Preparing for Renewal: Care Homes

Spikes or surges in claims or global catastrophic events such as the coronavirus pandemic can lead to underwriting profits either reducing, drying up or losses being incurred, which is often the start of the hard market cycle in which we are entering now. We take a look at what care homes should consider when it comes to your renewals. 

1. Timing is key – ideally, if your premium spend is less than £10k per annum, you should give yourselves a 45-day head start ahead of the renewal date and if your renewal is above £10k, you should begin to start the conversation with your insurance broker at least 90 days before your renewal date. This is a critical point as insurers are asking far more questions and often requiring more information. If you leave your renewal approach until too late, there may be no alternative options available in the time left.

2. Available capacity – a number of insurers have left the health & social care sector, so may not be offering you a renewal. Some indicators of capacity issues can include, recent changes to customer service, such as brokers and insurers being unresponsive, lack of advice on claims or claims not being covered.

3. Pricing – you should always ask about any anticipated changes to current insurance spend levels. The market is evolving rapidly due to COVID-19 and one area that is seeing significant change is pricing, with double-digit percentage rates increasing across the market, but particularly on liability covers. 

4. Cover – check to see if any changes are being applied by your current insurers, this could include extensions being dropped, more onerous conditions and warranties being applied. Many insurers are now totally excluding COVID-19 and communicable diseases cover under the public liability, so check if your insurer is one of those and what it may mean for your business. 

5. Partnerships – always try to use a specialist broker, although most brokers can arrange cover for all businesses, specialist brokers in social and healthcare will have a wider reach in terms of solutions, stronger leverage and negotiating position with the specialist’s insurer partners they support and work alongside. Specialist brokers will have stable collaborative relationships with partner markets during the softer market cycle and will be better positioned. While you may have seen significant rate reductions in the soft cycle which may be welcomed from a pricing view, in the longer term, it is often those that saw the biggest rate reductions who will see the biggest rate increases when the market turns. 

6. Flexibility – it is worth taking a look at options around, perhaps taking a larger excess or deductible, review limits of cover in place and maybe look at arranging the programme in a different way if possible. All of these may lead to more favourable options, as the more risk you are prepared to, in effect, self-insure, should have a positive impact on premium pricing. 

7. Benchmarking – speak with another broker and look to see what else may be available. Brokers often have exclusive arrangements with insurers for sectors like social and healthcare and while they may advise that cover is not available; the reality is that it could be available, but maybe not from the insurer markets that they may have relationships with. Pricing has increased, and the cover has generally reduced but there is still competition from insurers for what they see as the right client

How Ethos Brokers support care homes

Ethos Brokers have access to Towergate Insurance’s unique care home scheme which continues to offer COVID-19 cover for both employer’s liability and public liability. While many insurers have remained closed to new business for care homes and others have placed an outright exclusion on all COVID-19 coverage, our community remains committed to offering care homes cover which provides suitable protection during these truly testing times.

To find out more about how your local Ethos broker can help, just get in touch with your local office directly.