“LTCI Issuers May Be Counting on Health Improvement That Isn’t Coming: Prudential,” by Allison Bell, ThinkAdvisor

“Prudential Financial Inc. is adding $1.4 billion to its long-term care insurance (LTCI) reserves, to reflect the possibility that improvement in the ability of the insureds to function may not show up. Back in 2012, when Prudential stopped selling new LTCI policies, it had few LTCI policyholders collecting benefits. It used data from outside sources to set the assumptions used to decide how much to set aside to pay claims, according to Robert Falzon, the company’s chief financial officer. Prudential had assumed that morbidity levels would improve about 1% per year, just as mortality tends to improve each year. Now, Falzon told securities analysts Thursday, during a conference call, Prudential has more information about its policyholders’ claims. After in-house analysts reviewed claim data, ‘we felt there was no discernible trend toward morbidity change,’ Falzon said.”

LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform):

So much for the hopeful research on decreasing morbidity that inspired such expensive optimism a few years ago.

LTCI Issuers May Be Counting on Health Improvement That Isn’t Coming: Prudential

#ltci
#goldencareagent