The long term care insurance industry is maturing but still searching for sustained profitability as it works to market a complicated product offering, according to a new study by Conning Research and Consulting Inc.
LTCI is now a $6.7 billion industry, according to Conning, with a five-year compound annual growth rate of 17 percent through 2004. Almost half of that growth, however, can be attributed to rate increases. In addition, they say new sales have begun to decline.
“Long term care insurance has begun to break out of its limited distribution network and is increasingly being understood to be part of a financial planning and lifestyle planning program, which may well be the path to sustained profitability,” said Stephan Christiansen, director of research at Conning. “Yet the long term care insurance industry is sorting through a number of issues, including product and actuarial complexity, high producer compensation, and evolving consumer perceptions.”