Well, here we are in our first foray into the bi-monthly format. Hope and I have already expanded our personal travel plans to include a jaunt to North Carolina to spend time with her (our) family. It seems they get lonely in December, as there are a multitude of August birthdays, including the newest member of the assemblage, Penelope Novonglosky, born August 22, 2023, and the Matriarch, Nanie, celebrating her 90th!
But the new format doesn’t leave me with an entire month to fritter away, as Broker World plans to offer web exclusive content on the “off months” including continuing to offer our monthly columnists (except, unfortunately, Dave Murphy, who has also decided to go bi-monthly). Also in the works are plans to offer further web exclusive content including sponsored editorial and industry news. I hope that loyal Broker World readers will embrace and enjoy the new content on www.brokerworldmag.com. Suggestions for further content are welcome, send them to me at showard@brokerworldmag.com.
Now to the “issue” at hand. It seems even more appropriate these days to include the annual LTCI survey in the Life Insurance issue, based on the great work from friend Claude Thau and the wonderful folks at Milliman, Nicole Gaspar, Chris Giese, and of course Sophie Fosdick. This year’s survey included just seven insurers providing stand-alone LTCI sales distribution, total 2023 sales data included one additional insurer and 2023 inforce data included two additional contributors. My thanks, and hopefully our entire industry’s, to those companies who continue to march forward in the fight.
Myriad are the possible causes for the decline in carrier involvement in stand-alone over the years, preeminently I suspect due to a distinct lack of profitability. Contributing factors no doubt to blame were the initial neophytic foray into the long term care insurance product business producing woefully inaccurate lapse ratio calculations and the attendant pricing kerfuffle, the drastically elongated low interest rate environment, and, of course, the public’s steadfast refusal to apply the same “use it or lose it” acceptance to LTCI that they, as a whole, willingly (or grudgingly?) grant to home and auto insurance.
Government intervention has helped mitigate to a small degree the looming long term care crises facing society as a whole and state Medicare programs in particular, Partnership programs most notably. More intrusive mandates seem inevitable, and unfortunately most currently propose solutions with comically irrational viability assumptions, completely ignorant of sound insurance industry actuarial practices, due to I imagine either hubristic disdain, or adversarial refusal to consult our industry, or some combination of both. Let’s not forget to add to the ledger the bell-ringing successes of countless bureaucratic programs at eliminating cronyism and strictly enforcing cost containment.
Our industry is uniquely suited to partner with government entities to address viable solutions to cope with the “Silver Tsunami” that is irreversibly gathering force to wreak destruction on state budgets and overwhelm care giving institutions. Unless, of course, we as a country adopt some version of the Carrousel solution featured in the cult film Logan’s Run.
As with all entities dependent on the whims of voters, Government “partnership” with the insurance industry, if previously enacted rate increase limitations are any indication, will no doubt incorporate further uninformed, likely unsound, restrictions and/or directives. We’ll wait and see how onerous those may be. Carriers must remain profitable to maintain viability, continue to directly employ thousands, and provide a livelihood to hundreds of thousands of active producers. Despite the apparent mindsets of some, profit is not a dirty word. Profit provides employment which enhances life. On the positive, the Washington Cares Act drove a stampede to the LTCI industry to avoid the “use it and stay in the state or lose it” tax mandate. Still to be seen are the lapse ratios on those policies.
As has been the case in our industry for most of its existence, we’ve independently created solutions that not only serve a multitude of needs but now directly address long term care needs and diffuse the “use it or lose it” consumer conundrum. Whether they are long term care riders, hybrid products or straight asset-based long term care, our industry is creating solutions to help the informed consumer to mitigate the often overwhelming cost of long term care. A comparatively “lucky few” consumers have bolstered their future livelihoods and their retirement dreams by taking advantage of these solutions. Also on the menu are care annuities, long term care life settlements and reverse mortgages to aid an aging populace, but one critical factor remains in the way of this aid to those in need. The most relevant, knowledgeable, available, and again uniquely suited source for information about these solutions is you. The independent insurance producer. Go get ‘em! And may God bless you.[SPH]
