Long-term care insurance (LTCI) carriers face the effects of wretchedly low interest rate earnings on reserves.
LTCI carriers also face the effects of the soft economy, past problems with pricing, and current consumer and regulator resistance to premium increases.
Even some of the bigger carriers look as if they are getting out of the business.
But Scott Hawkins and Terence Martin, analysts at Conning Research & Consulting, Hartford, said during a recent interview that the root of the LTCI community’s problems is a lack of customers, not carriers.
“The issue isn’t one of supply,” Hawkins said. “It’s demand.”
“If there was increased demand, I think you’d see more companies get back in,” Martin said.
Conning recently published an LTCI market review in which its analysts talk about insurers’ mixed sales results and pricing troubles.
Hawkins and Martin acknowledged that LTCI sales have held up reasonably well.
In 2011, “it was a lot of kind of the same as before,” Martin said.