Fitch Sees Long Term Attractiveness In The LTC Market
The large pool of people expected to have a need for long-term care will make LTC insurance an attractive market, says a new report from Fitch IBCA, New York.
But the rating agency notes there are some players who stand more poised to benefit from selling to this attractive market: larger, well-capitalized insurers; carriers in the group market; and bank distribution channels.
Additionally, the report, entitled “Long-term Care: an Industry in Transition,” notes that since the LTC product is sold, “successful sales are contingent upon a knowledgeable and motivated sales force in conjunction with well recognized, financially sound companies.”
The report details the need and the market for LTC insurance products. That need, it says, is not restricted only to older consumers. About 40% of the 13 million Americans currently receiving LTC benefits are between the ages of 18 and 65, it states.
But older Americans will comprise a large component of this market. The number of those 65 and older is expected to roughly double to 70 million by 2030 from approximately 35 million today, according to the United States Census Bureau.
Fitch says studies find that about 80% of LTC patients just need help with daily living, not medical treatment.
The bank channel, which now accounts for less than 2% of total sales, according to Fitch, is expected to grow rapidly due to existing relationships with older consumers.
Glenn Schuermann, associate director with Fitch in New York, says banks might provide literature and refer customers to an insurer to actually handle the sale. Because of the growing demand, the pool of producers selling LTC products will continue to grow, he adds.