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June 06, 2013 at 09:32 AM
Yes, some players in the long-term care insurance (LTCI) industry have made decisions to retrench, but those decisions should give them the strength and stability to stay in the market for the long haul.
Debra Newman, a veteran long-term care insurance (LTCI) producer based in Minnesota, gave that assessment of the industry in a recent e-mail.
Newman made similar remarks in a webinar she produced, and recorded, for agents, brokers and anyone else with an interest in the state of the LTCI market.
Some insurers have dropped out of the LTCI market in recent years, and many have increased prices.
In the interview, Newman acknowledged that she has heard some predicting the “death of LTCI.”
“According to LIMRA, sales of long term care insurance are down both in premium and number of lives,” Newman said.
“However, several of the industry leaders have made conscious decisions to slow down sales until they felt comfortable with the pricing of their current products,” Newman said.
Genworth, for example, had been intentionally slowing sales, by reducing producer compensation and pulling out of the California market, Newman said.
“Both of those things have changed now,” Newman said. “With the introduction of their new product, they have reinstated the previous compensation, and they are re-entering California on July 1 with a new product. So they have turned the tide, which should reverse some of what has been going on.”
Another company, Mutual of Omaha did a similar thing, Newman said.
“They reduced compensation, in order to stem the influx of business until they could introduce a new product (which we’ve heard will be available this summer or fall),” Newman said. “John Hancock made similar adjustments before that. That’s three of the top ten carriers who intentionally put on the brakes on sales for a bit.”
What John Hancock did seems to have helped strengthen its LTCI business, Newman said.
