Conseco: Market Assumptions and Risk Harvard Case Solution & Analysis

Conseco, an insurance provider, had acquired various Long-Term Care (LTC) insurance companies over the years and had reached to a leading position in the market. But in March 2007, the CEO James Prieur encountered a serious issue when the New York Times published a story on the front page about a lamenting family of an elderly lady who had paid for her LTC policy of Conseco with loyalty, just to find that it would not pay her claims. The death of the elderly woman was resulted in the loss of the family business, and till her death, her family covered all the healthcare expenses of the woman. However, the family was now following a lawsuit publicly. This crisis was a significant threat for the company that relied upon its thousands of employees, investors, and independent agents who sold the insurance policies. On top of this, the current indications in the industry were reflecting that the LTC business itself was not feasible. The case asks students to determine not only an effective approach in this crisis by putting oneself in the shoe of Prieur, but also to determine the fundamental risks in the LTC industry and what are the ways in which it could affect Conseco’s sustainability and success in the longer term.

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