Resource Center

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
lmoore@tri-plus.net