Orlando, Fla. and Eden Prairie, Minn. - April 9, 2014 (BUSINESS WIRE) – To support the growing demand of life and long term care (LTC) hybrid products, Hannover Life Reassurance Company of America “HLR America” and the Insurance Administration Services division of Univita Health announce they have entered into a strategic alliance to deliver a scalable, total risk management solution that includes product design assistance, underwriting services, claims management and reinsurance.
Driving the trend for hybrid products are rising nursing home costs and increasing support needed as the population ages. Individuals over the age of 65 face a 68% probability that they will become cognitively impaired or unable to complete at least two activities of daily living (e.g. dressing, bathing or eating). In addition, the population of Americans over the age of 65 grew to 42 million in 2012, while the average cost of a private room in a nursing home increased to over $90,000 per year. Despite these rising costs and an increasing consumer need, less than 3% of the population has LTC protection and sales of stand-alone LTC policies are declining.
The decline in sales can be attributed to the increasing number of insurance companies who have exited the market, multiple rate increases and negative consumer sentiment towards “use it or lose it products.” In response to shifting consumer preferences, many leading insurers now offer alternative hybrid products that integrate life insurance death benefits, cash value protection features and LTC coverage. In addition to having more favorable risk dynamics than traditional stand-alone LTC products for insurance companies, hybrid products are an attractive alternative to individuals who have traditionally self-funded their LTC needs.
“Univita’s LTC division currently administers over 90% of the outsourced LTC market with an operational model that includes front-end processing, in-force administration, claims and care management,” said Tony Laudato, Vice President of Marketing, Mortality Solutions at HLR America. “Based on Univita’s leading market position, processing efficiency and dedication to LTC administration we feel confident in our partnership’s ability to deliver a unique and valuable solution to the market.”
HLR America maintains one of the largest databases of insured mortality data, which clients can tap into for additional knowledge and insight when refining underwriting criteria or when making pricing and product design decisions.
This partnership leverages HLR America’s actuarial and life underwriting strengths with Univita Health’s LTC administration expertise to provide a first of its kind, total risk management solution to direct insurers.
About HLR America
Hannover Life Reassurance Company of America "HLR America“, which is licensed and/or accredited in all 50 states and Puerto Rico, is the North American life and health reinsurance subsidiary of Hannover Re Group. Hannover Re, with a gross premium of EUR 14.0 billion, is the third-largest reinsurer in the world. It transacts all lines of non-life and life and health reinsurance and is present on all continents with around 2,400 staff. HLR America is rated "AA-“ by Standard & Poor’s and "A+" by A.M. Best. Additional information about the Company can be obtained from its web site at www.hlramerica.com
About Univita Health
Univita is the largest long term care administrator as well as an innovator in providing home-based care management, extending the reach of care management into the home. Our comprehensive approach addresses and manages the complete array of a patient’s care needs, encompassing both clinical and non-clinical drivers of health outcomes. Univita supports the care management efforts of health plans, insurers, health systems and physicians with a focus on the highest risk, most complex populations. To learn more, visit www.univitahealth.com
For HLR America
For Univita Health