Important work happening at Milliman

Asset modeling/AG 53

Milliman assists insurers with asset projections and asset allocation decisions and determination. This includes analyses for asset adequacy testing, best estimate liability (BEL), economic balance sheet (EBS) calculations, GAAP calculations, and other regulatory and financial reporting requirements. Recognizing the growing sophistication of insurance portfolios, we have significantly expanded our asset-liability management (ALM), strategic asset allocation (SAA), tactical asset allocation (TAA), and portfolio optimization (POP) services to assist insurers and asset managers.

Our solutions are designed to help insurers and asset managers align investment strategies with liability characteristics, risk-return profiles, and regulatory expectations by considering the implications of traditional, alternative, and complex asset classes. As part of the traditional cash flow testing and deficiency reserve analysis, we have reviewed asset portfolios along with the investment strategies that insurers use.

Through that work, we have developed broad industry perspective concerning the composition of asset portfolios typically held by insurers and investment strategies that insurers use. This helps companies better manage the risk-return profiles desired, particularly in light of changing market and macroeconomic environments. As part of the annual asset adequacy analyses, we often prepare and develop AG 53-required filings, including the excess spread allocation to various risks.

Product development

CareScout Insurance Company, an affiliate of Genworth Financial, launched its new standalone LTC insurance (LTCI) product for retail sales this year, and it has been approved in the Interstate Insurance Compact. The product provides pools of money (e.g. $100K, $200K, etc.) for LTCI benefits and inflation protection options, among other features. Policyholders have access on a voluntary basis to the CareScout Quality Network, a curated nationwide network of aging care providers. CEO Tom McInerney indicates the product is priced with conservative assumptions and subject to regular reviews to address price stability, and that the suite of CareScout Insurance offerings may expand to include other hybrid policies.

Milliman has observed the general trend of new product features (such as this network) as insurers move to managing policyholders’ health during and even before claim time. Milliman’s LARA®, a predictive modeling solution for LTC carriers, provides up-to-date morbidity risk scoring and is built to assist carriers in these management efforts.

The combination life and LTC product market continues to expand, notably in the worksite insurance space. Various companies have filed products with the states in the past 12 months. The current designs emphasize the LTC component of the product, with some products reducing the guaranteed or actual death benefits in later durations. As an example of this, Voya’s Lifetime Life product is a permanent term product with LTC acceleration, restoration, and extension of benefits, where the death benefit is reduced by 50% at age 70 (or after 25 years of premium payments, whichever is later). The product design echoes the efforts of the Society of Actuaries LTC Think Tank and the LifeStage Protection product, where life insurance benefits feature early in the policy durations, and LTC later.

In addition, other companies have been exploring innovative approaches to make products more attractive and predictable, such as annuity or life + LTC policies, rate stability and variable pricing, claims prevention/intervention strategies, care navigation and provider discounts, and caregiver support services.

LARA/wellness

Wellness programs continue to have momentum, with more companies implementing new programs and some programs entering their second year. We are working with clients to set up programs, calculating confidence intervals around results and setting up ways to measure savings without control and study groups.

We have also created some simple feasibility frameworks to help consider the potential upside of various wellness programs on the front end before greenlighting more due diligence and engaging with vendors.

Upcoming studies

Guidelines

We are gearing up for the next iteration of the Milliman Long-Term Care Guidelines (Guidelines) and are in the process of collecting data. If you would like to contribute to the Guidelines research, have questions about the data request, or feedback to enhance the Guidelines, please reach out to us with your thoughts at [email protected]. We are excited to see how post-COVID data is beginning to emerge across the LTC market.

Combination products

Additionally, we are preparing for the next edition of Milliman’s Combination Product Experience Study. This will be our fourth industry-wide study focused on the experience of combination products. Our earlier studies were conducted in 2018, 2020 and 2022. The primary focus of the study is on incidence, claim termination, lapse/surrender and mortality rates. Our 2022 study included data from 13 companies with about 2.7 million life-years of exposure. This research has been invaluable in understanding the emerging experience of this key market. We will be reaching out to past and prospective participants later in the year. If you would like to contribute to this study please reach out to us at [email protected].

Industry news

ILTCI recap

The March ILTCI Conference in Philadelphia consisted of great sessions discussing a variety of industry topics including, but not limited to, wellness, the future outlook of LTC regulation, and the changing landscape in predictive analytics.

The conference opened with a keynote speaker and panel discussion on caregiving and the challenges caregivers face on a day-to-day basis. This was a touching session where the audience got to hear firsthand the personal stories of caregivers, which offered valuable insight into the realities of caregiving and LTC. The session also highlighted an upcoming documentary, “Caregiving,” which aired nationwide on PBS in June 2025 and shines a light of the challenges of caregiving.

One of the more memorable sessions from the conference was “The Main Event: Do Wellness Programs Really Work?” The session was structured as a debate on wellness between a carrier with experience implementing wellness programs and a consulting actuary who has examined data on such programs. The session underscored the challenges to implementing an effective wellness program, but highlighted key effectiveness metrics and benefits outside of financial savings that can help companies implement these programs.

LTC reform updates

Here are a few updates on LTC reform efforts:

• Massachusetts: Milliman completed a feasibility study for the Massachusetts Executive Office of Health and Human Services (EOHHS) on potential LTC financing solutions for the state of Massachusetts. The results were presented and discussed during “Financing Long-Term Care in Massachusetts: Release of the MA Long-Term Care Actuarial Study,” a public webinar on June 10, 2025. Current legislation (H.792 and S.476) proposes establishing a special commission to further explore a statewide long-term services and supports (LTSS) program.
• Washington: In May 2025, SB 5291 was enacted, introducing several changes to the WA Cares Fund. The new law sets standards for supplemental LTC insurance policies, permits individuals who previously opted out to rescind their exemption, makes inflation protection automatic, and launches a pilot program to provide early benefits to a select group before July 2026.
• WISH Act: Congressman Suozzi (D-NY) reintroduced the WISH Act in May 2025 with Congressman Moolenaar (R-MI). The proposal would establish a federal LTSS program offering a catastrophic benefit—up to $4,000 per month after a waiting period of one to five years. Details on program financing have not yet been specified.

We will continue to monitor and report on LTSS-related developments both in the states highlighted above and in other states across the country throughout 2025.

NAIC LTC Actuarial Working Group

The National Association of Insurance Commissioners (NAIC) LTC Actuarial Working Group continued to discuss potential changes to the Long-Term Care Insurance Multistate Rate Review Framework (LTCI MSA Framework). This work culminated at the working group’s June meeting when it voted to adjust the cost sharing used in the LTCI MSA Framework used to review LTC rate filings. The working group voted in favor of the “Alternative” proposal which has cost-sharing factors ranging from 5% for cumulative increases 100% or below to 85% for the portion of cumulative increases in excess of 800%. The vote will now move to the Health Actuarial Task Force meeting on July 14.

AAA issue briefs

The American Academy of Actuaries (AAA) released an issue brief on the current state of LTCI in February 2025. The issue brief touches on product design of LTC solutions, management of in-force blocks, engagement with policyholders in wellness programs, and potential future areas of uncertainty for the industry.

The AAA also released an issue brief on the impact of COVID-19 on LTCI in June 2025. The issue brief provides an update from an earlier issue brief from January 2021 and discusses emerging experience from the pandemic and remaining unanswered questions.

SOA Virtual Health Meeting

Milliman consultants Joe Neary and Prannoy Chaudhury will present with Char Hu from The Helper Bees on July 24 at the Society of Actuaries (SOA) Virtual Health Meeting. The topic is "LTC Industry Update" and will focus on the current rate increase environment, Mergers & Acquisitions (M&A), and wellness programs. We hope you will join us!

M&A work

On February 27, 2025, Unum Group (Unum) announced a $3.4 billion LTC reinsurance agreement with Fortitude Reinsurance Company Ltd. (Fortitude Re). The coinsurance deal represents about 19% of Unum’s total LTC statutory reserves. The transaction also includes approximately $120 million in individual disability insurance (IDI) premium, representing 20% of Unum’s in-force IDI premium. Fortitude Re plans to retrocede biometric risk to a highly rated global reinsurer. Unum will continue to provide service and administration for the reinsured business.

This is the third recent major reinsurance deal involving LTC business, building on two earlier deals announced by Manulife in December 2023 and November 2024.

Milliman publications and news

Milliman’s annual U.S. industry LTCI claims projection

We recently took the data from the NAIC LTC experience reporting forms, the Milliman LTC Guidelines, and Milliman Integrate® to see how many LTC paid claims we expect in the future with the existing policies in force. We had fun with this exercise, and we look forward to your feedback.

LTC rate increase landscape update

In this article for the SOA, Milliman consultants Cassi Noel and Courtney Williamson provide insights into the current LTC rate increase landscape. These insights are based on the results of the 2024 Milliman LTC rate increase survey with comparisons to the 2021 survey and the authors' more recent experience.

2024 LTC rate increase survey

The 2024 LTC rate increase survey report is now available on Milliman’s website. The report summarizes the results of Milliman’s third survey and includes a comparison to prior years. Thanks once again to all participants in making this survey possible. As a reminder, companies that participated in the survey can request a meeting that will summarize their responses relative to those of all other respondents. If you’d like to know more, please contact [email protected], Courtney Williamson, Andrew Duxbury, or Mike Bergerson.

Long-term care insurance valuation: 2024 report

Milliman conducted its eighth triennial private LTCI valuation survey in 2024. The objectives of this survey were to review and document the assumptions and methodologies related to the determination and testing of active life and disabled life reserves, as well as the asset strategies and investments backing the reserves. This report documents our compilation and analysis of responses to key survey questions from 20 distinct private LTCI carriers. The results and discussion are presented in the following main sections:

• Adequacy of active life reserves
• Disabled life reserves
• Asset assumptions

LTC coverage in Medicare Advantage: Why it is likely not enough

Since 2019, Medicare Advantage (MA) plans have been allowed to offer some LTC-related supplemental benefits, but these benefits remain limited in both scope and value compared to the actual costs of LTC. This article explores the types of LTC services now available through MA plans, analyzes how much of typical LTC costs these benefits actually cover, and highlights the major challenges—such as high costs and anti-selection risk—that prevent MA plans from offering more comprehensive LTC coverage.

Milliman in the community

Opportunity Scholarship

In December, Milliman awarded 14 Opportunity Scholarships to students from the United States, South Africa, and Canada to help students meet academic and professional goals. Milliman created the program to assist students from racial and ethnic groups that are underrepresented in the fields of actuarial science, data science, computer science, economics, programming, mathematics, statistics, data analytics, or finance. Since 2017, its inaugural year, Milliman has awarded 140 scholarships.

Please reach out to a Milliman consultant to discuss any of these topics or other related items that are of interest.