Norwich Union is joining the list of companies looking to get out of the pre-funded long-term care market but Bupa has stressed it is committed to the pre-funded market but is getting out of immediate needs.
NU is closing its flexible protection bond to new business from November 24, leaving it with only an insurance product in the pre-funded market. Its move follows Axa's long-term-care arm Lifetime Care's planned withdrawal from the pre-funded market at the end of the year.
Bupa says it will close to new immediate needs business from December 1 in light of forthcoming regulation. But it believes the pre-funded market offers potential, particularly given the withdrawal of state support and the growing recognition that people need to fund their own care.
NU retirement market manager Dean Critchfield says: “The long-term-care bond market is small and has reduced over the past couple of years due to stockmarket performance. Consumer demand has declined and therefore it is not commercially viable to incur the costs of developing and maintaining this product line.”
Bupa UK director of sales and distribution Steve Flanagan says: “We are supportive of any moves towards regulation and control of the sector to protect the consumer but this will affect costs for immediate needs long-term care which are very price-sensitive and capital-intensive.”
Care Funding Bureau head Owain Wright says: “I have no idea what Bupa are thinking of. When PPP pulled out I was a little bit shocked but not entirely surprised as the figures pointed that way. For Bupa to fly in the face of the figures seems unusual.”