Ecclesiastical withdraws from non-charity care home market

Ecclesiastical is pulling out of the care home insurance market next year.

After 1 March it will not write any new business or invite renewals from care homes apart from those operated by charities.

It stressed that cover would continue until then.

The specialist insurer, which covers around 10-15% of all care homes in the UK, said it has been reviewing its care portfolio over the past few years and as a result has made adjustments to both its pricing and risk appetite in this sector, ‘to ensure’ longer term viability.

In a statement released today it said: “In addition to the changes to our care risk appetite, shared with our brokers earlier this year, we have continued to assess the performance of our care book throughout this year to identify those segments of the care market that are most closely aligned to our vision and values and where there’s most potential for sustainable growth.

“As a result we have made the decision to reposition our care account and realign it to a more clearly defined customer base.”

The insurer says it will be sharing its plans with its brokers over the coming weeks.

Broker Care Home Insurance Service managing director David Waters described the news as a “body blow” to the care industry.

“Ecclesiastical’s withdrawal from the care market will come as another ‘body blow’ to the care industry and is likely to have lasting ramifications, both for the insurance industry and for care home operators,” he said.

Waters also predicted the market would harden as other insurers reconsider their own position and look to increase their premiums.

“We are hearing that abuse cover is likely to be restricted by many insurers from 1 January 2014,” he added.

“The failings of certain care home operators have been well documented in the media and the increase both in the frequency of litigious claims and the rise in the costs of litigation have coincided with a significant number of care homes coming under financial pressure.

“While it is saddening to hear of Ecclesiastical’s withdrawal, this latest development could just be the shot in the arm that prompts care home operators to overhaul their risk management and safety awareness.”