Munich Re confirmed to The Insurance and Investment Journal that it left the long-term care insurance market in 2017. The reinsurer says it bowed out due to the product’s sluggish sales, despite 20 years of promotion.
This subtle exit in early 2017 led insurers like Manulife to quit this less-than-lucrative market at year end. Previous years saw other defections. Desjardins Financial Security has announced that it will drop the niche in June 2018.
“Long-term care insurance represented less than 1% of life and health insurance sales in Canada. Sales were not satisfactory and their growth was weak, as was interest among the sales force,” Cédric Thibault, Director, Business Development, Individual Reinsurance at Munich Re told The Insurance and Investment Journal in an interview.
More research and development
Munich Re’s move does not signal a rebuke or official withdrawal from this market, the senior director continues, although no return is expected in the near future.
Instead, the reinsurer has decided to focus on research and development. It is thus channelling its efforts and resources into predictive modelling, automated risk selection, and data, together with “other initiatives that can fuel growth,” Thibault says.