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TRENDS IN SENIOR LIVING LITIGATION

October 26, 2017

© 2017 Willis Towers Watson. All rights reserved.

Insurance Underwriting


Bruce W. Dmytrow, Vice President Aging ServicesCNA Healthcare

Bruce is a Vice President at CNA and has been with the enterprise since 1995. He is responsible for developing the strategic and tactical direction for the growth and profitability of the CNA Aging Services business

2© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.


Insurance UnderwritingTrends Contributing to Insurance Results in Senior Living Industry

Insurance Industry New capacity Risk tolerance Top line growth versus profitability Pricing, terms and conditions Insurance program structures

Senior Living Industry Financial pressure – change in reimbursement models Risk transfer versus risk sharing Increase in resident acuity levels and co-morbidities Increase in claim frequency Mergers/acquisitions and changes in ownership structures Increase in attorney specialization – increase in litigation Large city urban “creep”


Influencing Factors Professional liability loss trends of 7% - 10% Limited return on investment


Insurance UnderwritingUsing Evidence to Achieve Excellence

Knowledge and experience toidentify loss drivers

Extensive databases Data analytics Pricing models


BED TYPEAVERAGE

TOTAL PAID

Assisted Living $221,496

Skilled Nursing $212,766

Unknown $206,470

Independent Living $123,825

Overall AverageTotal Paid

$211,709

Average Total Paid forClosed Claims by Bed Type

Lessons Learned

Underwriting discipline is paramount. Risk selection fosters profitability. Building and maintaining relationships are

integral to managing market cycles. Utilization of client-specific data builds trust

and supports underwriting determinations. Early discussions regarding renewal actions

prepare all parties for mutually beneficial outcomes.

Resource: CNA Aging Services 2016 Claim Report



2,617 aging services professional liability claims that closed between January 1, 2011 and December 31, 2015

Includes 1,387 professional liability claims that closed between January 1, 2014 and December 31, 2015

Excludes indemnity payment by CNA less than $10,000, home healthcare and adult day care claims

Limited to CNA-insureds; monies paid by CNA; and closed date


Using Evidence to Achieve Excellence: Engage, Lead, Succeed – Datasets and Methodology




Most Frequent Allegation in Closed Claims(Percentage of 2,617 Closed Claims)

42.7%

18.6%

14.7%

6.1%

4.2%

13.7%

Resident fall Pressure ulcers Improper careFailure to monitor Resident abuse All other


Insurance UnderwritingHighest Average Total Paid Allegation in Closed Claims


$231,321

$232,398

$245,783

$323,325

$325,561

Failure to inform physician

Pressure ulcers

Delay in seeking medicaltreatment

Failure to follow physicianorder

Elopement



Resident Falls - Frequency by Allegation(Percentage of 1,117 Closed Claims)




Resident Falls – Frequency by Outcome of Injury (Percentage 601 Closed Claims)

Death is the most common outcome for fall-related claims.



Insurance UnderwritingEvaluating a Company’s Risk Profile

Venue Levels of care and services provided Total exposures (number of beds) Loss history Expiring insurance program Ownership structure and support Financial stability Stable and high performing leadership team Vision, mission and culture Retention of employees and staffing related to resident acuity Quality outcomes Litigation management strategies Risk, quality and compliance programs Reasons for marketing insurance program



Insurance UnderwritingDifferentiators

Submission Materials Quality of submission information Website consistent with submission information Quality outcomes Loss history Employee retention and staffing ratios Composition of leadership team Reputation in the community



Insurance UnderwritingDifferentiators

Meeting with Organization’s Leadership Team and Frontline Staff Mission of organization Knowledge of senior living industry and operations Investment in well-being of the residents Understanding the importance of balancing operations with concern

for residents and employees Transparency of successes and challenges Willingness to partner with CNA Risk Control and Claim Expectations of insurance company


trends in senior living litigation · willistowerswatson.com insurance underwriting 2,617 aging...

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