© 2024 KRWG
News that Matters.
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations

A Long-Term Bet Gone Bust

NPR

Last week, General Electric said it was taking a massive loss — $6.2 billion — related to an obscure corner of the company: long-term-care insurance.

Long-term-care insurance is this kind of insurance that anyone can buy. It covers things like nursing home care, or a home health aide.

But recently, GE came out and said it was having an "adverse claims experience" with these policies. Basically, the company got the math wrong, and lost billions as a result.

This isn't just about GE. MetLife got out of this business and so has just about everybody else. They all said the same thing: we underestimated how much this was going to cost.

Today on the show: How did the insurance companies get the numbers so wrong? And why can't they get it right?

Music by Drop Electric. Find us: Twitter/ Facebook.

Subscribe to our show onApple Podcasts, PocketCasts and NPR One.

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Stacey Vanek Smith is the co-host of NPR's The Indicator from Planet Money. She's also a correspondent for Planet Money, where she covers business and economics. In this role, Smith has followed economic stories down the muddy back roads of Oklahoma to buy 100 barrels of oil; she's traveled to Pune, India, to track down the man who pitched the country's dramatic currency devaluation to the prime minister; and she's spoken with a North Korean woman who made a small fortune smuggling artificial sweetener in from China.
Cardiff Garcia is a co-host of NPR's The Indicator from Planet Money podcast, along with Stacey Vanek Smith. He joined NPR in November 2017.