Analysts at Fitch Ratings have been saying, in public, for more than a year, that U.S. long-term care insurance (LTCI) issuers should post more LTCI performance data.
Harry Markopolos, an accountant who says members of his company might earn a profit if the price General Electric Company’s stock goes down, drew Wall Street investors’ attention to the topic of LTCI issuers’ finances earlier this month, by suggesting that GE’s reports on its LTCI reinsurance business have been weak.
Now, Anthony Beato and other analysts at Fitch have come out with a new report of their own on the financial wellness of the LTCI companies they rate.
The analysts look at GE along with another reinsurer, Wilton Re Ltd., and 14 other companies. The 14 other companies are known primarily as direct writers of LTCI coverage but may also have some LTCI reinsurance business on their books.
A copy of the full report is available, behind a paywall, here.
Here are five highlights from the report, based on a copy Fitch sent to ThinkAdvisor.
1. The 16 companies ended 2018 with $163 billion in gross LTCI reserves.
The raw amount of reserves ranged from $3 billion, at three companies, up to $32 billion, at Genworth Financial Inc.
2. Wilton Re, and 7 of the LTCI issuers, appear to have “better” LTCI reserves.
The direct writers that received the Fitch analysts’ “better” reserve designation are Manulife Financial Corp., MetLife Inc., Thrivent Financial Inc., CNO Financial Group Inc., Northwestern Mutual Life Insurance Co., New York Life Insurance Co. and Massachusetts Mutual Life Insurance Co.
Thrivent, CNO, Northwestern Mutual, New York Life and MassMutual are still writing individual LTCI coverage.
3. Half of the 14 direct writers had claims roughly in line with expectations in 2018.
The direct writers that seem to have had actual claims that were under about 125% of the expected claims were CNO, MetLife, the Senior Health Insurance Company of Pennsylvania (SHIP), New York Life, MassMutual, Thrivent and Prudential.