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Changes in Child Care

The child care industry isn’t what it used to be—or what it will be. Coverages have changed and the market has shrunk as a result of the recession. But as the economic recovery gains momentum and employment gradually rebounds, independent agents can successfully grow in this business.

By Monica Clark, CIC, AU | Updated on May 31, 2011

The child care industry isn’t what it used to be—or what it will be. Coverages have changed and the market has shrunk as a result of the recession. But as the economic recovery gains momentum and employment gradually rebounds, independent agents can successfully grow in this business. The key is to identify coverages, terms and marketing strategies which are likely to appeal to a center in today’s environment.

Like most other industries, child care that depends heavily on the two-career family has been adversely affected in recent years by the recession. The high unemployment rate has eliminated the need for families to place young children in child care. Some child care centers have gone out of business while others have seen their enrollment drop. Simultaneously, we have an insurance industry with significant amounts of capital and surplus, equating to lower rates and more coverage. The end result is a classic case of supply and demand. There are more insurance carriers aggressively competing to write the business, while there is less business available to be written.

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