Care Sector Insurance Crisis

Care Sector Insurance: Why are premiums rising and what can you do to minimise the impact?

As Care homes face a Covid-19 triggered occupancy crisis which could last until 2023, another cloud looms over Social Care providers as their insurance policy renewal dates arise.  

Recent research from The Care Provider Alliance (CPA) reveals that renewal premium quotes have been inflated by as much as 880%. As many providers have yet to reach renewal stage and with a complex variety of insurances available, the exact impact this could have on the sector is yet to be uncovered. 

What are the key issues with Social Care insurance? 

  • Decline in supply – An already small market for insurers is being tightened by a decline in supply. A lack of underwriters willing to provide cover in the present climate also poses a risk of Care Homes not being able to find any cover at all, even with existing suppliers. Currently, there is no indication on what needs to happen to increase the number of insurers willing to provide cover. This places more risk on suppliers who are providing cover and leads to less competition in the market and ultimately, higher premiums. 
  • Refusal to renew – Some insurers are refusing cover to those that have made recent claims, this is higher than usual as some providers have made business interruption claims due to Covid-19. 
  • Exclusions and restrictions – Some insurers are removing Covid-19 cover from their policies and some go as far as to remove cover for any communicable diseases. This is a huge area of concern for the stability of the sector. Other insurers are offering Covid-19 cover but at a very low level, with high excesses and an annual cap on claims. This essentially means that Care homes have no “meaningful cover”.  
  • Access to Data – Insurers are asking for growing levels of data and leaving very little time between offer and acceptance deadlines, making the process more stressful and time consuming for care providers. 

There are now calls for the Government to step in to ensure that both Social Care Providers and Insurers are supported through this period of uncertainty. The NHS was protected early in the crisis by legislation, giving indemnity. Care Sector leaders have called out for an extension of the legislation to cover Social Care, thus far to no avail.  

Don’t wait! What can Care Providers do to minimise the impact of rising insurance costs? 

  • Review your requirements – compile an audit of your current and future organisation set up and needs so you can provide your incumbent and new providers an accurate picture of what to quote against (i.e. your number of homes may have altered, you may now need Cyber cover but not some other cover types, etc.). You do not have to wait for renewal dates – you could identify and deliver savings immediately! 
  • Seek third party support – As Care Sector Procurement specialists, Marr Procurement can support you with added resource and focus to achieve the best deal on your insurance premiums, with access to exclusive leveraged rates and a wide knowledge of the market.  
  • Make cost savings elsewhere – It is likely that you will see some inflation on your renewals and possibly increased risk where your level of cover has decreased, so it is important that you do everything you can to decrease your outgoings in other areas. Marr Procurement can undertake a cost savings opportunity analysis across all or specific areas of your business, such as Medical Consumables (including PPE), Staffing, Energy, IT and Facilities Management. By streamlining processes and costs you can help navigate your way through challenges ahead. 

If you would like to explore how Marr Procurement can help you identify cost savings on your expenditure, please contact admin@marrprocurement.com. 

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