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Genworth Long Term CareMaine Bureau Of Insurance Public ForumDecember 2, 2021 Jamala Arland, SVP & Actuary, Long Term CareAlex Vichinsky, Regulatory Actuary, Long Term Care 2021 Genworth Financial, Inc. All rights reserved.
AgendaIndustry OverviewKey LTC IssuesSummary Of Maine Inforce & Rate ActionsGenworth’s LTC PositionLTC Initiatives For PolicyholdersPolicyholder Communications / ServiceMaine LTC Public ForumDecember 20211
Industry OverviewLTC Is A Critical & Growing NeedThe NeedImpacts Entire FamilyAge 65 Population Is Projected To Grow From58 Million In 2021 To 88 Million By 20501Two-Thirds Of Caregivers Use Their Own Savings ToCover ExpensesEvery Day Until 2030, 10k Baby Boomers Will Turn 65And 7 Out Of 10 Will Require LTC At Some PointTakes An Incredible Emotional Toll On Family MembersThe Cost - Median Annual Cost In Maine2Existing SolutionsPrivate Nursing Home Room - 127kMedicare & Medicaid Only Provide Partial CoverageAssisted Living Facility - 71kPartnership Program Encourages LTC PlanningIn-Home Care (Home Health Aide) - 65kGenworth Remains Committed To The LTC MarketBoth To Current Policyholders & The Millions Of Americans That Don’t Have A Long-Term Care Solution Genworth Manages The Largest LTC Block In The Industry, Servicing Over 1 Million Policyholders AndManaging 46,000 Active And Pending Claims 4,300 Policyholders And 200 Claimants Are Maine Policyholders1USCensus Bureau 2014 National Population Projections. Accessed December 20202020 Cost of Care SurveyPolicyholder and claim data as of 12/31/20202Genworth, Maine LTC Public ForumDecember 20212
Key LTC IssuesAssumptions DidNot MaterializeAs ExpectedLapse Rates, Frequency Of Claim, Cost Of Claim, Length Of Claim & Investment Returns Are Some Of TheKey Assumptions Used In The Pricing Of LTC InsuranceActual Experience vs Every Major LTC Insurance Pricing Assumption Has Turned Out To Be UnfavorableTo Some DegreeSimilar To The Rest Of The Industry, Genworth Has Seen LTC Assumptions Play Out Differently ThanAnticipatedClaimsExperienceContinuing ToDevelopRelative To Most Other Lines Of Insurance, LTC Products Are More Recent Market Entrants (1970s) AndWere Priced Decades Before Experience Actually Developed, Relying On Similar Product ExperienceClaims Data Takes Decades To Develop And, As Experience Emerges, It Informs AssumptionDevelopment For Younger BlocksGenworth Has Seen Claim Experience More Than Double Since 2010 And Continues To Monitor ClaimsExperience And Make Adjustments To Assumptions When AppropriateRate Actions AreChallenging ButNecessaryGenerally, LTC Rate Increases Began In The Mid-2000s After Claim Experience Became More DefinitiveNAIC AndGenworthWorking OnSolutionsMultistate Review Subgroup Endorsed Two Methodologies. The Methodology Used By Maine Is NotConsistent With These MethodologiesGenworth Filed First LTC Premium Increase In 2007 And Then Subsequent Increases In 2010 & 2012. In2014, Developed A Detailed, Multi-Year Rate Action Plan (MYRAP)Genworth Participated In The Pilot Of The Multi-State Actuarial (MSA) LTC Rate Review Approach In 2020Reduced Benefit Options (RBO) Subgroup Established Guiding Principles In 2021: Genworth’sPolicyholder Communications Are In The Spirit Of All Principles & Guidelines & We Continue ToEnhance Our Processes. The Group’s Charge To Offer Benefits That Lessen The Likelihood Of A LTCEvent Aligns With Genworth’s Healthy Living InitiativesGenworth Is Engaged With The NAIC And Is Supportive Of Its WorkMaine LTC Public ForumDecember 20213
Summary Of Maine Inforce & Rate ActionsIssue Years In MainePolicy FormsPre-PCSPCS IPCS IIChoice IChoice II*Assoc 1992-201250000 et al50003 et al50020 et al50023 et al7003 et al7000 et al7020 et al7030 et al7031 et al7032 et al7035 et al7042 et al7044 et al7042 Rev et al7044 Rev et al7046 et al7050 et al7053 et alAARP 50 200 500 900 2,000 500130/56%178/126%147/112%142/99%122 - 141%104%Maine Inforce LivesRate IncreaseRequested(Lifetime/Limited)LifetimeLoss /73%56%0%Approvals Since 2007 Through 10/31/2021 (Lifetime Benefit / Limited Benefit Period) 400 Lives In Flex I & 7046 Group Products That Have No Pending Filings In Maine*Choice II Represents Three FilingsME Inforce Lives counts are provided as of the date of filingsLifetime Loss Ratios as included in filings (Without Pending Rate Increaseaverage of the three filingsMaine LTC Public ForumDecember 2021With Pending Rate Increase); Choice II includes Moderately Adverse Experience (MAE) and is a weighted4
Genworth’s LTC PositionKeeping OurPromisesCOVID-19Genworth Has Continued To Deliver On LTC Promises Over 22 Billion In LTC Benefits HaveBeen Paid, With 2.1 Billion In Benefits Being Paid In 2020Genworth Continues To Monitor COVID-19 ImpactsAt This Time, Not Making Any Assumption Changes To Reflect Impacts From COVID-19GLIC* Is BeingManaged As AMutualEvery Improvement Goes To The Benefit Of PolicyholdersSignificantProgress In RiskManagementGLIC Has Made Significant Progress Toward Improving The Overall Risk Profile Of TheCompany, Addressing Adverse Experience, Enhancing The Customer Experience & ImprovingThe Company’s Claims Paying AbilityMonitoring Legal Settlement’s Impacts To LTC Inforce BlockPolicyholders AreTop Of MindGenworth Will Continue To Offer A Wide Range Of Options & Educational Tools To SupportSound Decision Making For Each Unique Individual* Genworth Life Insurance CompanyMaine LTC Public ForumDecember 20215
LTC Initiatives For PolicyholdersCurrent Options Available For PolicyholdersKeep Your Current Coverage AndPay The Full Premium IncreaseAdjust Your Coverage Reducing Benefit OptionsPay Nothing More Optional Limited Benefit Reduce Daily/Monthly/Lifetime Benefit Reduce Benefit Period Reduce/Eliminate Benefit IncreaseOption (BIO) Increase Elimination Period Eliminate Policy Riders Customized Quotes ConsideringPartnership StatusContinuing To Develop A Wide Range Of Options & Educational Tools For PolicyholdersAlternativesOffering Current Options AndDeveloping New Options That ProvideMeaningful Coverage At Reduced CostWith Premium GuaranteesCareManagementPromote Healthy Living, Efficient UseOf Benefits and Care, ReduceLikelihood & Severity Of Claims &Enable Most Efficient Use Of CareEducationPlanned 2022 Launch Of The CoverageNeeds Estimator: A Dynamic Tool ForPolicyholders To Compare LTCBenefits To Estimated Care CostsCustomerServiceEnhanced Training & AgentEngagement To Support PolicyholdersAs They Reassess Care NeedsMaine LTC Public ForumDecember 20216
Overview Of Policyholder AlternativesStable Premium Option (SPO): PCS II & Choice I 3 Year Benefit Period With Median Benefit Pool1 Of 376k( 320k For PCS II) Retention Of Increased Daily Benefit Continued GrowthAt 1% Option Of Longer Elimination Period Or Coinsurance Rate Guarantee Until 2028Flexible Benefit Option (FBO): Choice II Indemnity Payment That Varies By SitusFixed Benefit Pool: 250k Individual / 400k SharedOption Of 1% Benefit Pool Increase Going ForwardElimination Period: 180 Day Facility / 90 Day Home CareRate Guarantee Until 2025Approved For Choice I In 2018Filed For PCS II In 2021Filed For Choice II In 2021Policyholder ImpactsConsiderably Smaller Impacts Than Planned Rate ActionsProvides Meaningful Coverage (7580% Of LTC Events Cost 250k)3Tested Favorably In ConsumerResearch (Early Experience ForSPO Shows 10% Of PolicyholdersElecting)One Set Of Nationwide PricingMitigates Concerns Over Cross-StateSubsidization1AsOf 12/31/2020;2SPOKey Policyholder Impact Metrics2FBOChoice IPCS IIChoice IIMedian Impact Compared To Current Premium(Maine)64%25%(10%) w/o 1% Growth;10% with 1% GrowthMedian Impact Compared To Filed & PlannedFuture Rate Increases (Maine)(52%)(41%)(50%) w/o 1% Growth;(39%) with 1% GrowthReflects all rate increases approved and implemented through 12/31/2020;3PwC 2016 Cost Of Formal Long Term Care StudyAlternative Options Provide Policyholders Meaningful Benefit Coverage With Premium GuaranteesMaine LTC Public ForumDecember 20217
Policyholder Communications / ServiceConsumer Website ProvidesInformation About‒ Why Premium Increases Are Needed‒ Policyholder Options‒ The Value Of LTC CoverageGenworth.com/LTCpremiumsPolicyholders Can Also View AndSelect Coverage Options* Online ByLogging Into Their MyGenworthAccount* As shown on their premium increase notificationMaine LTC Public ForumDecember 20218
SummarySeeking, And Will Continue To Seek, Actuarially Justified LTC Premium Increases To ReduceThe Amount Of Future Losses And To Ensure All Future Claims Can Be PaidImplementing Premium Rate Increases In A Reasonable And Responsible MannerWill Continue To Offer A Variety Of Options For Policyholders Including Alternative Options To Help Policyholders Mitigate The Impact Of Premium Rate Increases Educational Tools To Help Policyholders Make Informed Decisions Care Management Initiatives To Promote Healthy Living Dedicated Customer Service To Support PolicyholdersThank YouMaine LTC Public ForumDecember 20219
In-Home Care (Home Health Aide) - 65k 1US Census Bureau 2014 National Population Projections. Accessed December 2020 2Genworth, 2020 Cost of Care Survey Policyholder and claim data as of 12/31/2020 Industry Overview LTC Is A Critical & Growing Need Genworth Remains Committed To The LTC Market Maine LTC Public Forum December 2021
