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2016's fastest-growing individual long-term care writer to take a breather

Another long-term care insurer is pulling back from the challenging business line, at least temporarily.

LifeSecure Insurance Co., a Blue Cross Blue Shield of Michigan Mutual Insurance Co. subsidiary, led the industry in terms of its growth rates in both new individual long-term care policies issued and individual long-term care earned premiums during 2016 among entities at the group or top-tier level with at least 1,000 new issues in 2015. The company recently informed distributors that it would discontinue sales of its current multilife long-term care product in all states for at least the remainder of 2017.

"As we often reiterate, we remain committed to the long-term care insurance industry, but we are also constantly monitoring our business and the ever changing LTC industry," the company said in the letter posted on various distributor websites.

LifeSecure expects to roll out a "new generation" product in early 2018, with filings to occur later in 2017. The company also outlined exceptions to the halt it planned to impose for certain managing general agencies.

"Worksite solutions will continue to be a strong focus across our whole product portfolio," the company stated, adding that it regrets "the temporary disruption of our LTC availability."

LifeSecure reported an individual long-term care policy count of 28,092 as of year-end 2016, according to disclosures on the Long-Term Care Experience Reporting Form 2 of its annual statement, up from 19,578 at the start of the year. The company said it issued 9,690 new policies during the year, an increase of 88.7% from 2015. Its 2016 individual long-term care earned premiums of $36.3 million marked an increase of 43.3% from the prior year.

According to another section of the filing, the company introduced a re-priced long-term care product with strengthened underwriting requirements in 2014 and "[r]ecently" shifted distribution efforts to focus on the worksite market "to better manage growth and capital requirements." It attributed higher accident and health premiums in 2016 to the combination of "recent strong long-term care sales" and the effects of rate increases on assumed long-term care business. LifeSecure assumed blocks of long-term care business from the likes of Blue Cross & Blue Shield of Florida Inc. and American Fidelity Assurance Co. The company also noted in the 2016 filing that it planned to pursue a rate increase on its "first-generation long-term care product" during 2017.

Among all property and casualty, life, health, and fraternal companies that included the same form as part of their annual statements, the count of new issues tumbled 12.9% year over year in 2016, but aggregate earned premiums increased 0.8%. New individual long-term care issues for Northwestern Mutual Life Insurance Co.'s Northwestern Long Term Care Insurance Co. declined nearly 18% in 2016, but at a count of 18,285, the company continued to lead the industry. Mutual of Omaha Insurance Co. and its subsidiary ranked No. 2, with 16,017 new issues between them, up 11.5% from 2015. The Genworth Financial Inc. life group, which ranked second by new issues in 2015 and first by a wide margin in 2014, had new issues of just 4,443 in 2016, down 75.6% year over year. LifeSecure's tally placed fourth, behind Transamerica Life Insurance Co. and its affiliates.

Some of 2016's largest individual long-term care insurers by earned premiums, including the likes of MetLife Inc., Prudential Financial Inc., CNA Financial Corp. and Unum Group, announced they would stop issuing new policies years ago amid a myriad of challenges facing the business line. MedAmerica Insurance Co. and its affiliates along with Manulife's John Hancock companies joined those ranks during the first and second halves of 2016, respectively.

Although John Hancock's new individual long-term care issues increased 33.5% during the year, their 2016 tally of 6,136 new issues remained 40.3% below their 2014 level. They continue to offer long-term care coverage as an accelerated benefit rider to life insurance products. The MedAmerica group's new issues plunged 89.7%, a rate of retreat nearly matched by COUNTRY Life Insurance Co., which said in its annual statement that it continued to evaluate the line's profitability after it recorded a $22.6 million premium deficiency reserve during 2016.