NU Online News Service, Nov. 7, 2003, 6:04 p.m. EST – John Hancock Financial Services Inc., Boston, says third-quarter sales of its long term care insurance products increased 63% from the total for the third quarter of 2002.
LTC insurance sales “remain robust,” according to Hancock Chief Financial Officer Thomas Moloney.
During Hancock’s third-quarter earnings conference call, Moloney attributed the strength of the company’s LTC product sales to “the strong demographics for this product, expanding distribution relationships and continued positive reception of the product suite.”
Continued expansion of distribution relationships also helped drive growth, Moloney said.
A joint venture with MetLife Inc., New York, that runs the new Federal Long Term Care Insurance Program also continued to grow, Moloney said. Hancock’s share of the venture proceeds increased to $2.6 million for the latest quarter, from $300,000 for the third quarter of 2002.
But growth in Hancock’s LTC insurance revenue was offset by higher expenses, a decline in the portfolio rate and a continued low rate of policy lapse, the company says.
In response to a question about what has made Hancock’s Custom Care LTC product family successful at a time when other companies have had to raise prices or pull back from the LTC market, Michelle Van Leer, a Hancock senior vice president, said the Custom Care portfolio “was designed to be the best of products we were offering.”
“When we first introduced the product?it was a little bit above middle of the pack in terms of pricing, but with some very unique differentiating features,” Van Leer said.
A number of competitors re-priced to reflect lower interest rates, but Hancock was able to sidestep that because the interest rate is built into its product, Van Leer said.
To keep sales momentum, Hancock soon will phase in a new product designed to appeal to younger LTC consumers, Van Leer said.