TIDMPA.
RNS Number : 3773G
Partnership Assurance Group PLC
20 November 2015
20 November 2015
Partnership announces agreement with Genworth to launch
immediate need care annuity in US
Partnership Assurance Group plc ('Partnership') today announces
an agreement between its life company, Partnership Life Assurance
Company Ltd and Genworth Life Insurance Company ('Genworth') to
launch a medically underwritten immediate annuity, comparable to
Partnership's UK Care Annuity.
The agreement brings together the outstanding combination of
Genworth's strong distribution footprint and leading position in
the US Long Term Care ('LTC') Insurance market with Partnership's
intellectual property and expertise as the UK's leading provider of
care annuities. The product launch is planned for Q1 2016.
It is estimated that $45 billion is spent annually in the US by
individuals self-funding their care costs and fewer than 10% have
any form of insurance to meet such costs(1) . The product is
expected to address a clear unmet need in the US to help
individuals pay future care or other costs with a guaranteed income
for life.
Deal structure brings together complementary strengths of
Partnership and Genworth
-- The agreement brings together the complementary strengths of
each partner in a structure that has been designed to align the
interests of both parties
-- Genworth is an expert and market leader in LTC insurance
having written approximately 25% of US in-force LTC policies.(2)
The product will benefit from Genworth's brand, market-leading
expertise, existing operating platform and distribution capability
in the US
-- The business will be substantially reinsured into
Partnership's main UK life company, Partnership Life Assurance
Company Limited, with pricing based on Partnership's expert
understanding of longevity and Intellectual Property, which has
undergone testing to confirm its validity for use in the US
-- Assets backing Partnership's US liabilities will be managed
within mandates approved by the Partnership Board. Partnership's
existing investment management strategy will be applied across the
US business, with cashflows matched across the portfolio and USD
liabilities/cashflows expected to be matched by USD denominated
assets/cashflows
Steve Groves, CEO of Partnership, commented;
"I am delighted to announce that the journey we began in 2013 to
explore the global application of our leading Intellectual Property
has led to this agreement with a market leader for Long Term Care
insurance in the US. The potential for this product is very
significant; the market is huge and customers seeking to protect
themselves against the cost of care over a highly variable future
lifetime have limited alternative solutions at the point of need.
With data collected over the last 20 years in the UK, we are well
placed to help fulfil that need and pursue this opportunity and we
look forward to working with Genworth."
Tom McInerney, President and CEO of Genworth commented;
"Partnership's expertise in managing longevity risk complements
Genworth's strategic vision for leadership and stewardship within
the Long Term Care Insurance industry and we believe it helps solve
a clear unmet need in the US. As market leaders in our respective
domestic markets, Partnership and Genworth are natural partners
with shared and aligned objectives, which will allow us to bring
this product to the U.S. market for the benefit of customers and
their families."
Further information
Meaningful sales opportunities in the medium-long term supported
by strong structural growth drivers
It is estimated that $45 billion is spent annually in the US by
individuals self-funding their care costs. Fewer than 10% have any
form of insurance to meet such costs(1) , despite the fact that the
average annual cost of LTC in the US can range from $45,000 for
in-home care to $91,000 for a private room in a nursing home(3)
The US market is supported by strong structural growth drivers
including:
-- The number of people age 80 and over is expected to increase
from 11.6 million in 2012 to 19.5 million in 2030(4)
-- At least 70% of those over the age of 65 will require some
form of long term care services and support during their
lives(3)
-- 67% of adults over 40 have done little to no planning for LTC(5)
Proposition addresses an unmet need in the US
The medically underwritten immediate annuity provides a
guaranteed income for life through a single premium product, which
may be purchased at the point of entering a facility or requiring
care and can be used to help fund the costs of care or any other
living expenses as individuals age. Approximately 1 million (or 30%
of) existing facility care residents are estimated both to need and
be able to afford to purchase this guaranteed income for
life.(1)
A clear distinction exists between this immediate annuity
proposition and existing non-annuity US pre-funded LTC insurance
products. The majority of existing products are sold to healthy
individuals in their fifties and sixties to meet the potential
future costs of care they may have in later life. However, there
are limited alternatives currently available at the point of need
for individuals seeking a source of income to help offset the
potentially significant costs of care over an extended period.
The proposition has significant potential benefits for all key
stakeholders;
-- Individual is given security from a guaranteed income for
life and is able to manage their estate during their lifetime
-- Family are comforted knowing that their loved one has an
identifiable stream of annuity payments to provide financial
support
-- Care homes and facilities have certainty that the guaranteed
income is available to help pay ongoing fees
Approach to launch and distribution
-- The product has been filed by Genworth and approved in most
US states to support a launch in Q1 2016
-- A carefully managed and controlled roll out will be
undertaken with trained and licensed distribution, which is
expected to deliver a gradual build-up of sales
-- These annuities are relatively short duration (typically 3-4
years on average), which will allow experience to be refined,
learnings to be captured and capital to be recycled
Notes
About Genworth
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500
insurance holding company committed to helping families become more
financially secure, self-reliant and prepared for the future.
Genworth has leadership positions in mortgage insurance and long
term care insurance and product offerings in life insurance and
fixed annuities that assist consumers in solving their home
ownership, insurance and retirement needs. To help families start
"the talk" about their futures and long term care planning,
Genworth recently completed the first stage of its national #Lets
Talk Tour to encourage conversations and information sharing.
Headquartered in Richmond, Virginia, Genworth traces its roots back
to 1871 and became a public company in 2004. For more information,
visit genworth.com.
From time to time, Genworth releases important information via
postings on its corporate website. Accordingly, investors and other
interested parties are encouraged to enrol to receive automatic
email alerts and Really Simple Syndication (RSS) feeds regarding
new postings. Enrolment information is found under the "Investors"
section of genworth.com. From time to time, Genworth's publicly
traded subsidiaries, Genworth MI Canada Inc. and Genworth Mortgage
Insurance Australia Limited, separately release financial and other
information about their operations. This information can be found
at http://genworth.ca and http://www.genworth.com.au.
About Partnership
FTSE All-share insurer founded in 1995 as the UK's first
provider of individually underwritten annuities with a Premium
Listing on LSE since June 2013
Experts on the impact of health on life expectancy with unique
intellectual property comprising 20 years of proprietary medical
and mortality data
Market leader for individually underwritten care annuities in
the UK, with over 50% share of the UK market for the last 16
years
Sources
(1) Towers Watson Research for Partnership at November 2014
(2) LIMRA's "U.S. Individual Long Term Care Insurance Annual
Review 2014," published in 2015
(3) Genworth 2015 Cost of Care Survey, April 2015
(4) US Census Bureau 2012 and 2012 National Projections
(5) Kaiser Family Foundation August 2013
Enquiries:
Partnership
Investors Media
Katherine Jones Jim Boyd Citigate Dewe
Director of Investor Director of Corporate Rogerson
Relations Affairs Grant Ringshaw
+44 (0) 207 444 +44 (0) 207 618 +44 (0) 207
8040 2744 638 9571
katherine.jones@partnership.co.uk pressoffice@partnership.co.uk Shabham Bashir
+44 (0) 207
282 2822
Genworth
Investors Media
Amy Corbin Julie Westermann
Investor Relations Public Relations
1.804.662.2685 1.804.662.2423
amy.corbin@genworth.com julie.westermann@genworth.com
Further information
A copy of this announcement is available on Partnership's
website www.partnership-group.com
The financial information contained in this announcement has not
been audited or reviewed by the Group's auditors.
Forward looking statements
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