Aspen Insurance (NYSE:AHL)
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Aspen Insurance UK, a subsidiary of Aspen Insurance Holdings Limited
(NYSE:AHL), has issued a detailed report on the state of Nursing and
Residential Care Homes in the UK.
Aspen believes that demand for insurance cover among Nursing and
Residential Care Homes is set for strong and rapid growth as the sector
expands and responds to ongoing reforms and structural changes. Key
developments that are set to drive the increase in demand include the
likely transfer of much of the care services for older people currently
provided by the NHS to Local Authorities and private providers.
Almost one million people over the age of 65 are in care, many as
long-term patients in NHS facilities. With resources stretched, there
has to be change. Last month, the Government published a consultative
White Paper entitled Valuing People Now (the closing date for
responses is 12 March 2008). A key proposal is the transfer of resources
and responsibilities from the NHS to Local Authorities.
These reforms have been proposed against a background of growing
criticism of the quality of care being provided for older people within
both NHS and Local Authority facilities. As highlighted in the new Aspen
Opinion, ‘Nursing Homes and Residential Care –
Flagging the bad risks’, the challenge of
providing appropriate standards of care has been heightened by the
growing difficulty of finding loyal, competent and caring personnel
within one of the UK’s lowest paid sectors.
To tackle mounting costs and deliver better quality care, the Health
Secretary Alan Johnson has also recently announced sweeping reforms of
how Local Authorities will manage their obligations (Putting People
First). This includes giving Local Authorities greater control over
the funding and design of care for older people to enable them to
provide more individually-tailored services. Older people or their
relatives will receive a monthly cheque to purchase the types of care
they require, rather than being subject to a ‘one-cap-fits-all’
Local Authority package.
Within 20 years, the number of older people requiring round-the-clock
care is expected to reach 1.3 million. While the Government’s
new approach may achieve some reduction in residential care placements
in the short-term, the demographics suggest that the overall demand will
continue to increase.
The pressure on care services created by rising demand is likely to be
compounded the restructuring of the sector. The vision of transferring
care responsibilities from the NHS set out in Valuing People Now
is likely to be endorsed by the Health Service Commission Audit, due in
2008. This includes transferring the management of some 200 currently
NHS-run Care Homes to Local Authorities, which are likely to purchase
care services from charities and other private organisations. The
transfer of provision will in turn increase demand for insurance cover.
Tony Spice, Head of Aspen’s International
Casualty Reinsurance explains, “The world’s
ageing population has stretched available resources, and this is leading
to public insistence on legal frameworks to curb abuse and raise care
standards. Suppliers have struggled to deliver the required quality of
care, and the rising need for care homes is going to increase the risks
for care facility managers.”
Tony Spice continues: “As the new Aspen
Opinion describes, the potential risks facing care facility managers
have been highlighted by the recent scandals at NHS hospitals in Sutton
and Cornwall. As a result of the issues raised by these scandals, and
consistent with Valuing People Now, around 200 NHS facilities
might no longer be NHS-run and will become the responsibility of Local
Authorities. Many Local Authorities will in turn contract out the
day-to-day provision of care to private agencies including charities and
commercial enterprises, who will require significant additional
insurance services.”
“Alongside the significant issue of care for
older people, there are growing calls for a complete revamp of the
delivery of care for people with learning disabilities. This includes
proposals to transfer responsibility for people with learning
disabilities who are not ill or under treatment or assessment from the
NHS to Local Authorities. If the relevant funding reforms can be agreed,
Local Authorities are in turn likely to contract out much of this care
provision to charities and other agencies.”
“As charities and other agencies take on more
of the day-to-day responsibility for care provision, they will require
Employers Liability, Public Liability, Medical Malpractice, Products
Liability, Professional Indemnity and Directors & Officers protection at
least,” says Tony Spice. “Our
research shows that the provision of care is a high-risk area where
large insurance claims can emerge from a wide range of daily operations.
However, too many care homes are not fully aware of the risks. We
believe that the insurance companies providing coverage to this growing
sector need to consider the warning signs alerting them to poor or lax
management, which are flagged in our newly published Aspen Opinion.”
Aspen Insurance UK Limited provides insurance cover for the liability
risk of care facilities and related services.
About Aspen Insurance Holdings Limited
Aspen provides reinsurance and insurance coverage to clients in various
domestic and global markets through wholly-owned subsidiaries and
offices in Bermuda, France, the United States, the United Kingdom, and
Switzerland. For the nine months ended September 30, 2007, Aspen
reported gross written premiums of $1.5 billion, net income of $353.8
million and total assets of $7.3 billion. For more information about
Aspen, please visit www.aspen.bm.
Aspen's Ratings
Aspen Insurance UK Limited
Aspen Insurance Limited
A (Strong) Standard & Poor's
A (Strong) Standard & Poor's
A (Excellent) A.M. Best
A (Excellent) A.M. Best
A2 (Good) Moody's
A2 (Good) Moody's
Aspen Specialty Insurance Company
A- (Excellent) A.M. Best
Application of the Safe Harbor of the Private Securities Litigation
Reform Act of 1995:
This press release contains written, and Aspen's officers may make
related oral, "forward-looking statements" within the meaning of the
U.S. federal securities laws regarding its capital management plans, its
outlook and financial results. These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include all statements that do not
relate solely to historical or current facts, and can be identified by
the use of words such as "expect," "intend," "plan," "believe,"
"project," "anticipate," "seek," "will," "estimate," "may," "continue,"
and similar expressions of a future or forward-looking nature.
All forward-looking statements rely on a number of assumptions,
estimates and data concerning future results and events and are subject
to a number of uncertainties and other factors, many of which are
outside Aspen's control that could cause actual results to differ
materially from such statements. For a detailed description of
uncertainties and other factors that could impact the forward-looking
statements in this release, please see the "Risk Factors" section in
Aspen's Annual Report on Form 10-K for the year ended December 31, 2006,
filed with the U.S. Securities and Exchange Commission on February 22,
2007.