Aon: Long-Term Care Liability and Loss Reach Eight-Year High, Further Increase Expected

August 1, 2012 | Risk Management News


Long term care liability loss rates and claim severity have reached an eight-year high and are expected to grow steadily in 2013, according to the results of the 2012 Long Term Care General Liability and Professional Liability Actuarial Analysis from Aon Global Risk Consulting. Based on 19,500 individual claims from long-term care facilities, the report found that since 2005, the annual loss rate (liability costs relative to occupied long-term care beds) has grown from $1,040 to a projected $1,480 in 2012 and is expected to increase again to $1,540 in 2013. Additionally, claim severity has grown from a low of $109,000 per claim in 2005 to a projected $168,000 per claim in 2012 and $175,000 per claim in 2013. The data indicates that claim severity and loss rates have been growing consistently since 2009 at a rate of 4% annually, although claim frequency has been stable since 2008.

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