Healthcare Policy Vol. 7 No. 1 2011

Healthcare policy

Robert G. Evans¹ 

关键词: Long-term care;    LTC;    insurance;    Manulife;    John Hancock;    stock market;    shareholder;   

DOI  :  10.12927/hcpol.2011.22518

学科分类：地球科学(综合)

来源: Longwoods Publishing Corp.

【 摘 要 】

Long-term care (LTC) insurance is a salesman's dream. Millions of well-heeled boomers, anxious to protect their estates from the random expropriation of institutional dependency – what a market! But for Manulife, bleeding $1.5 million a day in LTC claims through subsidiary John Hancock, LTC is a nightmare. Company spokesmen blame unexpected increases in life expectancy. But management's fundamental error was insuring correlated risks. Risk pooling works only when individual risks are uncorrelated. Increases in life expectancy affect all contracts together. Manulife made the same mistake selling equity-linked annuities with guaranteed floors – essentially insuring against stock market declines. Results for shareholders have been catastrophic. Top management, meanwhile, have been honoured and richly rewarded.

【 授权许可】

Unknown