Insurance within the Care Sector in a post-Covid era
Insurance Brokers often talk a lot about the insurance market cycle or more generally about the state of the insurance market with terms such as a ‘hard or soft market’ or indeed somewhere in between being discussed with clients regularly, especially in the run in to that crucial insurance renewal date.
For a whole host of reasons, the market is arguably as challenging as it has been for over 20 years and for many organisations and businesses, the experience of two or in some cases three consecutive annual premium increases is not untypical. More often than not, this might also be coupled with amendments and reduction in the level of cover being offered.
There are certainly some acute areas within the marketplace that are seeing even more dramatic increases and arguably none more so than the Care Sector.
In some cases, insurers have decided to pause offering insurance cover to new businesses with some withdrawing from the care sector insurance market completely as they consider their longer-term strategies for the sector. This has left some in the care sector with limited choice.
Whilst insurers may continue to offer renewal to their existing clients (typically at an upwardly revised cost) it is left for you and / or your broker to prepare your case and argue the merits of your individual risk with your incumbent insurer and without many alternative insurer options, you may be left at the mercy of their decision making.
What has also not helped is that historically, the cost of D&O insurance premiums for the sector has been depressed for too long with many local and national care insurance schemes being written too cheaply without adequate and proper risk selection by the insurance market. Whilst certainly not the only cause, Covid-19 has accelerated the withdrawal of capacity from the sector and is limiting choice.
What are the choices?
Is the current state of the market something which cannot be influenced? Or are their ways you can positively influence the opinion of the underwriter / insurer by portraying the quality of your risk and having greater choice. At Griffiths & Armour, we firmly believe in the latter. We also believe that the crucial preparation period in the run up to renewal is of fundamental importance. Early support from your broker is vital to help get your organisation into the best possible position ahead of presenting your risk to the market.
Here are 5 tried and tested tips we share with our care sector clients to help get the very best available insurance cover from the market:
Be crystal clear on the risk presented and in particular what a changing risk profile looks like with supporting business plans
Provide a clear Risk Management strategy which is focused on continued improvement addressing key areas (including CQC rating where appropriate)
Work with your broker to portray the quality of the risk for presentation to the underwriter(s)
Assemble claims data that tells a positive story, claims triangulation and large loss details are essential
Agree a renewal strategy with your broker that is followed through in a timely manner.
One thing is for sure, the market will not remain in this position forever and at some stage we fully expect the market to provide more choice with insurers returning. This may take some time though with initial reintroductions to the market likely to concentrate on risks that demonstrate quality and crucially, the presentation of it.
Griffiths & Armour have a long and established presence in supporting care and health sector organisations with their insurance programmes. Our dedicated team of specialist brokers are always available to discuss any questions you may have which relate to the management of your insurance and risk requirements in this and other sectors. Please get in touch with myself or your usual Griffiths & Armour contact if you have any questions on your current insurance programme or how the current market position may impact on your next renewal.
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