Dear Stakeholder

My name is Peter Feeney, the CEO of HealthCap. HealthCap protects the people who provide the care.

Please allow me to be plain and simple. We don’t sell insurance. We are a senior living industry solution to an insurance problem - fifteen years of understanding and appreciating long term and post-acute care from the inside.

We are at an interesting time protecting and insuring the long term and post-acute care industry. Virtually every aspect of our mission is in flux: its regulation, the investment environment, our competitors, our agents, the courts and our own ability to assess these risks. Despite all that turmoil, or more likely, because of it, HealthCap and its member owners are winning.

The industry is undergoing massive changes: cheap money makes industry consolidation possible. High property valuations and tougher regulatory conditions make selling look attractive to owners.

Fortunately, our members have been buying more than they have been selling. That having been said, the pool of insurable skilled facilities is declining.

The mix of facilities is changing. Skilled facilities, facing declining occupancy, are providing more post-acute rehab and supplementing their revenue with auxiliary services like pharmacy and physical therapy and more skilled facilities are employing physicians.

More assisted living facilities continue to be built, but occupancy is trending down even as acuity is creeping up subjecting those facilities to more claims and larger verdicts.

The regulatory environment is demanding and getting tougher and with so much data publicly available plaintiff attorneys have an easier time.

One of the biggest factors facing the industry is low unemployment rates across the country. Staffing problems makes owners susceptible to fines, lower Star Ratings and dissatisfied residents and families.

The investment environment is challenging as it has been for a decade.

HealthCap has always maintained a diversified, high credit quality portfolio and a defensive investment posture.

The real clear and present danger is that the stock market will suffer a significant correction. Why? Because rising markets always end, usually between five and eight years after they start. This bull market started in 2009. Secondly, valuations of the US stock market are at or beyond historic safe zones.

Third, people are complacent. Market volatility is at all-time lows and has been for some time.

The biggest impacts on the claims front are that even the safest havens are regressing to the mean.

Trends from the big cities have arrived in the middle of the country.

The divide between urban and rural America is melting. TV advertising by 1-800-Call-Lawyers contributes and rural poverty now has a voice and that voice is occasionally expressed in court in jurisdictions that used to be reluctant to issue large verdicts.

On top of that pricing in those previously safe havens has gotten so thin that it cannot support even modest upticks in claim frequency or severity.

Our team and litigation managers are on top of our case files. Our cases are reserved early and accurately. HealthCap files are actively managed. We cannot say that about all of our competitors.

Our underwriting team is outstanding and open for business.

Underwriting does three basic things: they select risk, they price risk and they communicate. All three things are extremely difficult and hugely important. We are excellent at all three with a passion for improvement.

Senior living liability has a very low frequency of claims, but when we have claims, those claims have high severity so trend reading is difficult at best and prone to error. We try to learn from our errors and we also have new tools. Our decision making is supported by eight different actuarial models and four automated pricing tools.

For a small underwriting operation, we are fairly sophisticated and capable. We survive, but in still dangerous waters.

We have two principle tasks for the coming year and they are to reduce frequency and severity.

Writing new business is important, but risky. When we have five years of our own loss runs and five years of risk management visits, we cannot predict the future, but we have a better chance.

Marketing is tasked with developing more and better opportunities. The principal way we do that is by reminding our agents to keep good business with us and give us a chance when accounts need the HealthCap touch.

We have more opportunities when carriers leave the space as GuideOne, Hiscox, Markel and OneBeacon did in 2017 to name just a few.

Risk management is upgrading the HealthCap RM website and marketing is developing a communication strategy to our current members and agents to generate greater appreciation about the HealthCap value proposition.

We believe that our risk management efforts reduce claim frequency and severity. That is why we resist the pressure to cut risk management and continue to innovate to deliver exceptional value to our members.

The proof is that our members have far fewer claims than the rest of the industry and when they do we settle them for half the industry average.

When HealthCap members have lower claim frequency and claim severity they pay less for their insurance.

HealthCap had another outstanding year in 2017 thanks to our focus on protecting the people who provide the care. Our agency and association partners are a big part of that success.

We wrote over $44 million in premium and posted another profit thanks to improving underwriting as well as investment performance that exceeded expectations yet again.

Where do we go from here? We stick to our mission. We serve our members and partners. We continue to innovate and we continue to tell our story.

Thank you for your support.

Ronald Wilson, Chairman

Ronald Wilson, Chairman RFMS, Inc.

Galesburg, Illinois
Timothy Chesney

Timothy Chesney, Vice-Chairman MSTC Development, Inc.

Warren, Ohio
Scott Ganton, Secretary

Scott Ganton, Secretary Ganton Senior Communities, LLC

Battle Creek, Michigan
Paul Liistro

Paul Liistro Arbors of Hop Brook, Manchester Manor & Vernon Manor

Manchester, Connecticut
Jay Moskowitz

Jay Moskowitz Vivage Quality Health Partners

Lakewood, Colorado
Jeffery Schade

Jeffery Schade The Peplinski Group

Farwell, Michigan
Chris Wright

Chris Wright iCare Management

Manchester, Connecticut

Operating in 43 states

  • Written premium $0
  • Facilities 0
  • Operating income $0
  • Closed claims, all time 0

Strategic Targets



Written Premium


Claim Frequency


2017 Progress



Written Premium


Claim Frequency


  • Closed per Year

  • Total Dollars Paid

  • Cumulative Claims Closed

  • Ultimate Frequency per Year

  • Ultimate Per Claim Severity by Year

Cumulative Risk Management Visits and Continuing Education Units Given to Our Members

HealthCap is endorsed by the American Health Care Association, the National Centers for Assisted Living and dozens of state affiliates. Our members are the direct beneficiaries of the strength of those relationships. AHCA is the nation’s largest association of long-term and post-acute care providers. Their commitment to quality perfectly complements our mission.

AHCA NCAL - National Center for Assisted Living

HealthCap is endorsed by the American Health Care Association, the National Centers for Assisted Living and dozens of state affiliates. Our members are the direct beneficiaries of the strength of those relationships. AHCA is the nation’s largest association of long-term and post-acute care providers. Their commitment to quality perfectly complements our mission.

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This Years Winners

Over the past decade, we have forged strong ties with our agents, their support staff, our risk managers, and our HealthCap members. These ties go beyond the business of insurance. All of us involved in HealthCap have a sincere desire to improve the quality of life and work in our senior care facilities, and in the communities that support them.

We solicit award nominations, based primarily on need, from our risk managers and agency staff. HealthCap Helping Hands does a blind assessment of each nomination and chooses a new gift recipient four times a year. Once the facility is chosen, HealthCap Helping Hands collaborates with the facility administrator to present a gift that they feel the residents will enjoy.

Recent Award Winner

Premier Estates of Muscatine

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