Utilization is a key aspect of long-term care (LTC) insurance assumptions that can impact insurers’ pricing, profitability, and reserves. Several nuances can make it challenging to develop and set appropriate utilization assumptions. In the article “Utilization: Long-term care’s ‘middle child’,” Milliman actuaries Mike Bergerson and Michael Emmert discuss some factors involved with calculating utilization and how they affect LTC reserves.
The long-term care insurance industry continues to look for ways to manage disparities between premiums and costs. Premium increases and benefit reductions are likely to remain major factors in business decision-making. Insurers must carefully consider the impact of rate changes on their bottom line—not just in terms of raw numbers, but in how they relate to experience and the potential for future profits or losses across the spectrum of benefits. Milliman actuaries Mike Bergerson and John Hebig provide some perspective in this article.
This article was originally published in the April 2017 issue of Long-Term Care News.