January 10, 2011

Genworth Financial to Exit Variable Annuity Business

The company will also suspend sales of ‘linked benefit’ product until market develops

Genworth Financial Inc. announced Jan. 6 that it was discontinuing sales of retail variable annuities and group variable annuities in the first quarter. The Richmond, Va.-based insurance giant said current holders of those annuity contracts will not be affected.

According to the Richmond Times-Dispatch, the company also said about 100 jobs would be eliminated as a result. The company also is suspending sales of one type of linked-benefit offering — which combines annuities and long-term care insurance — until that market develops further.

The discontinuation will affect an additional 200 employees companywide. Genworth employs about 6,000 people.

The company said it was discontinuing sales of the annuities as part of an ongoing strategy to focus on the markets and customers where it had strengths.

"We are looking to continue to refine our product offerings for long-term growth and profitability," company spokesman Al Orendorff told the paper.

The Times-Dispatch notes that Genworth will continue to offer fixed annuities and other life insurance, long-term care insurance and wealth management services.

The company said it expected to record a pre-tax charge of about $12 million in the first quarter for severance and outplacement support for affected employees and other costs.

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