So far, three other carriers with LTCI operations — one with a unit that still sells LTCI, and two with closed blocks of LTCI business — have been a little warmer toward the operations in third-quarter earnings announcements than they have been in other recent quarters.
CNO Financial Group Inc. (NYSE:CNO), a company that continues to sell LTCI, reported “favorable reserve developments” at its LTCI unit.
CNO is reporting $5.6 million in new annualized LTCI premiums at its Bankers Life unit for the latest quarter on $124 million in collected premiums, down from $6.2 million in new annualized premiums on $131 million in for the third quarter of 2013.
Unum Group Corp. (NYSE:UNM) noted an improvement in claims for its closed block of LTCI business. That company is reporting $158 million in LTCI operating revenue for the latest quarter, up from $157 million for the comparable quarter in 2013.
CNA Financial Corp. (NYSE:CNA), a company that stopped marketing LTCI early, says its “life and group non-core” unit results “relate primarily to the individual and group long-term care business.” The company’s life unit reported a net loss of $21 million for the latest quarter on $139 million in net earned premiums, compared with a net loss of $36 million on $140 million in net earned premiums for the third quarter of 2013.
Here are three snapshots of what the companies have been saying about their once and current LTCI operations.
1. They would like the Federal Reserve Board to raise interest rates, please.
Under Janet Yellen, the new Federal Reserve Board chairman, the Fed has talked about possibly getting rates off the floor at some point but failed to take action to get them off the floor.
Insurers with products that are designed to pay off many years in the future, or to pay benefits over many years, or both, suffer from low rates because low rates depress earnings on the bonds and other fixed-income holdings insurers typically use to support their obligations.
Unum notes in the description of challenges in the “safe harbor statement” it adds to its earnings announcements that one of the major risks it faces is “sustained periods of low interest rates.”
Low rates hurt the investments that back Unum’s long-term disability insurance policies as well as its LTCI block.