Important work happening at Milliman

LARA/wellness

Milliman recently completed a comprehensive validation study demonstrating that historical Long-term care Advanced Risk Analytics (LARA) risk scores provide statistically significant differentiation across key dimensions of long-term care claim experience. Analyzing over 240,000 observations spanning 2012–2018, the validation confirmed that LARA scores successfully predict when policyholders will need care, differentiate between claim severity levels, and identify which claims are likely to persist longer. The analysis showed that policyholders who died on claim had risk scores nearly twice as high as those who recovered, and that risk scores progressively increased in the years leading up to claim incurral. Additionally, the validation confirmed strong alignment between risk scores and claim approval decisions, with approved claims showing risk scores double those of denied claims. These findings demonstrate that LARA risk scores can provide LTC carriers with a reliable, objective tool to enhance decision-making across claims management and care management resource allocation. Reach out to Jeff Anderson or Juliet Spector for additional information.

Milliman holistic SAA/ALM optimization

Milliman is at the leading edge of insurance-focused strategic asset allocation (SAA), asset-liability management (ALM), and asset modeling. Our holistic, liability aware optimization framework combines advanced modeling with practical portfolio construction to align assets with long dated obligations. We continue to expand our toolkit with new analytics and practitioner focused research that translate complex market dynamics into implementable insights.

In collaboration with the Society of Actuaries (SOA) Research Institute, Milliman produced an educational primer on the growing role of complex assets in life and annuity portfolios. The work clarifies the structures and risk profiles of collateralized loan obligations (CLOs), asset-backed securities (ABS), and mortgage-backed securities (MBS)—demystifying multi tiered waterfalls and bespoke features—and shows how these instruments can enhance yield, diversify exposures, and better match liability profiles. It also provides a clear view of the trade offs, including liquidity, valuation, and regulatory capital considerations, to support disciplined, liability aware decision making.

We are actively engaging with multijurisdictional insurers across the United States, Bermuda, and the Cayman Islands to apply these insights, helping clients navigate evolving markets and meet long term promises with confidence.

On January 28, 2026, Milliman hosted a half day seminar in Bermuda, where our experts shared practical insights on SAA, ALM, and advanced asset modeling for (re)insurers. Designed to help companies strengthen balance sheet resilience, the session combined current market perspectives with implementation ready techniques. Highlights included:

• Liability aware SAA frameworks that align portfolios with long dated obligations
• Data driven analytics for effective balance sheet and surplus management
• Current trends and best practices in asset modeling across public and private markets
• Derivative strategies to enhance hedging, yield, and liquidity management

To explore how these approaches can be tailored to your company, please contact Fiona Ng.

Rate increases

While rate increases can be a difficult decision for companies, they can be a necessary lever to manage in-force business. Milliman continues to work with companies requesting premium rate increases on both open and closed blocks of standalone LTC. The recent December 2025 Multistate Actuarial (MSA) Framework adopted a single review methodology for regulators to consider, and Milliman has consulted clients on incorporating the framework into its filings and strategic initiatives.

Milliman has a variety of arrangements to help companies through the rate increase process, providing high-level strategic consulting, secondment services, or full support of assumption development, filing preparation, and response work.

Upcoming studies

LTC Guidelines

We are excited to dive into the significant amount of contributor data collected for the next iteration of the LTC Guidelines, which examine how post-COVID data is emerging across the market. We have added several additional contributors to our robust dataset and are building out the capabilities to offer clients additional insights into healthy life persistency and contingent nonforfeiture patterns, among others. If you would like to provide additional feedback to enhance the Guidelines, please reach out to us at [email protected].

Combination products

Hybrid products offering LTC or chronic illness riders to life or annuity products continue to grow in the marketplace, and we continue to collect data for Milliman’s next LTC Combination Product Experience Study. This is the largest study of its kind and helps participants benchmark their emerging experience against the industry. The study will evaluate incidence, claim termination, lapse, and mortality rates.

It is not too late to participate in the study. Contributing companies will receive a free copy of the report summarizing our results, as well as comparisons of their own data to industrywide values.

If you would like to know more about the study, or if you would like assistance setting assumptions based on these industrywide benchmarks, please contact Anders Hendrickson or [email protected].

Industry news

ReFocus

The American Council of Life Insurers (ACLI) and Society of Actuaries (SOA) jointly hosted the ReFocus Conference from February 15 through February 18 in Las Vegas. ReFocus is an annual global conference for life insurance and reinsurance professionals. Attendees were able to hear directly from life insurance executives through various sessions, including one-on-one and panel discussions. The ReFocus Conference also provides ample networking opportunities for interested parties to initiate further discussions on potential transactions.

We have seen interest in shopping and acquiring blocks of LTC liabilities pick up over the last few years with several deals involving LTC blocks being completed. See the Milliman publications and news section below for more insights.

ILTCI recap

The annual ILTCI Conference was held this past month in Orlando and brought a variety of sessions. Milliman presented at the following breakout sessions:

Wellness & aging in place solutions

Tale as Old as Time: Balancing Dreams and Reality in Wellness Program Evaluation—Jeff Anderson and Joe Long

• This session discussed multiple methodologies, approaches, and statistical metrics used to measure results of LTC wellness programs. It also discussed practical considerations and limitations to keep in mind when analyzing and communicating results to stakeholders.

Marketing, engagement, and research

Dream Your LTC Future: Designing and Delivering the Right LTC Solutions—Juliet Spector

• This session highlighted promising LTC industry trends and opportunities to reframe LTC risk from the consumer perspective.

Legal, compliance, and regulatory

MJ vs. LeBron: The Great Debate in LTC Compliance & Product Development—Randy Beams and Taylor McKinnon

• This session explored contested regulatory and product development issues in LTC. Discussion topics included nonforfeiture requirements for acceleration products, inflation protection, the impact of extension and restoration on accelerated status, and state-imposed disclosure requirements.

Product Innovation vs. Regulatory Hurdles: Can We Break the Tie?—Evangeline Stewart

• This session discussed unique LTC product designs. examined the associated compliance and regulatory challenges, viability of LTC innovation, and strategies for state approval.

Earnings results/news

As part of its 2025 results and outlook for 2026, Unum provided an update on its closed block strategy, noting progress on the following:

• Reduced LTC footprint by 20% from its 2025 reinsurance deal with Fortitude Re
• Discontinuation of new employee coverage on existing group LTC cases effective February 1, 2026
• Strong track record from rate increase program with over $5 billion of value since the early 2000s

Unum’s President and CEO, Richard McKenney, indicated that they are looking to make more deals to put their LTC business behind them. McKenney said, “… Something we have been talking about pretty consistently is [wanting] to continue to take the opportunity to get out of [LTC] … through reinsurance, [and] be active in the markets around that."

Milliman publications and news

LTC M&A

In late 2023, we asked: Could legacy LTC blocks be the next wave of M&A deals?

Since then, three large standalone LTC reinsurance deals have been announced, alongside other LTC activity—signaling a mergers and acquisitions (M&A) market that’s learning, partnering, and ready to transact on these blocks of business.

This update to the 2023 article distills what has changed in the LTC M&A market and what insurers should watch for in the coming years.

LTC claims

Milliman has released its second annual projection of U.S. long-term care insurance (LTCI) industry claims, authored by Rachel Marsiglio, Juliet Spector, and Robert Eaton. Key findings include:

• Peak claims: LTCI paid claims are projected to reach $44 billion by 2041, up from $17 billion in 2024.
• Claimant volume: This is expected to peak at 332,000 claimants in 2037.
• Market context: While legacy standalone LTCI blocks remain in runoff, 2025 saw renewed market activity with new product filings and sustained hybrid life/LTCI sales growth.

The projection leverages Milliman's proprietary Integrate® software and the 2023 Milliman LTC Guidelines, analyzing approximately 5.6 million LTCI policyholders as of year-end 2024. The analysis uses first-principles actuarial modeling to project claims based on mortality, voluntary lapse, and morbidity assumptions.

This comprehensive analysis provides critical insights for carriers, regulators, and industry stakeholders navigating the evolving LTCI landscape.

Read the full white paper here.

LTC Index

In January 2026, we published the 2025 Milliman Long-Term Care Index, designed to provide a clear benchmark of expected lifetime costs for paid long-term care beyond age 65. A few key findings:

• For a 65-year-old in 2025, the Index is $135,000—the average amount to set aside today to cover future formal care at commercial market rates.
• Costs vary widely by person: Projected lifetime costs average $171,000 for females and $98,000 for males, reflecting higher likelihood and longer duration of need among women.
• Duration matters: About half of those who need care require it for less than a year (around $30,000), while five or more years of care can exceed $665,000 on average.
• Geography matters, too, with differences driven by mortality, morbidity, and local prices.

With a record 4.2 million Americans turning 65 in 2025, starting earlier and earning higher returns can materially reduce the savings required. Read the full analysis to see what it could mean for your planning.

Complex Assets in Insurance and Annuity Industries Report

Structured credit has moved from a niche sleeve to a core pillar of life insurers’ SAA. In a recent Milliman paper for the Society of Actuaries, we examine how complex assets—CLOs, ABS, RMBS, and CMBS—are reshaping insurer portfolios and what ALM teams should prioritize next.

These instruments can deliver incremental spread, capital efficiency, and better alignment with liability cash flows. They also bring layered risks: liquidity compression, model dependence, valuation smoothing, and correlation spikes in stress. Key questions we address:

• Are diversification benefits overstated during market stress?
• Is the illiquidity premium being rigorously measured—or assumed?
• Are capital-adjusted returns fully incorporated into SAA optimization?
• Do governance frameworks match the structural complexity of these assets?

Read the full study at the Society of Actuaries website.

Other recent publications illustrating our ongoing thought leadership in SAA/ALM optimization

• Asset allocations and investment strategies of U.S. life insurers in an inflationary interest rate environment, February 2026
• Prepayment risk in a VM-22 world: Structural dynamics, scenario behavior, and portfolio implications for life insurers, January 2026
• Bridging the private-credit modeling gap: A nearest-neighbor approach for insurers, December 2025

Experience Reporting Form (ERF) summary

This past year, we analyzed the standalone LTCI industry through 2024 using data from the NAIC's Experience Reporting Forms (ERFs).

As of year-end 2024, approximately 5.8 million individuals (roughly 7% of Americans age 60+) had standalone LTCI coverage. Annual incurred claims reached $17 billion in 2024, and industry reserves eclipsed $200 billion as of year-end 2024.

Please see the article for more key statistics, observations, and trends across the LTCI industry for standalone products.

Broker World survey

The 2025 Milliman Long Term Care Insurance Survey is the 27th consecutive annual review of standalone LTCI published by Broker World magazine. This report analyzes both the worksite and total standalone LTCI market, including sales distributions, claims and underwriting trends, and provides a review of available standalone products.

Notable enhancements to this year’s article include a new report structure to improve readability with links to navigate through various sections of the report.

Short-term care/Medicare supplement article

Milliman is developing an update to its 2021 SOA Health Watch article that highlights and demonstrates the potential fit of short-term care and Medicare supplement coverage together in a product portfolio. This refreshed piece will examine how cross-selling these products may offer broader protection for the policyholder while simultaneously helping insurers manage their overall risk. Using practical examples, the update will illustrate why pairing these coverages may be worth considering.

Milliman in the community

Math Motivators

In February, Milliman renewed a three-year financial commitment to The Actuarial Foundation’s Math Motivators Tutoring Program. The program expands access to high-quality, free math tutoring for students in under-resourced communities in the United States. Milliman’s renewed investment will deepen The Actuarial Foundation’s impact by growing in-person tutoring capacity in key regions, strengthening partnerships with schools to increase access, and expanding services to middle school students as they progress through high school.

Since its launch in 2016, Math Motivators has reached thousands of students nationwide, pairing them with volunteer tutors who provide personalized support. The program serves students in grades 5–12 with foundational math, algebra, advanced subjects, and SAT/ACT test preparation.

UNDP-Milliman Global Actuarial Initiative (GAIN)

Milliman continues its initiative with the United Nations Development Programme (UNDP) to build actuarial capacity and expertise in developing countries, helping quantify and prepare for risks to support sustainable development. The UNDP-Milliman Global Actuarial Initiative (GAIN) seeks to enable insurers, pension funds, and social security administrations to better manage risks and in turn offer innovative and affordable insurance solutions for all.

Last year, Milliman employees traveled to Pakistan to meet with regulators, university representatives, insurance companies, consulting firms, and local actuaries to evaluate the supply of actuarial talent and the demand within Pakistan’s insurance and financial sectors. The group held discussions with the Securities and Exchange Commission of Pakistan, the Ministry of Finance, the National Disaster Risk Management Authority, and other key stakeholders. The team left optimistic about follow-up steps to support regulatory framework and expand actuarial opportunities in-country—ensuring that Pakistan’s actuarial talent can help meet the growing risks and needs of its economy.

Please reach out to a Milliman consultant to discuss any of these topics or other related items that interest you.