Aon Study Finds Stability in Nationwide Liability Costs in the Long Term Health C...( Tort reform's lasting impact and oth...),Health

Tort reform's lasting impact and other influences are limiting the growth

of frequency and severity of claims

CHICAGO, May 12 /PRNewswire-FirstCall/ -- Aon Corporation (NYSE: AOC), the leading provider of global risk management and consulting services, today released an analysis of liability in the long term care industry, finding for the first time in nine years of reporting that liability costs are stable on a national average basis.

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The Long Term Care 2008 General Liability and Professional Liability Actuarial Analysis, with the endorsement of the American Health Care Association (AHCA), utilized data representing 15 percent of the total number of long term care beds in the United States

The study found that average general liability and professional liability loss costs nationwide are at approximately $1,460 per bed after peaking at $2,030 per bed in 1998. This trend is driven by a reduction in the average severity of claims from a high of $261,000 in 1998 to $138,000 in 2007. In addition, the number of claims (frequency) has stabilized in recent years -- hovering around 10.6 claims per 1,000 occupied beds after rising from 6.7 claims in 1997.

"The impact of tort reform has been lasting, but it is not the only factor contributing to the stabilization of liability costs in the long term care sector," said Theresa W. Bourdon, managing director and actuary for Aon Global Risk Consulting. "Many other changes, including the withdrawal of some long term care facilities operators from expensive markets, more effective defense strategies, the us
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