Placing You First Insurance Podcast by CRC Group
The Placing You First Podcast spans a diverse spectrum of insurance industry issues to keep you and your clients informed.
Placing You First Insurance Podcast by CRC Group
Caring for Caregivers: Risk, Reality + Opportunity in Senior Living
The senior living world is growing fast, but the risk profile is changing even faster. We dig into what happens when higher acuity residents stay longer in assisted living, how staffing shortages and inflation strain operations, and why verdicts are getting bigger and tougher to defend. Alongside partners from Future Care RRG, we unpack the friction between occupancy goals and clinical capability, and we explain how those pressures ripple through underwriting, pricing, and coverage structures.
You’ll hear straight talk on the claims that keep operators up at night and why documentation discipline can be the difference between a defensible file and a six-figure problem. We explain the current capacity landscape, tackle ownership dynamics, including the extra scrutiny on private equity platforms, acquisitions of distressed facilities, and the need to present clear improvement plans to underwriters.
If you place, operate, or insure senior living and long-term care, this conversation offers a candid map through a market defined by growth, complexity, and rising stakes. Make sure you reach out to your CRC specialty producer for assistance with your senior living account placements.
Visit REDYIndex.com for critical pricing analysis and a snapshot of the marketplace.
Do you want to take your career to the next level? Join #TeamCRC to get access to best-in-class tools, data, exclusive programs, and more! Send your resume to resumes@crcgroup.com today!
Welcome back to Placing You First, where we talk about what's happening in the insurance marketplace and how it impacts real people and real businesses.
Scott Gordon:Yeah, and today we're focusing on senior living and long-term care. It's an industry that's growing fast, but it's facing real operational, regulatory, and insurance challenges.
Amanda Knight:We're joined today by Donna Hurley from Future Care RRG and CRC specialty brokers, Rusty Hughes, Lee McClure, and Truett Taylor.
Speaker 1:This is the Placing You First Podcast from CRC Group.
Amanda Knight:This podcast features news and insights from a vast knowledge base of more than 5,500 associates who write more than 30 billion in premium annually.
Speaker 1:Plus, we give you the latest information on what's happening at CRC.
Scott Gordon:This is the Placing You First Podcast.
Lee McClure:And now the hosts of the podcast, Amanda Knight and Scott Gordon.
Amanda Knight:Thanks for being here, everyone.
Lee McClure:Thank you. Thanks for having us.
Amanda Knight:Well, to kick us off, I think I'll just throw us into the deep end of the pool. Everybody knows that the senior population is growing. But what is the real-world impact that you all are seeing? You work in this business day in and day out. So what kind of impact are you seeing inside senior living and long-term care facilities?
Donna Hurley:Thanks, Amanda. I do believe, I think we all know our population is aging very quickly, and we're developing chronic health care needs at a much earlier stage in our life, and we're living longer, which makes us a very emerging industry. I think the numbers we're showing, the senior living market is estimated currently at about $118 billion by 2025 and is expected to rise to about $213 billion by 2035. So definitely emerging market. That being said, we're seeing some huge swings between higher acuity of resident care needs and the assisted living space, which are definitely calling out a need for higher training levels and our staffing, higher pricing metrics, and really kind of struggling with a workforce and healthcare that's already taking a look at some severe shortages. And that's really putting a lot of pressure on facility staff, right, to be able to assess resident care needs to ensure care nerds are being met. Because in the long run, the success comes in the fact of occupancy, right? As long as our facilities are full, we're able to be in the business of providing care. But that does um open the door to increased exposure, which I'm sure true, you could definitely hit on that.
Truitt Taylor:Yeah, absolutely. We're seeing it every day. Um that uh, you know, the assisted living claims that are coming through uh seem to be tied to more high higher acuity residents that may or may not should or could potentially be in a nursing home setting. Obviously, uh, you know, the assisted livings have uh pressure to retain those residents, uh to keep their beds full. The families themselves, a lot of times, do not want their family members moved to a skilled nursing type facility. And so there's a lot of pressure to uh keep what would be hierarchy residents in the assisted living setting, which a lot of times, as you mentioned, Donna, the the caregivers may or may not be skilled, trained, and ready to take care of that, provide that level of care. So it's an ongoing issue that we're seeing on a daily basis.
Amanda Knight:Are we seeing other issues, guys?
Donna Hurley:I think honestly, um one area that um you know is is definitely an emerging um conversation for most families is how to pay for long-term care, right? We've got the fact that our dollar isn't going as far as it used to. We're definitely impacted by inflation. Um I think we take a look at you know different interpretations of inflation, but wages is truly, you know, the bulk core of the care that's being provided. So funding resources for families, um, private pay care is becoming more and more difficult to achieve. Um, and that being said, you know, taking a look at different funding experts in the public space, um different Medicaid share programs, I think we're seeing a lot of emerging um Medicare Advantage plans that are opening access to individuals for care. So it's it's a really good thing from a market trend because one major concern for operators was how to sustain in a private pay market for assisted living. Um so it's nice to see that we're we're taking a look that the you know the government that maybe is evaluating those needs and ensuring that care needs can be met going forward.
Rusty Hughes:You know, one thing I would say that ties all this together from an insurance perspective is if you ask any underwriter, if you'd asked any underwriter 10 years ago, they were still able to make a clear distinction between a skilled resident, a memory care resident, a true assisted living resident, and an independent living resident. There were clear uh underwriting guidelines for all those different classes, but now the guidelines, the guidelines have gotten clouded because of what true has touched on in terms of of assisted living trying to keep residents longer than maybe they should. And so what that's done from an insurance and market perspective is it has cost for all those sectors to go up where skill used to be the highest. Now there's no real clear distinction between, say, a skilled nursing bed, a memory care bed, and an assisted living bed. They're all they're all being broadbrushed together most of the time. So that's where a lot of this has impacted the insurance side of things.
Scott Gordon:Well, yeah, we touched on a lot of this, but in terms of like trends, what are some of the biggest macro trends you guys are seeing that are that's shaping this space right now, uh, especially from like a risk and insurance standpoint?
Lee McClure:Uh I'll start on that. I think you know, trends that have continued from the previous years is Donna kind of touched on it earlier, but you've got labor shortages remain very persistent. Uh, definitely in the skilled nursing uh you know levels of care. You know, they're competing with hospitals for wages and benefits. Uh you know, Donna had mentioned, you know, private pay and insurance and reimbursement. Reimbursement rates continue to be, you know, they continue to strain margins on these facilities. Uh you've got other inflation uh issues. Medical costs are driving higher claim severity, uh settlement values. You know, we had touched on nuclear verdicts. Those have not gone away. Those that actually are going to continue to go up until you know certain states and really all states decide to have some form of tort reform. Uh that's really, you know, that's going to continue in trend.
Donna Hurley:I think um I'm gonna piggyback off of you know what we just mentioned in regards to, you know, we used to call nuclear verdicts. Now we're like going into thermonuclear land, is what I've been hearing a lot lately. Um, I think, you know, it it keeps going. But um I think one thing that was a little, it was very disturbing to read in this month is we now have our highest ever verdict in a long-term care case in Florida. It was $200 million. A 97-year-old resident um, you know, was able to access a stairwell while she was in her wheelchair. Um, unfortunately, had a traumatic fall, resulting in severe injury. But, you know, that is really what is driving this industry. Um, to Lee's point, you know, I think we all can agree in the long-term care space, things happen. They do. We're providing care for grown adults in a very pro-resident right era. Um, you know, we take a look back, I said the pendulum swings so far in each direction. It really does over the years. But, you know, I can recall being a high school kid doing my volunteer time in a convalescent care home back when we were syringe feeding people and they were being restrained, you know, to their bed and to their wheelchair, you know, to keep them alive and keep them safe. But that was, you know, in some eyes looked at as, you know, a terrible way to exist. So we shifted and many states adopted resident rights um, you know, for good reason. But now we are in an environment where some of the safety measures that used to be utilized are no longer access points. So these claims are happening. They're more severe. I think on national trend right now, a fall with fracture is the largest emerging claim that we're seeing in the long-term care space with an average indemnity payment of $250,000. Um, you know, for a facing fact, if you take a look in some, and that we ever want to compare, but if you take a look in some other civil markets, uh, the long-term care verdicts are becoming larger and larger by the day, um, you know, which is a call to action for these for TERT reform. Um, you know, we've got some states like California, where we have some severe challenges and trends without having lower limits in that capacity. So I think some of these things are definitely going to need some partnership and adopting caps to kind of make um the long-term care industry continue to succeed and continue to meet the needs of the growing population.
Lee McClure:Yeah, I would comment on another trend. This is more for uh the underwriting perspective of these senior care properties, but ownership structure uh can definitely influence underwriting outcomes. Uh, as we mentioned before, you know, private equity backed facilities are going to face heightened scrutiny uh unless they can clearly demonstrate, you know, strong governance, you know, consistent staffing, uh, and a patient-first kind of model/slash mentality.
Rusty Hughes:The MA and the private equity stuff is is real on the on the insurance side of things because the marketplace is generally can be a little skeptical because skeptical because they're really trying to anticipate, you know, how long are we gonna be on this risk? How much are they really gonna invest in the care for these residents? What are they gonna do truly to improve this facility? Are they gonna, you know, what what's the what's the bandwidth that they have to really uh stay on a portfolio of different locations, you know, and so that affects the underwriting side for sure, and that's very real, and that drives pricing.
Truitt Taylor:And and I want to piggyback on that, a lot of the times the the acquisitions that are happening are happening for a reason. There's a lot of times the reason these facilities are for sale is because the prior owner is either underwater financially or struggling to operationally meet the needs of the facilities, so much so that they have decided to just let it go or get out of the business. And so those a lot of times what we see are those types of facilities that are the ones being acquired, which then complicates the underwriting process because they're going to want to know plans for improvement and who the new owners are and what experience they have and everything that Rusty just mentioned. So it's a it's kind of a double-edged sword of new owners are coming in, but a lot of times they're also picking up underperforming facilities. And so it it makes it you know twice as difficult to place their coverage.
Amanda Knight:Well, and I know Rusty kind of mentioned this a few minutes ago about how it's easy to paint everybody with the same broad brush. And it sounds like some of these macroeconomic trends also add some other layers of of complexity. So, what is the marketplace for insurance like right now? I mean, is it capacity available? Does it is it uneven? Um, where's the capacity coming from? Uh talk to us a little bit about what you all are seeing as brokers in the marketplace.
Lee McClure:I would say, you know, most senior loathing placements continue to reside in the ENS market. Uh obviously, you know, that's gonna allow the most potential flexibility and tailored solutions for those buyers. Uh, but it's very inconsistent. Um, you know, we're seeing, you know, generally, you know, primary limits from one to four million with excess capacity being anywhere from five to fifteen, but most excess carriers are reducing capacity to five. Uh also we feel like you know, more than ever, underwriters are forcing more risk management onto the buyers. So if an insured can, you know, you know, show that they're actively executing risk management plans, not just saying, hey, thank you, but actually implementing what's been suggested, uh, that's actually going a long way in renewal outcomes.
Rusty Hughes:From from my perspective, there are really two distinct markets in senior living. We have the primary world and we have the excess world, obviously. And we touched on that a little bit, but the reason why you kind of got to think about them in two different ways is because um it used to be that you could go get a primary deal done in this market and then go to anybody and get a five or ten million dollar umbrella uh to sit over it. Well, now those those times have changed because Donna spoke to it earlier, these these nuclear verdicts that are happening all over the country, these carriers want to be able to control, these carriers want to be able to control all aspects of a claim. And so uh there is hesitancy for a lot of these major carriers, a lot of the ones that we do business with, um, to sit in an unsupported excess position. That continues to be a problem.
Truitt Taylor:Yeah, and and and I was gonna add, um obviously, you know, this is a the the claims are a long tail process. You don't just you don't just settle a senior living claim overnight. It takes two, three, four, maybe even as much as five or six years to uh to reach the ultimate settlement. And um a lot of the capacity in the marketplace is newer, like within the last five years. Um and so while there is a lot of capacity currently, um, I would say a good chunk of it is newer capacity that doesn't have uh the full depth and history of of claims reaching settlement to really determine how profitable they may be on their book of business. And uh and that's gonna continue to be a challenge for a lot of the carriers in the space is competing against those who who don't have full loss history data to look back on and determine their pricing models.
Donna Hurley:Would you guys say uh just from perspective that pricing obviously drives a lot in the marketplace? I think we take a look at operators. I mean, I my forte initially was in that realm, is that at times, you know, we're shopping for the cheapest policy out there and we don't necessarily know what we're buying. Um, what are you guys seeing out there with regards to just overall demand on the pricing level?
Lee McClure:Uh you know, I I would say most everyone, the expectations are projected to be flat up to 15%. I think it's all going to be driven, number one, on the level of care, number two, develop losses, and three, the venue. And I think like Rusty and Truett had mentioned, the the new capacity is in let's buy business mode, whereas some of the legacy markets that have been in this space for 25 years are trying to pad for the future. So they're trying to get inflationary, you know, rate increases between five and seven percent to kind of you know make sure they're in this space for the long term.
Scott Gordon:So for retail agents who are listening to the podcast, what are the biggest coverage pitfalls that you guys are seeing when senior living accounts are marketed incorrectly?
Truitt Taylor:Uh so the biggest one that I'm seeing on a fairly regular basis is the extension of abuse coverage and how that works uh throughout the umbrella. Um, you know, as Rusty mentioned earlier, the uh availability for unsupported excess is becoming less and less. And as you need more and more carriers coordinating that particular coverage specifically, um has become a challenge. And so it's uh uh if I see one thing where there's coverage pitfalls, it's typically that the abuse coverage, uh, which is a significant um exposure in the senior living space, is not properly carried forward through the entire umbrella tower.
Lee McClure:I would uh you know that that's a great one, Truett. Uh I would also say in addition to abuse, we're seeing constraints put on the actual abuse limit in the primary. We're seeing carriers sublimit abuse, uh, which makes it again difficult. We're seeing some carriers sublimit uh adverse events. So your cause of loss, your falls, your elopements, your you know, pressure ulcers are being sublimited. Uh you're having class action exclusions, which is can be a big hurdle. And then paying attention to the uh the the trigger. If it's a claims made form, what call what triggers an event, whether it's incident sensitive or written demand.
Scott Gordon:Absolutely. Um well, we talked about all the fractures and falls and everything else that comes in this business. So claims and litigation seem to be a constant concern in this space. Um, what types of losses are driving the most anxiety right now and why?
Rusty Hughes:I can say without reservation, the number one claim still is false, resident false. There's no no question about it. Um and then close behind that is obviously um elopement and bed sores. I mean, those are those are still the top three and have been for a for quite some time, but falls far and away, it's still the leading cause of claims in senior living facilities for sure.
Truitt Taylor:Um what I would add is that I've seen quite a bit here recently is um after COVID, prices went up significantly. And so typically when prices go up, one of the ways to get it back down is to take on a higher deductible or retention. And so um in 2021 and 2022, um a lot of our buyers took much larger deductibles, sometimes um as high as six figures and more, uh, to take their premium cost down, which sounded like a great idea at the time. But as I mentioned earlier, these are kind of long-tail claims. And so those claims that were filed when they had that larger retention in 2021 and 2022 are now coming due and being settled. And uh we're finding that a lot of the um these operators and insureds are having a hard time cash flowing that financial responsibility. And in turn, the insurance companies are having a hard time and and finding themselves in a credit risk where um their their insurers are not able to pay those deductibles or attention.
Donna Hurley:Yeah, I would say I know I kind of caught a little bit on there. I know I touched on um falls with fractures being an emerging trend. I heard elopement, yes, we wish it was running off to Vegas. That would be a great time on doing so. Um, you know, Medairs always do play a role, but I think one of the largest issues currently is documentation. Um, I think that we are in an environment where documentation is subjective. Um, most of the time in any healthcare space, we chart by exception that, you know, when we care plan for something to happen, um it's not gonna get charted, it's being done. Um, the legal interpretation of that is much different. They like to poke holes in that. And I call it sometimes that $500,000 conversation because, in the eyes of the legal world, if it isn't charted, it didn't happen, right? So it's how do we find a way in our facilities to train and I call it motivate, right? You know, educating our staff that charting, while it is laborious and it can be, you know, the equivalent of a whole extra person, that's how we celebrate the work that we've done. So, you know, those are definitely some of the issues in there. Um, I would go on admission and retention. I know we touched on it on a few topics ago, but um, you know, we the long-term care lifespan is a huge ecosystem. There's a lot of different intermediaries. You've got skill nursing elements where skill nursing beds are very hard to find now, um, long-term skill beds. Um so it leaves the assisted living marketplace open where folks are a non-clinical setting, they're admitting residents that they may not be able to meet their needs. And a lot of times we run into that being a whole other layer of issues on claims dynamics. So I I mean, obviously it's an emerging trend. It seems like there's a new thing every day that's popping up um pertaining to venue and different elements, but those are the the top breadrunners at this moment in time.
Amanda Knight:Donna, I know that this group has been working with future care RRG. for quite a while now. Um and so we brought you on today because you clearly are absolutely plugged in, you know, to this space and are a great partner with and for us. So can you tell us a little bit about what you do um at FutureCare RG and what kind of risk management strategies can really make a difference for these um insured?
Donna Hurley:Well thank you for that. It's it's been a great partnership. I I have definitely appreciated it. I think in general um we can all kind of globally view the fact that you know most of the time with our operators they don't want to talk to their insurance company. They generally aren't excited to do so until even then when a claim comes in the door. I know at FutureCare we really have tried to foster an environment where we want to be a partner, right? We call our insured members for a reason is that we are a group of like-minded individuals that sink or swim together. So that kind of ties into my role as being the director of risk management that we have adopted and definitely understand that one size fits all does not fit the long-term care space. That we are very much just like in our underwriting style we're looking to create a you know person-centered approach for our members to help support them. I think we can really truly all agree our member base is very dynamic. We've got you know when I say smaller everything is mighty but we've got some operators that have smaller bed counts. We have some larger operators I can say from my background in a larger space what works in Tallahassee doesn't work in you know down the street in Miami when we're under the same ownership with the same policies. So our goal at FutureCare is to work with our members and find out their specific route needs of where we can assist them, where we can help motivate them, where we can fill some holes that may be needed. And sometimes that even works we've really carved out a great program in this last year where we now have some amazing vendor partners out in this space that have provided additional tech solutions to some of our members where they may have you know some short gaps in staffing to be able to help support their fall mitigation planning to be able to work with national pharmacies to go in and do training directly from pharmacist groups with our facilities on how to reduce medair. So I think it's been a really great experience and I think that kind of all ties in I think in insurance we all look at everything as being a risk. So we are partnering that from our underwriting standpoint all the way through to our claims because while I want everybody to be proactive and take advantage of the services we have sometimes we don't get to talk to our members till they submit a claim right and while we want to work on claims handling we also want to take that opportunity to reduce the likelihood of repeating that incident in the facility. So we work closely with our members on that process as well. And I think another great thing is you know continuing to assess what we're bringing to our members on a continual basis that it's not you know once we've created the program we need to really take a step back and listen to our amazing partners and our members and where would they run as well.
Amanda Knight:Well and I know that we are a little biased around here but I know that this team that our healthcare team in general across the board you know we may not be able to tell you what you want to hear every time but you'll but you'll tell the truth right we can't always tell you the thing that's going to make you the most happy but we'll tell you the thing that's honest and true. So um that goes a long way I think with with clients with with agents and with insureds. So beyond that what can you guys tell our listeners about the things that make uh CRC healthcare the go-to partner for these kinds of risks what do what do we do really well that makes us true specialists in this space um so I think I mean I think to start you hit the nail on the head is that um we are we are specialists and you know and our first and foremost goal is to take care of the client and if that's telling them you know good news or bad news, we're gonna deliver it and we're gonna um we're gonna make sure that they become uh specialists in the arena um and we pass as much knowledge as we can to them.
Truitt Taylor:And I would say the other thing that we do exceptionally well is what we're doing today is working together and sharing information amongst ourselves and with others that makes us as a whole better. I think we do that better than anybody else in the marketplace without hesitation I can say that. And so I think that's you know when you work with one of us you get all of us and that's a that's a pretty big statement.
Lee McClure:So true and I think that's well said I think you know if you look at our office in Birmingham we have tremendous stability. I mean I think if you were to you know add it all up we have over a hundred years of insurance experience and most importantly that's tailored toward the senior care industry. So we feel like you know we're incredibly positioned to have our you know finger on the pulse to understand trends, what's going on and like you said true it, you know, be honest and transparent. Every deal is not a deal we're gonna write but we're gonna kind of give you an assessment of the marketplace of the insured properly and hopefully you know we can you know at least make the client in a good spot. So that's something to be really proud of.
Donna Hurley:And I was from you know a partner perspective I think you guys have done an absolute amazing job on advocating and listening. That's one avenue that I don't think is um you know it's very unique to the CRC team in that capacity and that you are always out looking out for the best interest of your insured and your partnership. So we definitely thank you guys for that.
Amanda Knight:Well you guys have made it through the hard part now we're on to everyone's favorite part of the show uh rapid fire where we ask just a couple of questions quick answers you don't have to think too hard just whatever comes to the mind first question number one what's one hobby or interest that people outside of work might be surprised to learn about you I'm an old school hip hop fan. I would not have pegged you for that rusty old school hip hop would not have gone there.
Donna Hurley:I love it I'm a seenly um unhealthy Boston Red Sox fan so um just it's it it becomes an affliction that um can really impact my life depending upon which waiting it is so people down here feel that way about SEC football so we understand.
Amanda Knight:That's right anybody else Lee Truitt I'll say it I okay I I'm uh I'm addicted to contrast therapy I love a good sauna and a cold plunge really no doubt huh I did not uh you know I see it all over the I've never heard of that until today I see it I I didn't know it had a fancy name if I'm being honest I see people do these things on social media but I didn't know it had a name so I've learned something Lee thank you I'm a um I'm an insurance golfer with I'm an insurance golfer which basically means that I play golf when when the job allows and I'm absolutely terrible but I'm absolutely terrible both right handed and left handed so I like to uh I like to go to the golf shop and ask for a right handed club and then ask them for a left handed club and let them look at me and tease the pros.
Speaker 1:Right?
Scott Gordon:We've witnessed it it is something it is something to see what their bases does like uh something like baseball yeah uh on to question number two which is what life hack is saving you right now in other words this can be anything that makes your life easier from grocery delivery to an app, a tool, a habit, something you've changed.
Amanda Knight:Anything sky's the limit.
Lee McClure:I mean for me it's DoorDash.
Donna Hurley:Yes required bingo I had to take the app off my phone for this it's my 2026 goal because I saw how much I spent last year and so the Life Act is now removing it so I can put some money away.
Amanda Knight:There you go.
Scott Gordon:Yes well it has been a delight thank you all for joining us and for being such good sports here at the end the senior living realm is clearly a sector filled with both purpose and pressure.
Amanda Knight:Growth is guaranteed but stability isn't and navigating that gap we know it takes expertise partnership and thoughtful risk management so make sure you reach out to your CRC specialty producer for assistance with your senior living account placements.
Scott Gordon:We are not reading this off of cards thank you all so much for coming Donna Rusty Lee Truth thank you so much like you guys guys enjoyed it thank you all that was a lot of fun thanks to all of you for listening to Placing You First don't forget to subscribe and share and we'll see you next time
