As is often said across business, the riches are in the niches. There are an endless number of niches and sub-markets one can focus on within insurance, but lately we have been seeing a lot of opportunity in the assisted living and long-term care market.
According to the U.S. Census Bureau, the 65+ population is projected to nearly double to 95 million by 2060. With increasing demand for specialized care, a strong wave of investment is happening, and with new investment comes new risk to manage. This is a unique sector, however, and a certain level of creativity and technical expertise are necessary to succeed.
Lucrative opportunities to help people are always worth taking a deeper look at as risk professionals, and this post aims to do just that. We’ll explore trends, the positioning of our industry in the bigger picture, and highlight some examples from Tricura Insurance Group, a specialized MGA that is emerging as a market leader in this sub-sector.
The Growing Demand for Assisted Living Services
To frame up the opportunity in the long term care market, there are two main factors worth looking at:
First is the overall growth of the market. Driven by the demographic shifts pointed out earlier, the U.S. long-term care market is projected to reach $1.5 trillion by 2027, growing at a CAGR of 7.5% from 2020–2027 according to Allied Market Research.
Google search for some reports about the market and you will find a flurry of press releases announcing private equity rollups and new construction happening in the space; the investment in this sector almost feels nonstop.
If you don’t feel like Googling because you are too glued to my elegant and definitely not boring writing, here’s another tidbit: According to the National Investment Center for Seniors Housing & Care, new construction of senior housing has rebounded after the pandemic. As of mid-2023, NIC data indicated a steady increase in projects under construction and planned developments.
As risk professionals, we know that as more businesses, buildings, investment and people are involved, the risks and the associated complexity of said risks increase as well.
Complexity brings us to our second factor in understanding this opportunity: administration of care, particularly for the elderly, is more complex than ever. More seniors are living longer and requiring more sophisticated care, oftentimes for multiple conditions at once. Medicare data shows that the percentage of recipients with four or more chronic conditions has been steadily increasing in recent years, and that’s just one of many troubling trends in public health. Residents often need 24/7 monitoring, specialized treatments, and personalized care plans. As if that’s not enough, electronic medical records introduce significant cyber risk.
The number of variables combined with the need for deep industry knowledge on part of the risk manager is what makes this opportunity uniquely challenging; but also uniquely positions smaller, more agile specialists to lead the pack.
Why Specialized MGAs Are Well-Positioned to Benefit
As care delivery becomes more complex and widespread, MGAs that combine industry knowledge with data, analytics, and cutting-edge underwriting processes can price policies accurately and sustainably. Providers who understand the industry’s nuances can create products that remain stable and cost-effective, regardless of market conditions as well. Beyond traditional coverage, insurers can also act as a trusted consultant here, offering unique insights to help operators run safer, more efficient facilities.
Example: Tricura Insurance Group
Tricura Insurance Group, an MGA focused on nursing homes, leverages decades of clinical experience and advanced data modeling to price risk in a way that’s both predictable and sustainable. The Insurance Nerds team recently connected with Tricura, and as we got to talking, it became immediately apparent that we wanted to learn more (and write) about this sector.
Tricura bundles loss control and claims administration with the premium, providing a turnkey solution that goes beyond conventional insurance offerings. This approach not only insures against losses but also helps operators streamline operations and potentially save lives by proactively managing risk; a pretty strong offering for customers in the business of taking care of people.
As fellow insurance nerds reading this, I probably don’t need to tell you that organizations investing in predictive analytics can identify potential areas of risk before they materialize. This preemptive approach is particularly important when care for the vulnerable is the topic at hand. Fewer claims, safer environments, and more stable pricing is always welcome, but it feels a little extra critical for assisted care. Additionally, by providing insights into operational efficiency, insurers can help nursing homes deliver better outcomes and improve resident satisfaction. Win win!
Tricura’s success highlights the need for a unique approach when approaching an industry as unique as long term care; deep expertise and cutting edge technology are both a must.
Opportunities in the Assisted Living Insurance Space
As the sector evolves, organizations with expertise in data analytics, healthcare risk management, and underwriting are poised for success. Professionals who engage with such orgs can accelerate career growth, allowing professionals to influence product development and underwriting strategies. Beyond financial stability, those who enter this space can play a role in improving healthcare delivery and resident well-being, making it both a rewarding and impactful career choice.
Tricura is currently hiring and looking for talent passionate about driving industry change through data, analytics, and fresh thinking. This offers a unique chance for career growth in a dynamic segment of the insurance ecosystem. Look and apply here.
About William Alverson
Will Alverson is the President of the Insurance Nerds Career Center. He has previously led marketing at various financial services organizations within the Insurtech, Venture Capital, and Private Equity sectors.
Will Alverson is the President of the Insurance Nerds Career Center. He has previously led marketing at various financial services organizations within the Insurtech, Venture Capital, and Private Equity sectors.
