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Long-Term Care Insurance


Leaders in LTCI Actuarial Models


Successfully managing a block of LTCI entails using models that can be easily reconciled to operational metrics as they emerge, with a dashboard that lets you immediately know if the emerging experience varies enough from expectations to require investigation.


ARC is the leading consulting firm for modeling LTCI.  Using Monte Carlo simulation on the Prophet actuarial modeling platform, we specialize in creating first-principle models where the elements of the model closely tie to the underlying drivers of morbidity and the specific features of the policy.  These models are more reliable because they more closely represent the measurable risk drivers and specific insurance coverages being modeled.  Furthermore, our models provide prediction intervals on operational and financial metrics, allowing you to gauge whether the deviations from best-estimate predictions are statistically significant and need further explanation.

Next Steps

For more information, contact:

Roger Loomis






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21st Century Experience Analysis with Predictive Modeling


By performing experience analysis with predictive analysis tools such as Generalized Linear Modeling, it is possible to get more robust results with less data.  Just as importantly, the predictive modeling approach gives an indication of the credibility level of the experience, expressed in confidence intervals around the assumptions. 


ARC is a leader in predictive modeling for LTCI.  By quantifying confidence intervals around pricing assumptions, we help companies better understand their emerging experience and how it relates to their pricing assumptions.  This type of analysis can be used to evaluate whether adverse experience is statistically credible, and can help both regulators and insurers know if a rate increase is statistically justified.

Designing Less-Risky Products


Traditional LTCI is an inherently risky product design that requires large margins.  Because of the inherent riskiness and large capital requirements, many insurers choose not to offer these policies.


Innovative LTCI products are now being designed and sold that provide more benefits to policyholders with significantly less risk to the insurers.  Because of our expertise in modeling complex products and measuring risk, ARC is an ideal consulting partner for developing innovative, less-risky LTCI products.  These products might require a lower risk margin than traditional stand-alone LTCI.  The NAIC’s 2014 Long-Term Care Insurance Model Regulation specifically refers to a research study performed by ARC on behalf of the Society of Actuaries as a source for the considerations required to justify a lower margin.

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