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Thank you to everyone who was able to join me Friday morning for a phone call to answer your questions about our Asset Care® business. As promised, and for those who were unable to listen in, we’re providing this summary of the discussion and key questions related to Asset Care.
First and foremost, with the launch of our new Asset Care portfolio, we remain fully committed to our asset-based long-term care (ABLTC) growth strategy and to maintaining and improving our industry-leading product portfolio. We’ve been in the ABLTC business for 30 years, and we continue to see robust opportunities to grow in the market.
As always, we’re committed to maintaining strong product design and pricing discipline with a focus on the long-term nature of our products. While growing our business is important, so too is ensuring that we’re there to pay each and every lifetime guaranteed benefit promise that we make. Against the backdrop of continuing negative headlines on standalone LTC and the most challenging investment environments of my career, ABLTC continues to offer a favorable risk profile due to the inherent balance and diversification within the product design. And it is important to continue to maintain the right balance.
As an example, one response to the emerging environment was the introduction of our 20-year inflation option. With current long-term yields below 4%, providing unlimited 5% inflation benefits becomes a challenge. The introduction of the 20-year option helps mitigate these factors, providing an attractive inflation option, helping maintain the product integrity over time, and preserving affordability.
Clearly, the changes will require adjustment, and we truly appreciate the dialogue and feedback. At the same time, we believe Care Solutions continues to have a strong value proposition. We have streamlined the product configuration, while maintaining our unique joint and lifetime guaranteed benefit offerings. And, we remain committed to offering true lifetime catastrophic coverage.
We know 2019 will continue to bring changes to all life insurance products, including ABLTC, because of the 2017 CSO tables. We will continue to listen, monitor trends, and competitors, and to work with all of you, our distribution partners as we continue to look for opportunities to grow in the marketplace. We will continue to invest in and evolve our claims and new business capabilities that are also key to supporting our long-term growth. And, we will continue to focus on long-term value and collaboration, and we greatly value yours.
Questions and Answers
What is our commitment to lifetime benefits?
We remain fully committed to offering lifetime benefits in the ABLTC marketplace. The possibility of needing LTC for many years is really the catastrophic risk that our clients are seeking to move off their balance sheet.
In light of repricing, are there any concerns with the existing book of ABLTC business?
Our pricing reflects a long-term view of ABLTC products. As part of our process, we conducted a very thorough review of our reserves and risk, and we’re very comfortable with both of those on our existing book of business.
Why did OneAmerica move to gender-distinct pricing?
Non-gender-distinct was an original feature of our ABLTC product. Over the years, most of the industry has shifted to gender-distinct pricing, and with this relaunch we did too, reflecting the real differences in risk between men and women when it comes to long-term care.
Will OneAmerica re-evaluate pricing for Asset Care?
Our pricing is based on a thorough analysis of data including market conditions, interest rates, our experience with ABLTC products, and our risks relative to the benefits we provide. As always, we will continue to monitor our pricing and product position in the context of the market overall and the interest rate environment.
Has there been any change to the reinsurance agreement with the continuation of benefits (COB) rider?
We enjoy a strong reinsurance relationship with Hannover Life Reassurance Co. and will continue to with the product changes.
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For use with financial professionals only. Not for public distribution.
OneAmerica® is the marketing name for the companies of OneAmerica. Products issued and underwritten by The State Life Insurance Company® (State Life), Indianapolis, IN, a OneAmerica company that offers the Care Solutions product suite. Asset Care form numbers: ICC18 L302; ICC18 L302 JT; ICC18 L302 SP; ICC18 L302 SP JT. Not available in all states or may vary by state. Hannover Life Reassurance Company of America is not an affiliate of the companies of OneAmerica.
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OneAmerica® is the marketing name for the companies of OneAmerica.
Products issued and underwritten by The State Life Insurance Company® (State Life), Indianapolis, IN, a OneAmerica company that offers the Care Solutions product suite. The companies of OneAmerica®: American United Life Insurance Company®, The State Life Insurance Company®, OneAmerica Retirement Services LLC, McCready and Keene, Inc., OneAmerica Securities, Inc., and Pioneer Mutual Life Insurance Company®, a stock subsidiary of American United Mutual Insurance Holding Company. © OneAmerica Financial Partners, Inc. All rights reserved.
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