Pandemic Challenges for the Care Insurance Sector

The white paper, ‘Care and insurance Covid-19 lessons will redefine care sector’s insurance and risk needs as uncertainty continues’, examines the challenges that all parts of the care sector have faced during the COVID pandemic, and  sought the views of leading figures in the sector as they look to the future.

Challenges for care insurers from Covid

Towergate’s Head of Care and Charity, Carolyn Baker-Mellor, was asked for her view for the white paper. She explained how her organisation was approached by large numbers of the brokers, for which Towergate operates schemes on a wholesale basis.

The withdrawal of capacity from the market had left many with clients suddenly struggling for cover at renewal. Faced with having to find alternative cover at short notice, it was a case of negotiating an extension of cover for a period with their existing insurer, while new capacity could be sourced.

The white paper provides an honest view of the industry’s response as the care sector struggled with unprecedented challenges brought about by the pandemic.

Mixed care insurance response to industry needs

Care organisations have been on the front line of Britain’s fight against the pandemic and in supporting society’s most vulnerable. The desire to meet the needs of some of the country’s most at risk members of the population, has seen staff and businesses placed under unprecedented strain, caught in the middle of the Government’s strategy to restrict the spread of the virus and ease the pressure on the NHS.

However, the white paper found that the response from the insurance industry has been mixed.

Covid-19 triggered a withdrawal of capacity, and there is little sign of any return, putting further pressure on brokers when seeking markets with which to place their clients’ risks.

There have been harsh lessons for those in the care sector, as the uncertainty has prompted the need for tough decisions. What has become clear is that, if clients and their brokers had not fully understood the specialist nature of the cover required by care organisations, it was starkly illustrated by the events of the past year.

Growing relationships between customers and care insurers

As organisations looked to their insurers for far more support than simply at the point of a claim, the discussions have highlighted the way in which the client is seeking more from their risk carriers and, with it, their brokers. It is likely that the future relationships between care providers and their insurers will change significantly, as the sector evolves into a new way of operating once the world has learned to manage the threat of Covid-19.

Changing insurance risk profiles for the care industry

The publication added that the effects on the care industry and the insurers which cover the sector, will be long lasting. . The pandemic has created a greater need for appropriate insurance cover, risk management and legal support than ever before, but questions remain for the future. Brokers will need to fully understand their clients’ changing risk profiles, while insurers will need to wrestle with the ability to shape their cover to meet the needs of the care sector.

The sector is navigating these new uncertainties at a time when the demand for their expertise and services has never been greater, and is predicted to only increase.

The white paper concluded that the future is likely to be defined by the way in which the insurer and its broker partners can work with their clients, to adapt the products and services they provide, to meet the changes to the sector’s risk profile and insurance requirements.

Covid-19, and the lessons learned, will undoubtedly change the way in which the sector operates. It will redefine the regulatory approach and see the emergence of new risks. It will require a new relationship between insurer, broker and the client.

A different tactic is now needed – driven by the demands of operators across the care industry – for the relationship with the insurer to go beyond the risks they need to mitigate.

Care insurance from Towergate

Towergate Insurance are partners with Care England, NCF, Homecare Association and a number of regional associations, and are actively engaging with local Government officers to provide updates on market restrictions. We also work closely with the British Insurance Brokers Association and the Association of British Insurers, to ensure that wider messages are being heard across the market.

To find out more, visit our care insurance pages, call 01438 739 280 or email newcare@towergate.co.uk. 

About the author

Carolyn Baker-Mellor is a respected industry leader with over 35 years' experience within the care insurance sector. She works across a wide spectrum of insurance product and policy development, delivery and optimisation for care industry clients, including managing global corporate accounts, working closely with trade associations, and helping clients in protecting their businesses and personal assets. Her areas of expertise within the sector include care homes, nurseries, domiciliary care, hospices and charities.

Carolyn currently works at Towergate as Head of Care Insurance. Towergate is the UK’s leading independent insurance broking platform and forms part of the Ardonagh Group, an international network of over 100 offices and 7,000 people which incorporates leading brands in both Lloyd’s of London and global markets.

She previously worked for 10 years at Aon as a director, client services leader and assistant director for claims.