MetLife Inc. Chief Executive Officer Robert Henrikson said the insurer’s retreat from the long-term care market will make the company stronger because prices for the coverage were inadequate.
The coverage “does not allow you to have a necessary return on capital and still be competitively priced,” Henrikson said today at a conference in New York, where the firm is based. “We felt just uncomfortable continuing to grow” in the business.
MetLife, the largest U.S. life insurer, will halt the sale of new coverage after Dec. 30 while continuing to honor previously written contracts, the company said Nov. 11. Henrikson is focusing on expansion in Asia and Europe after paying $16.2 billion on Nov. 1 to buy a life business from American International Group Inc.
Long-term care policies provide coverage to help pay for home-health aides or residence in a nursing home or assisted- living facility. Rising costs for care, longer life spans and lower bond yields are pressuring profits from the business.
“Because of the return on capital, we’re stronger” by not selling long-term care insurance, Henrikson said in an interview after speaking at the National Underwriter conference, which was sponsored by Ernst & Young LLP.
Source : Bloomberg
