Long term care insurance takes another hit from exiting insurers

Long Term Care Insurance Industry - Insurance companies exiting - Goodbye

Another major player in this sector of the insurance industry has announced its market withdrawal.

Amid a slew of existing struggles in the long term care insurance industry, Genworth has now announced that it has stopped selling individual stand-alone policies. Genworth had once been the largest seller of L.T.C. coverage in the United States.

Genworth’s cessation of long term care insurance sales is immediate as a part of a broader move.

This is becoming an increasing trend in the long term care insurance industry. Genworth is no longer selling individual stand alone coverage and has also stopped immediate annuities through both brokers and agents.

Insurance companies are commonly reducing their presence in the long term care insurance market, or are stepping out of it altogether. This sector of the industry is in deep struggle to keep up with a changing ecosystem and a much different future than it had predicted in its models even a couple of decades ago.

Genworth has said that its decision is being labeled as a temporary one. At the moment, it plans to sell only through direct-to-consumer platforms, or through affinity groups and employers. Currently, that represents an exceptionally limited market.

It is unclear as to whether or not Genworth will return to the long term care insurance industry or when.

Independent brokers and agents have expressed deep concern that this could cause a domino effect across the industry. As carriers take greater steps to reduce distribution costs, particularly in struggling areas such as L.T.C. insurance, they are worried that more insurance companies will seek to cut out brokers and agents in an effort to reduce their distribution expenses.

The current decision will not impact the 1.2 million existing Genworth long term care insurance policyholders. The decision will impact only those who have not yet purchased coverage, said a Forbes report.

That said, for the long term care insurance industry as a whole, this is just one more blow at a time of considerable struggle. Traditional policy sales have been in a 90 percent nosedive over the last ten years. Long Term Care Insurance Industry - Insurance companies exiting - GoodbyeMoreover, there are fewer than a dozen insurers still offering the product in the first place. As a result, as each new carrier decides to depart the industry, it has a substantial impact on the market as a whole.

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One Thought to “Long term care insurance takes another hit from exiting insurers”

  1. A great example of “fake news”. This is a worthless, biased, cheap-shot, follow-the-(blind) leader, nearly-factless hit job on Genworth and the LTC insurance industry that serves no apparent purpose other than to show that the author is clueless about about the industry being written about. Maybe he is paid by clicks? First the headline mentions “insurers” (plural), but then only talks about Genworth. It then takes a headline, a bold sub-head, one bold paragraph and three more paragraphs of restated misleading statements (repeating 5 times the wrong conclusion that Genworth is “exiting”, in a “market withdrawal”, has “stopped selling”, a “cessation”, and is “no longer selling”) before the fact is mentioned that this is meant to be a TEMPORARY suspension. Quoting a Forbes opinion piece (that’s nearly as misinformed) isn’t reporting. Genworth’s sales in 2018 were 3% of the market. Four of the top 5 sellers of traditional LTCI actually showed growth last year. There is actually clear evidence – if anyone would bother to do some real reporting – that Genworth plans to be back in the brokerage sales market. There are maybe 6 agents who are worried that this will create a “domino-effect” in the marketplace (one of whom I know said that just to get more clicks on his website to generate more quotes) – this idea is born out of total ignorance of how the insurance industry and buying public works, especially with products like LTCI – but click-baters love to make stuff up. BTW, there are only a dozen companies that still write individual disability insurance, but no one suggests that industry is in trouble …

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