A study conducted by Conning Research and Consulting has revealed that the long term care insurance industry may need to re-examine its value proposition to break out of the small subset of current clients and serve the broader market.
The study quantifies the market need and potential market scope, and identifies the current product features and pricing challenges. Further, the study presents potential industry responses to flagging growth.
Stephan Christiansen, director of research at Conning, said: Despite considerable product innovation over the past few years, the Long Term Care Insurance industry’s solutions still do not resonate with the broader market. Incremental product and pricing innovation and consumer education continue in an attempt to bridge this gap, but it is likely not enough to ensure significant consumer understanding and acceptance.
Terence Martin, analyst at Conning Research & Consulting, said: Today, long term care insurance is sold primarily by specialist agents to a niche market of affluent and risk-averse seniors.
Over the past few years long term care sales growth has declined in both individual and group markets despite the best efforts of insurers. We have sized the potential market for long term care insurance and estimate that the current industry penetration is just 9%.