Genworth Financial Inc. and other struggling, longtime issuers of underpriced long-term care insurance (LTCI) policies have complained for years about a serious problem: LTCI policyholders are thoughtful people who love their coverage.
In the past, LTCI issuers have reported that even mammoth LTCI premium increases have led to just modest “shock lapse” figures.
Genworth executives told securities analysts Wednesday, during a conference call they held to go over second-quarter earnings, that they’re seeing a little give in the policyholders’ iron grip on their LTCI policies.
Genworth has now received approvals for rate increases for $11.5 billion in LTCI premium rate increases.
The company reported, in a conference call slidedeck, that the average approved increase fell to 37%, on $238 million in in-force premium revenue, in the second quarter, compared with an average of 58%, on $160 million in in-force premium revenue, in the year-earlier quarter.
But policyholders’ responses to LTCI rate increases helped reduce LTCI policy reserve needs by $118 million in the second quarter, up from $39 million in the second quarter of 2018.