Press Release - MARCH 12, 2018

A.M. BestTV: Long-Term Care Insurers Look to Pricing and Regulators, Say A.M. Best Analysts

 Lee McDonald
Group Vice President, Publication and News Services
+1 908 439 2200, ext. 5561


OLDWICK - MARCH 12, 2018
In this A.M. BestTV episode, A.M. Best Senior Industry Research Analyst George Hansen and Financial Analyst Bruno Caron discuss a new report that examines the long-term care insurance sector, which has seen a multitude of carriers leave the market or change their approaches in the hopes of achieving profitability. Click on to view the entire program.

The long-term care industry continues to suffer from hard times as underpricing from yesteryears has led to profitability issues and sizable losses.

“Long-term care is different from life and annuity insurance on many fronts,” said Caron. “The abundance of assumptions that are required to price and reserve long-term care are very high. Additionally, the interdependences between assumptions are also differentiating factors from life and annuity that definitely exasperate the issues.”

Hansen highlighted the industry’s long-term prospects.

“There is definitely a premium deficiency that exists with long-term care,” said Hansen. “However, there have been discussions in the capital markets about various solutions that can be offered to offered to existing long-term care blocks that would reduce some of the interest rate, mortality and morbidity risks.”

Hansen also believes that the product could undergo a revision if the regulators approve a proposal to tweak the premium structure, thereby giving companies more flexibility. However, how consumers will react to such a proposal, said Hansen, is questionable.

To access a copy of this market segment report, titled, “Long-Term Care Rate Increases Drive Premium, Loss Ratio Remains Volatile,” please visit .

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