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NU pulls out of LTC

Advisers say there will still be a strong market in the long term

Norwich Union is pulling out of the long-term care market, blaming falling sales and the high costs of providing quotes.

The latest blow to the market leaves only three providers active in LTC – GE Life, Axa and Partnership Assurance.

NU, which had been in the LTC market for 10 years, will continue to service its existing book of business on its immediate care plan but will not take on new business after November 20.

In the 1990s, NU was one of the pioneers of LTC insurance under the direction of Sandy Johnstone, who is now an LTC consultant.

Head of annuities Scott Brown says: “The growth that we were anticipating in this market has not been realised over the last few years, meaning that it is no longer commercially viable to incur the cost of this product.”

Nursing Home Fees Association managing director Phil Spiers says this is short-termist as the potential of the market has yet to be exploited. He says: “I do not think NU realise the potential of the market. We estimate advisers are only reaching about 4 per cent of the potential market at the moment.”

Long-term care specialist Symponia is playing down the impact of NU’s withdrawal. Managing director Jeremy Davies says: “Norwich Union withdrawing is no loss to this market at all. Both its service and quotes are dreadful.”

Other providers believe that in the long term, there will still be a strong market.

Rival Partnership Assurance Chairman Ian Owen says: “Living longer but in poor health, coupled with a population spike created by the baby boomers moving through retirement, means there will be a growing care market.”

NU says: “Applications for immediate care plans received prior to close of business on October 13 will be accepted, provided they are accompanied by a new business illustration. All applications received by close of business on December 24 with a valid quote or requote will be honoured.”

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