BC Partners invests in Davies to support global expansion and digital transformation

LONDON, UK – 16th March 2021 – Funds advised by BC Partners, a leading international investment firm, have announced today that they have signed a definitive agreement to acquire a majority stake in Davies, the leading specialist professional services and technology business serving the global insurance market. Terms of the transaction were not disclosed.

Davies delivers professional services and technology solutions across the risk and insurance value chain, including claims, underwriting, distribution, regulation, customer experience, human capital, digital transformation and change management. It currently employs over 4,000 people supporting more than 800 clients around the world, and in recent years has expanded into new markets including Bermuda, Canada and the US. Through a combination of organic growth and strategic acquisitions, the firm has increased its annual proforma revenues six-fold over the last 4-years, to more than £350 million and Davies has been recognised as one of the UK’s fastest growing international businesses for two consecutive years.

This new partnership will diversify and strengthen Davies shareholder base, as it seeks to drive further global expansion, increase investment in technology and digital transformation, and to continue to partner with complementary businesses via M&A.  Existing investors HGGC and AIMCo will continue to hold minority ownership stakes in the business, alongside the Davies leadership team and employees.  BC Partners will also have representation on the Board.

Cédric Dubourdieu, Partner at BC Partners, said: “We at BC have been watching Davies’ progression over the past few years with keen interest, as this was a business we knew had serious potential. Over this period it has expanded geographically, successfully entering and establishing a presence in the US, Canadian and Bermudian markets, completed more than 30 acquisitions, diversified its service offering and cemented its position as a clear leader in its sector – all whilst upholding its reputation for providing excellent service to its customers.”

“We‘re very excited about the opportunity to work with Dan and the broader Davies team to build on this momentum, using our global network and sector expertise to support further growth through technology-enabled transformation and further penetration into the US and European markets.”

Dan Saulter, Group CEO of Davies said: “We are excited to welcome BC Partners as a majority investor as we embark on this next phase of international growth and technology investment.  I am also pleased that both HGGC and AIMCo wish to continue to invest in Davies alongside BC Partners.  I am proud of what the team has achieved, and this transaction will mean that our employee ownership programme, the Davies Incentive Plan, will pay out to eligible colleagues for a second time, reflecting the huge role they play every day in serving our 800+ insurance and highly regulated clients around the world.”

James Ridout, Director of AIMCo added: “It’s been great to partner with Dan and the team at Davies since 2019, during which time they have tripled the size of the business, added legal solutions to the platform, and launched claims solutions in the US.  As long-term investors, on behalf of our clients, AIMCo is thrilled to be continuing to back the team, and we look forward to supporting the next phase of growth and digital transformation.”

John Block, Partner of HGGC added: “The amazing growth Davies has achieved since our initial investment in 2017 has been inspiring to see. Dan and the leadership team’s commitment to maintaining a culture of accountability and transparency with a focus on value creation provides a great foundation for continual business expansion. Following our partnership model, we look forward to an ongoing role in Davies’ success alongside BC Partners and AIMCo.”

The BC Funds were advised by Waller Helms Advisors and Macquarie Capital (financial advisers), Linklaters LLP (legal adviser) and PwC (commercial, financial and tax adviser).

Management were advised by Liberty Corporate Finance (financial advisers) and Osborne Clarke (legal advisers).

HGGC was advised by Kirkland & Ellis (legal advisors) and AIMCo was advised by Allen & Overy (legal advisors).

The transaction is subject to receipt of customary regulatory approvals and is expected to close during the second quarter of 2021.

Davies expands Life & Health claims capabilities in the US with acquisition of Disability Management Services, Inc.

LONDON, UK – 7 January 2021 – Davies, the leading specialist professional services and technology business, serving the insurance and wider highly regulated markets, today announces the acquisition of Disability Management Services, Inc. (“DMS”), the Massachusetts, US based disability claims and insurance services third party administrator (“TPA”). DMS provides claims, policy administration and consulting services to the disability insurance market.

Earlier this year Davies deepened its claims administration offering to include long-term care solutions through the acquisition of TriPlus, which joined the firm’s existing Claims Solutions US arm. The acquisition of DMS further broadens Davies’ offering into the Life and Health insurance space, adding disability insurance domain expertise, along with 180 new specialist colleagues, who all join Davies.

The additions of TriPlus and DMS together establishes Davies as a leader in life & health claims administration in the US.  DMS COO Steve Miller will replace current CEO and founder Bob Bonsall who will retire upon completion of the transaction.  Miller will report to Davies’ US Life & Health CEO, Peter Lucas.

Davies has established and expanded its operations in the US through a combination of strong organic and M&A growth, with the firm now boasting claims capability spanning both the Property & Casualty and the Life & Health insurance markets.  Davies’ offering in the US includes a full range of TPA and loss adjusting solutions across all 50 states, as well as captive management and auditing solutions.

Globally, Davies has more than 4,000 colleagues, with operating centres across the UK, Ireland, Bermuda, the US and Canada.  The business delivers professional services and technology solutions across the risk and insurance value chain, including excellence in claims, underwriting, distribution, regulation, customer experience, human capital, digital transformation & change management.

Dan Saulter, Group CEO, Davies commented: “It’s exciting that we have been able to bring DMS and Davies together and I am delighted to welcome DMS’ leadership team, along with the company’s broader workforce to our business. Building our Life & Health claims capability in the US is a strategic focus and a growing market.  DMS has an excellent reputation, with strong client relationships, and an ethos for great service delivery, all of which provides for close alignment with TriPlus and our wider Davies operations.”

He added: “Looking to 2021, our US and Bermuda operations now represent around a quarter of our global operations.  Investing in the US remains a core part of our growth strategy.  We will continue to push for organic growth, as well as working with like-minded businesses via M&A to ensure we can deliver for our 750+ global insurance and highly regulated clients.”

Bob Bonsall, DMS added: “I am very pleased that DMS is joining forces with an organization that is committed to growth and innovation in the Life & Health insurance market in the US.  Davies’ history of investing in people and technology, along with a commitment to always put the interests of clients first, aligns well with the values upon which DMS has been built.  The cultural fit with Davies was an important factor as we planned for our company’s future and I believe the combination with Davies will present DMS employees more career development opportunities and an exciting future as the company continues to grow.”

Davies announces acquisition of TriPlus as it steps-up North American expansion plans

LONDON, UK – 21 September 2020 – Davies, the leading specialist professional services and technology business, today announces the acquisition of TriPlus Services, Inc., the long term care insurance third party administrator (“TPA”), based in Massachusetts, US. TriPlus provides its long term care carrier clients with claims and policy administration management solutions as well as actuarial and claims consulting.

Under the deal TriPlus will join Davies already established Claims Solutions US business, creating a new Life & Health segment. Peter Lucas, CEO of TriPlus will continue to lead the business and report to US Claims Solutions CEO, Matt Button. All 200+ TriPlus employees will continue in their roles as Davies’ employees.

In September 2019 Davies announced its first major US deal with the acquisition of Frontier Adjusters, Inc, the multi-line independent claims adjusting provider, serving all 50 US states; closely followed in October 2019 by Alternative Service Concepts LLC, the workers’ compensation and property and casualty TPA; enabling the group to provide its insurance clients with multi-line claims solutions in the US and Canada, in addition to its established operations in the UK and Ireland.

The deal marks Davies fifth acquisition of 2020, following the acquisition of: Keoghs, the insurance-focused, top-50 law firm, which was announced in January and completed earlier in March, Codebase8 the automation and digital solutions provider to the insurance and other highly regulated markets, Citadel & Cedar Consulting the captive management & consulting businesses, & ContactPartners the specialist cloud application provider, delivering bespoke customer contact technologies.

Globally Davies has more than 4,000 colleagues, with operating centres across the UK, Ireland, Bermuda, the US and Canada. The business delivers professional services and technology solutions across the risk and insurance value chain, including excellence in claims, underwriting, distribution, regulation, customer experience, human capital, digital transformation & change management.

Dan Saulter, Group CEO, Davies commented: “I’m thrilled that the TriPlus team have decided to join Davies and partner with us as we look to grow our Claims Solutions business in the US and broaden the range of services we can provide to our clients. TriPlus has an excellent reputation and their client service focused culture is closely aligned with ours.”  He added: “Extending and growing our operations in the US is a core part of our strategy; and we plan to continue developing our capabilities in the US both in our claims areas, but also more widely across our other core competencies.”

Peter Lucas, CEO, TriPlus added: “The leadership team and I are delighted to be joining forces with Davies and to be part of their ambitious growth plans in the US. We look forward to working together to continue to deliver for our clients, and being able to offer a deeper range of specialist skills to Davies wider client base.”

About TriPlus Services, Inc.

TriPlus is a provider of full-service insurance management solutions with a focus on the Long Term Care market. Headquartered in Hopkinton, MA, and with operations at locations throughout the United States, TriPlus provides comprehensive administration support and targeted services in: policyholder administration, claim management/payment and actuarial services including end-to-end rate increase support.

About Davies

Davies is a multi-award winning specialist professional services and technology business.  Davies delivers operations, consulting and technology solutions across the risk and insurance value chain, including excellence in claims, underwriting, distribution, regulation, customer experience, human capital, transformation & change management. Davies’ core service lines include: Claims Solutions, Legal Solutions, Insurance Services and Consulting & Technology. Davies has a 3,750 strong team of professionals across the UK, Ireland, Bermuda, the US and Canada with headquarters in the City of London.  Davies’ investors are HGGC, AIMCo (acting on behalf of certain of its clients), and Davies’ employees following HGGC’s majority investment in January 2017 and AIMCo’s minority investment in January 2019. Davies’ programme of digital transformation has seen it successfully launch a range of technology-led solutions in to its insurance and highly regulated markets, including the use of video, drones, robotics and its “Disruptive Thinking” innovation lab that places the power of new ideas in the hands of its people. Over recent years Davies has consistently delivered double-digit organic growth through a combination of growing its solutions with existing clients and adding new partnerships to its business. In the past year Davies has added more than 150  new accounts to its organic platform. In addition Davies has successfully broadened and deepened its operations and digital capabilities via targeted acquisitions. Since the start of 2017 Davies has acquired: Cynergie, CMSL, Ambant, ServiceTick, TLSS, R&Q’s insurance services business, Ember, Direct Group’s claims businesses, Veriphy, USA Risk Group, TMS, GBB, Banwells, Frontier, FWD, ASC, Thornton Group, Keoghs, Codebase8, Citadel & Cedar Consulting, ContactPartners & TriPlus. More information is available at www.davies-group.com.

About HGGC

HGGC is a leading middle-market private equity firm with $4.3 billion in cumulative capital commitments. Based in Palo Alto, Calif., HGGC is distinguished by its Advantaged Investing approach that enables the firm to source and acquire scalable businesses through partnerships with management teams, founders and sponsors who reinvest alongside HGGC, creating a strong alignment of interests. Over its history, HGGC has completed more than 130 platform investments, add-on acquisitions, recapitalizations and liquidity events with an aggregate transaction value of nearly $22 billion. More information, including a complete list of current and former portfolio companies is available at www.hggc.com.

About Alberta Investment Management Corporation (“AIMCo”)

AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than C$115 billion of assets under management. AIMCo was established on January 1, 2008 with a mandate to provide superior long-term investment results for its clients. AIMCo operates at arms-length from the Government of Alberta and invests globally on behalf of 31 pension, endowment and government funds in the Province of Alberta. AIMCo’s head office is located in Edmonton, Alberta, with additional offices located in Toronto, London, and Luxembourg. AIMCo’s Private Equity team comprises a dedicated group of experienced investment professionals and manages a private equity allocation of approximately C$6.0 billion. More information is available at www.aimco.alberta.ca.

Media Contact:
Paris Baker, Head of Group Communications, Davies
Tel: +44 7500 781175
Email: paris.baker@davies-group.com

TriPlus Services, Inc. to Administer Penn Treaty Long Term Care Business

Hopkinton, MA. – (October 2019) – TriPlus Services, Inc. (TriPlus), a Third Party Administrator (TPA) specializing in the long term care line of business, announces the award by the National Organization of Life & Health Insurance Guaranty Associations (NOLHGA) and LTC Reinsurance PCC (LTC Re) of the contract to administer the Penn Treaty Network America Insurance Company (PTNA) and American Network Insurance Company (ANIC) policies protected by 48 state life and health insurance guaranty associations.

In conjunction with this servicing agreement, TriPlus Services, Inc. reached agreement with the PTNA estate to acquire certain assets to ensure a smooth service transition. More than 100 employees will become immediate TriPlus associates, with an additional group to follow on January 1, 2020 thus offering continuous employment to most of the current workforce. All employees will remain in their current Allentown facility.

The arrangement includes accounting services and all functions related to policyholder and claims services. “We are honored that NOLHGA and LTC Re selected us to administer this business on behalf of the Guaranty Associations,” said TriPlus C.E.O. Peter Paul Lucas. “This contract is a significant milestone in our growth and a reflection of our commitment to the long term care market and represents the culmination of a collaborative effort by NOLHGA, LTC Re and TriPlus. We look forward to providing the PTNA and ANIC policyholders the best service experience, and we welcome our new associates to TriPlus.”

TriPlus began servicing these blocks on October 1, 2019.

Peter Gallanis, President of NOLHGA, which coordinates the life and health insurance state guaranty associations’ activities in the PTNA and ANIC insolvencies, noted, “TriPlus brings its extensive experience and expertise managing complex LTC businesses and its track record of successful implementations to this important venture. We have spent considerable time preparing for this service transition to ensure that we will fully honor the statutory commitments of our member guaranty associations.”

Eric Rangen, President of LTC Re, which jointly managed the selection process with NOLHGA, added, “It was critical to us that the chosen TPA have the skills and resources to support the PTNA and ANIC policyholders, and the technology and platform to ensure they receive uninterrupted, efficient service. Having thoroughly reviewed the LTC administrative market, we are confident that TriPlus is the right choice.”

About TriPlus Services, Inc.

TriPlus is a provider of full-service insurance management solutions with a focus on the Long Term Care market. Headquartered in Hopkinton, MA, and with operations at locations throughout the United States, TriPlus provides comprehensive administration support and targeted services in: policyholder administration, claim management/payment and actuarial services including end-to-end rate increase support.

About NOLHGA/State Guaranty Associations

The National Organization of Life & Health Insurance Guaranty Associations (NOLHGA) is a voluntary association made up of the life and health insurance guaranty associations of the 50 states and the District of Columbia. State guaranty associations provide coverage (up to the limits set forth in state law) for resident policyholders of insurers that have become insolvent and are licensed to do business in their states. NOLHGA assists its member associations in quickly and cost-effectively providing coverage to policyholders in the event of a multi-state life or health insurer insolvency. http://www.nolhga.com/.

About LTC Re

LTC Re is a protected cell captive insurance company organized under the laws of the District of Columbia. LTC Re was formed by NOLHGA on behalf of the life and health insurance guaranty associations that elected to participate in a reinsurance agreement with one or both of the Protected Cells of LTC Re, in accordance with NOLHGA’s participation procedures, to serve as the vehicle to coordinate the efficient and effective discharge of the statutory obligations of such guaranty associations.

Rate Increase Approaches Impact LTC Policyholder Behavior

By Raymond Nelson, ASA, MAAA

(Originally published in The Society of Actuaries’ Long-Term Care News, Issue 46, December 2017, accessible at https://www.soa.org/Library/Newsletters/Long-Term-Care/2017/december/ltc-2017-iss46.pdf )

Premium increases on in-force long-term care (LTC) insurance policies have been a minefield for the LTC industry for nearly the past 20 years. As a company that works closely with LTC insurers, state insurance departments and policyholders, we understand the difficulties that LTC rate increases impose on all parties involved. Rate increases are hard on everyone involved:

  • The policyholder bears the heaviest burden. Often at an advanced age, the policyholder is forced to make difficult choices between paying the higher premiums or accepting reduced benefits in order to mitigate the premium increase.
  • The companies spend an enormous amount of time and resources to coordinate a very complicated, labor-intensive effort that involves many departments/personnel/communications and can last several years from start to finish.
  • And finally the state regulator needs to evaluate the actuarial justifications of the requested increase, consider the financial/solvency needs of the company, while yet protecting the consumer insureds (and field complaints from all parties throughout the process).
    Our experience has been that most everyone involved with rate increases at the companies and states have been doing their absolute best to help policyholders through these difficult but necessary rate increases. There have been great improvements in the information and communications provided to policyholders at the time of rate increases. Companies have worked hard to improve on the availability of meaningful benefit modification options, as well as the ability to communicate individual customized alternatives within the premium increase notifications.

The landscape surrounding LTC insurance premium increases has been continuously evolving since such inforce rate increases became more commonplace in the early 2000s. Many aspects of LTC rate increases have changed in recent years.

For example, in the beginning, insurers generally pursued rate increases with a simplified, straight-forward structure that requested a level increase percentage across all in-force policies. Now many insurers take a more targeted approach to premium rate increases. Often higher rate increase percentages are requested for plan designs or issue ages that are impacted most by the changes in experience and assumptions that are driving the needs for the increase. In turn, smaller increase percentages, (or even no increases at all), are requested in other segments of the block that are not impacted as greatly by changing assumptions. Evolution in the area of LTC rate increases has not been limited to insurance companies. State insurance department regulators are placed in the very difficult position of balancing the financial/solvency needs of the insurer while still providing meaningful consumer protections to LTC policyholders. In walking this fine line, several state insurance departments have also modified their approaches to reviewing company rate increase filings and seemingly their philosophies with regards to rate increase approvals in recent years.

State Approaches
As more legacy LTC blocks have encountered the need for sizable rate increases, there has seemingly been some evolution of state regulatory approaches when reviewing medium to large LTC rate increase requests. For a long time, it seemed as though most states fell into one of two categories when reviewing such filings. The first category consists of states that would review such filings and, provided the state was satisfied the requested increase was actuarially justified, would ultimately approve the entire requested increase. The second category would be those states that would perform similar reviews of the filings, but would generally attempt to protect consumers from larger rate increases by limiting the company to an increase that was smaller, (sometimes significantly so), than requested. In most cases, these states would request that the insurer pursue the remainder of the increase at a later date (usually one year). This resulted in more frequent, but smaller, rate increases for policyholders in these states. It is important to note that states approving the entire rate increases were trying just as hard to protect policyholders as the states limiting the increases. States approving the full increases believe that although the larger increase is painful for policyholders, in the long run the policyholders is better off to be aware of the full increase so they can best manage their decisions around paying the higher premiums versus modifying coverage. In recent years, a subset of states has taken a hybrid approach that somewhat blends the philosophies previously discussed.

In an effort to limit the one-time impact to policyholder premiums, yet provide the policyholder with more complete information about upcoming rate increases, there are now several states that will approve a rate increase but ask the insurer to phase-in the increase to policyholders over a selected number of years. The entire rate increase schedule of the current and future premium changes is communicated to the policyholder during the rate increase notification process. The intent is that policyholders are well informed of the entire rate increase amount, yet receive some protection from having their premiums increase by very large amounts all at one time. Having seen these different approaches for some time now, I was curious what, if any, impact would the different rate increase philosophies have on policyholder behavior. Do policyholders accept rate increases, or modify coverage and premiums, in a similar manner when the rate increase is approved and implemented differently? Does the level and timing of rate increase approvals drive different behaviors? Can we conclude anything about the level of consumer protection that is ultimately provided with these approaches?

We have been able to view the rate increase approval experience and monitor policyholder activity for a particular LTC block’s recent medium to large size rate increase in an effort to look at such impacts. This block began the filing and implementation of the national rate increase about four years ago. Although there is still some ongoing implementation activity, the vast majority of the block has received all or part of the increase that was initially filed (roughly 94 percent of the filed increase is now approved). In general, policyholders fell into one of the three state categories previous described:

  • Entire rate increase was approved and implemented at one time.
  • Entire rate increase was approved, but implementation was in a scheduled series (usually two or three steps) with the policyholder informed of entire series of increases at each communication.
  • Smaller increase was approved, requiring one or more catch-up filings, policyholder only able to be informed about the approved partial increase at each step.

A similar number of policies fell into each of the above categories, with each category containing at least 7,500 impacted insureds.

Results and Observations
In general, policyholder reactions to the rate increase studied here have varied based upon the category of state approval as previously described. Table 1 shows that policyholders receiving a one-time approval of the entire rate increase and those receiving notification of the entire series of rate increases have modified coverage, (either by modifying benefits or by accepting contingent nonforfeiture), at a slightly higher ultimate rate than those policyholders receiving only partial rate increase notifications.

Table 1:  Percentages of Policyholders Choosing to Modify Coverage by State Approval Category (1,2,3)

It is interesting to note that policyholder reactions to larger onetime rate increases appear to be substantially similar, (in terms of the total percentages that modify coverage in one form or another), to those receiving the pre-approved, reduced increases that are spread-out over two or three years. However, slightly more of the coverage modifications for one-time approvals were in the form of accepting contingent nonforfeiture benefits than was true in the case of the pre-approved series.

One interesting contrast in the data is shown when looking at the results for states in the latter two categories broken down by round/step of the rate increase mailings. For states that approved the entire rate increase via a series, which allows for communication of the entire series to the policyholder, Table 2 illustrates the breakdowns of policyholder reactions both in total (as a percentage of initial notification mailings) and then by each individual step (as a percentage of the notifications that occurred in the individual step).

Table 2:  Pre-Approved Series of Increases: Coverage Modifications by Series Step

As one might expect, policyholders that were shown the multi-step increase were much more likely to make a coverage modification early in the process. Table 3 shows a similar breakdown of data, in total and by round, for policyholders in states where only Partial Approvals have been granted and passed along to the policyholder, and the company pursues catch-up increases in additional rounds.

Table 3:  Partial Approval States: Coverage Modifications by Series Round

The data shows that while the ultimate percentages of policyholders modifying coverages was roughly similar between these two groups of states, the pattern of when the modifications occurred was meaningfully different. When policyholders were aware of the entire series of the rate increase, they were 82% more likely to modify coverage in Step 1 versus Step 2 (18.9 percent versus 10.4 percent). In Partial Approval states, policyholders were only 13 percent more likely to modify coverage in Round 1 versus Round 2 (16.0 percent versus 14.1 percent). In general it would seem that if policyholders are going to make benefit modifications in the short term, it would likely be in their best interest to make such modifications sooner in order to save on premium dollars over this period. One could even conclude that the one-time larger rate increase results in the best outcome for policyholders that ultimately modify benefits, as it appears to cause policyholders to make their modifications right away, and hence save on premiums they would pay in the next year or two before making the modifications that are done after step/round 1 in the other state categories.

The data shown here may also be considered by some companies with older, pre-rate stability blocks that are still in need of rate increases. Companies in this situation will sometimes forgo a larger rate increase with the plan being to file for a series of two or three smaller increases. The data appears to show that roughly the same percentage of policyholders will ultimately elect to modify coverage regardless of the pattern of increases. Therefore, it appears to be in the best interest of the policyholders who will modify coverage, to have their company file the full increase initially so these policyholders can make their coverage choices/changes at an earlier stage.

The results presented for this case study are likely to vary from block to block, and company to company, and in particular based upon the magnitude of the rate increase and policyholder demographics. However it is reasonable to assume that similar patterns of results and variances by state category would occur for other rate increases of other blocks.

The data shows that when a rate increase is approved in smaller, separate steps, policyholders do change behavior, which is not necessarily in their best interest. Decisions on benefit modifications are generally made at the same rate, but the decisions are deferred to later steps meaning these policyholders pay additional premiums in the interim years for benefits that will later be reduced/modified. In other words, policyholders who receive the most information about their ultimate rate increase upfront are better served in the long run by being able to make informed, and earlier, decisions in regards to their LTC coverage and premiums.

In addition, there are significant inefficiencies for both the companies and regulators when multiple smaller rate increase filings are required to obtain the needed result. Companies must prepare multiple filings and pursue multiple implementations/ communications with policyholders, while state regulators also must perform multiple rate filing reviews.

Last but not least, delaying necessary rate increases can hurt the financial solvency of LTC insurers in the short term and may lead to larger cumulative increases for policyholders in the long term. Both of which are detriments to protecting LTC policyholders.

1 The percentages in the two state categories where multiple increase mailings are required are measured as total policy changes from any round/step in the rate increase process divided by the number of mailings made in round one of the process.
2 In order to better account for the fact that policyholders in One-Time Approval states have experienced the entire rate increase, but some policyholders in the other categories have not yet done so, we have excluded data from a few states that are less complete in the implementation process (particularly those in Partial Approval states where catch-up increases are still being pursued and the policyholders have incurred only a portion of the increase).
3 The details and makeup of the particular LTC block studied yielded contingent nonforfeiture benefits that were generally more attractive than what might be seen in many other LTC blocks which likely elevated the frequency of this particular election.

To Build or To Buy: What to Ask When Considering Outsourcing Your LTC Block

The Decision to Outsource Can be Difficult to Navigate

Hundreds of times a day – consciously and unconsciously – we make decisions about how we spend our time and money.  Should I spend every Saturday in the summer mowing the lawn?  Should I paint my house myself? Should I dig out my own driveway after a major nor’easter?

But more importantly: can anyone care for my house the way I do?

When you think about outsourcing the administration of your long-term care insurance block, what holds you back?  Do you think no one else can manage it for the same costs – or less – than you do?  Are you concerned that no one can do the work as well as your own employees?  Are you worried that switching administrative platforms will be complicated and painful?

Ultimately, do you believe that no one can care for and manage your block as much as you do?

How can you find a partner that answers all these questions correctly, and who has walked in your shoes and understands the unique challenges you face both strategically and tactically?

Long-term Care Insurance Administration is Complex

As most in the industry are well aware, long-term care insurance is different from other insurance products in virtually every aspect.  The promise is long, and the unknown factors that impacted the adequacy of pricing decades ago continue to destabilize the financial health of reserves.  In addition, LTC is highly regulated, and those regulations vary from state to state.  Subtle variations and disparities in policy language, particularly in older series, can present unforeseen litigation risk.

To further complicate matters, if you are overseeing a closed block, the chances are you are having issues attracting and retaining the talent you need.  Your claims and litigation risks are rising, but your premium revenue is not.  The policyholder base is shrinking while claims are growing, underscoring the need for skilled and experienced adjudication and payment resources.

How can you be sure that a potential administrative partner is qualified and equipped to administer your block, and understands the intricate nuances of LTC?

Meaningful Information is Critical to Manage Risk

Many carriers administer their LTC blocks on multiple, disconnected legacy systems, or a system originally designed for life insurance, retrofitted for LTC. There is little appetite, incentive, or funding to invest in LTC-specific technology.  A key advantage of outsourcing is that the TPA makes the investment in the technology and talent needed to integrate and manage your block’s data – facilitating administration and providing you important insights on your block.

How can you assess whether a TPA offers technological expertise that both reduces your risk and enhances your customers’ experience?

Finding the Right Team for the Job is Key

The right administrative partner can help provide you with the time and capacity to concentrate on your core business priorities and competencies, and to focus on future opportunities.  Administration is, by definition, a process-focused endeavor.  What differentiates the right partner is a focus on outcomes not just process.

How can you evaluate whether an insurance administrator has the flexibility to become an extension of your organization, and the subject matter expertise in LTC insurance to help manage the risk?

Ask the Tough Questions!

If you are considering outsourcing, it is critical to find the right partner.  Here are some questions to ask that can help you make the decision:

How important am I to you?

Am I a small fish in a large pond, and will I receive the focus and attention that managing my block requires?

Can I depend on predictable and fair pricing?  

It’s important to clarify what is included in pricing, and whether there will be additional, unexpected fees in the future.

What will you do to make switching platforms as painless as possible?

Can I talk to other carriers who have experienced your transition process?

What is your track record for meeting important deadlines?  

Accomplishing key deliverables, such as initial transition and rate increase implementation, on time and on budget is critical to your business.  What is your history with these large projects?

Can you really manage my block as well as – or better – than I can?

In the end, it is really about the experience and expertise of the people who will be working with you, and whether they will care for your block as if it was their own.

Here at TriPlus, we believe that our experience, our technical capabilities, and our people uniquely position us to manage the complexities of your long-term care insurance business.  And we think we have the right answers to these questions.

Contact Us!
For more information on how TriPlus can help you achieve your business goals – while making your job easier – please contact:

Laura Moore, Chief Commercial Officer
(978) 699-3206