LTCI carriers face tough crowd

New York — A long-term care insurance (LTCI) executive squared off today against a skeptical rating analyst at a Standard & Poor’s Ratings Services conference session on long-term care (LTC) products.

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The moderator, Li Cheng, an S&P senior director, set the tone for the panel by sighing and conceding that LTCI is a “difficult product.”

Michael Doughty, president of John Hancock Insurance, talked about the efforts his company and competitors have made in recent years to learn from bad experience and introduce products that help consumers but expose the issuers to a much lower level of risk.

He talked, for example, of efforts to develop products set up in such a way that the issuer will ask for modest increases on a regular basis, rather than applying for permission to impose huge increases every 10 years or so.

Doughty noted that he himself had asked, when he came in, why the company was still in the LTCI market. The answer, he said, is, “There is a huge consumer need.”

Neal Freedman, an S&P analyst who published a review of the LTCI sector earlier this week, acknowledged that the need is great, but he questioned whether private industry can play a major role in meeting that need.