LTC Bullet:  LTCI Update

Friday, August 9, 2013

Stone Mountain, Georgia—

LTC Comment:  Broker World magazine has published its annual long-term care insurance survey for 2013.  Highlights after the ***news.***

*** DAMON’S BACK.  Turns out he was a jury “alternate” meaning he had to sit for all the proceedings and testimony, but he’s excused during deliberation unless needed to replace one of the regular jurors.  Welcome back, Damon. ***

*** BACK ON SCHEDULE.  And now that Damon has returned, we’ll try to get back on our regular publication schedule for LTC E-Alerts and LTC Bullets starting with today’s Bullet. ***

*** IN THE MEANTIME, Steve’s in Atlanta, near the famous Stone Mountain, living in the Silver Bullet and starting the field work for our study of Medicaid and long-term care financing in Georgia.  We’re working on this project under the auspices of the Georgia Public Policy Foundation (  More to come as the project progresses. ***



LTC Comment:  Every year Broker World magazine publishes surveys of traditional and worksite long-term care insurance.  The surveys’ authors are well known LTCI experts, Claude Thau, Dawn Helwig, and Allen Schmitz.  We’ve culled a few highlights from this year’s surveys below.  Check out all the details in the July and August issues of the magazine.  Be sure to subscribe to Broker World if you haven’t already.

It’s clear from the following data that the private long-term care insurance industry continues to face daunting challenges.  On the other hand, it is equally true that private LTCI is playing a bigger and bigger role in financing extended care as its policies mature and claims increase.  What the future holds is anyone’s guess, but a likely scenario is that publicly financed long-term care will face harder times, but pressure holding back LTCI will retrench.


Excerpts from “2013 Long Term Care Insurance Survey,” Broker World, July, 2013

  • “The 12 carriers that contributed statistical data to this survey sold 190,353 policies for $466,167,460 of new annualized premium in 2012, plus 188 single premium policies with $9.78 million of premium.”
  • “We estimate that the entire stand-alone LTCI industry, including insurers which discontinued sales, sold 232,800 policies (0.7 percent more than in 2011) for $564.3 million of annualized premium (5.0 percent more than in 2011).”
  • “As of April 2013, 17 insurers sell stand-alone LTCI in the United States (down from 20 a year ago), and only one insurer (down from two a year ago) sells in the true group guarantee issue market.”
  • “Ten participants reported individual claims for 2012 and two reported true group claims. Their total claim payments rose to $3.035 billion in 2012, 18 percent higher than their 2011 figures, whereas their total in-force premium rose only 5.8 percent, demonstrating the ‘tip of the iceberg’ nature of LTCI claims. These insurers have paid more than $20 billion in LTCI claims through 2012.”
  • “The LTCI industry has made a much bigger difference than the above numbers indicate because a lot of claims are paid by insurers who no longer sell LTCI. According to the NAIC’s report for 2011 (the most recent report available when this was written), the industry incurred $6.8 billion in claims in 2011, boosting the industry to $73.6 billion of claims incurred since 1991. Industry incurred claims increased 9.0 percent in 2010 and 9.6 percent in 2011.”


Excerpts from 2013 Analysis of Worksite LTC Insurance, Broker World, August, 2013

  • “In 2012, insurers reported sales of 18,076 WS [worksite] policies for $35,556,483 of new annualized premium.”
  • “Of the seven carriers that contributed WS sales for both 2011 and 2012, five increased sales in 2012 (by as much as 88 percent) and two experienced sales decreases (by as much as 55 percent).” 
  • “Reported WS LTCI sales accounted for 6.3 percent of the LTCI industry’s new annualized premium sold in 2012 and 7.8 percent of the number of policies sold.”
  • “The nine insurers’ average WS premium per policy was $1,967, down 3 percent from 2011. . . .  The 2012 WS average size premium was 77 percent of the average size premium for NWS [non-worksite] sales ($2,544) because the average age is younger and there are some small core premiums.
  • “Four insurers reported the average number of policies per employer case, which ranged from 19 to 140.” 
  • “Issue age and maximum daily benefit are considerably lower in the WS market, and 37.7 percent of the WS policies (down from 48.6 percent in 2011) either did not have a benefit increase feature or had a feature that would require significant future premium increases.” 
  • “More than half (57 percent) of the WS policies meet partnership qualifications, compared to 66 percent in the NWS market. The executive carve-out WS market insures people who generally don’t need or can’t benefit from the partnership programs. But the rest of the WS market provides an avenue to reach people who are more likely to benefit from partnership programs.”