What will Manulife Financial Corp. do with the U.S. long-term care insurance (LTCI) operations of its John Hancock unit?
Colin Devine, a securities analyst at Citi, New York, talks about the LTCI business in a new commentary.
Executives at Manulife, Toronto (TSX:MFC), recently emphasized during the company’s third-quarter earnings call that they view the LTCI business at John Hancock, Boston, as a business that is “not targeted for growth.”
The company has shifted to a new family of retail LTCI products, and it reported that third-quarter retail LTCI sales were down 73% from the total recorded in the third quarter of 2010.
Manulife has focused on LTCI sales and variable annuities (VAs) in the United States, and many securities analysts now view both of those product lines as relatively high-risk products, in part because of the low rates of returns insurers can earn on their own investments in high-quality bonds in the current low-interest-rate environment.