Coverage remains available but typically comes with higher deductibles, tighter terms, and broader exclusions, especially in states like California and Florida. Common provisions include sub-limits on abuse coverage and exclusions for class action suits or punitive damages.
Importance of Comprehensive and Transparent Submissions
Amwins emphasizes that securing favorable coverage increasingly depends on complete and transparent insurance submissions. Insurers expect detailed operational and financial data, including census figures, inspection reports, and information on safety technologies like fall detection systems and electronic medical records (EMRs). Full historical loss data is essential — even when a facility has changed ownership — since incomplete records can prompt unfavorable assumptions.
Ownership clarity is another critical element. Clearly identifying decision-makers and demonstrating a focus on resident care, rather than asset management, strengthens a facility’s underwriting position. High-quality, real-time documentation systems, such as Minimum Data Set (MDS) platforms and EMRs, can further validate a facility’s risk management practices.
Outlook
Amwins reports that the senior care liability market continues to pose challenges with rising claims, increased scrutiny, and evolving market participation. While new carriers and analytical tools are entering the field, sustained success will depend on proven data integrity and risk management practices. Comprehensive submissions, transparent ownership structures, and robust operational documentation remain key to securing and maintaining adequate liability coverage.
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