General Cologne Re has reported sales of long term care insurance (LTCI) policies in the UK continu...
General Cologne Re has reported sales of long term care insurance (LTCI) policies in the UK continue to be disappointing, with only 39,000 pre-funded policies sold.
In its latest report, Risk Insight, figures show sales started to decline after 1996 amid political uncertainty over the role of State funding of LTC. Immediate needs policies have increased at a steady rate.
However, according to the report, the future looks strong due to more certainty regarding the Government's role.
Under the current means-testing system, it estimates a quarter of the population could be forced to self-pay.
This, allied with the regulation of LTCI policies by 2003, led the reinsurer to predict the product is set to form an important part of financial planning advice given by IFAs.
Jim Randall, managing director at General Cologne Re, said: 'There are definite signs the long term care market is beginning to develop more strongly, particularly as there is more certainty of the Government's role, coupled with increasing consumer awareness of the need for this cover.'
Risk Insights also notes that the larger and more mature US market has less uniform financial results.
Some companies have left the annual US$6bn market as results failed to live up to expectations.
The reinsurer put this down to non-standardised underwriting methods, and has attempted to address the problem with an internet-based underwriting manual for the industry.
