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August 19, 2001 at 08:00 PM
Penn Treaty Executives Working On A Turnaround
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Executives at Penn Treaty American Corp. say they are more optimistic than they were earlier this year about their ability to turn the company around.
The Allentown, Pa., long-term care insurer recently called off plans to sell its Medicare supplement business, disability business and New York subsidiary to Universal American Financial Corp., Rye Brook, N.Y., for $13 million.
Penn Treaty thought the deal was the best it could get in April, when it sorely needed cash, but it raised $26 million through a public offering in May.
“The success of the rights offering enabled the company to pursue and enter discussions with other insurance companies,” Penn Treaty says.
The company is hoping it can get a better deal by selling units separately.
The company also hired Bruce Stahl, a respected long-term care expert, as its chief actuary.
Hiring Stahl “underscores our continuing efforts to build a strong management team with the skills needed to grow in the future,” Irving Levit, the chairman, said in a statement.
Levit helped build the modern long-term care insurance industry in 1972, by pushing Penn Treaty into the market. The company competed against bigger carriers in the 1980s and 1990s by offering generous benefits at low rates.
