Strong term life sales and profits helped a Richmond, Va., insurer pump up results during the fourth quarter of 2004 despite flat long term care insurance profits.[@@]
The insurer, Genworth Financial Inc., is reporting $346 million in net income for the latest quarter on $2.6 billion in revenue, compared with $213 million in net income on $3.1 billion in revenue for the fourth quarter of 2003.
Net income was up 62%.
Genworth emerged as a stand-alone company in May 2004, when its former parent and current majority owner, General Electric Company, Fairfield, Conn., organized a public offering of Genworth stock.
Genworth executives go to great lengths to emphasize that 2004 net results are not necessarily comparable to 2003 results, because of all the changes in corporate organization that took place when Genworth separated from General Electric. The operations Genworth now controls generated about $2.6 billion in revenue during the fourth quarter of 2003, the company says.
But Genworth says term life sales increased 42%, to $27 million, and overall life insurance profits increased to $67 million, from $50 million. Universal life sales also rose.
Efforts to increase prices at the long term care insurance operation cut new sales to $41 million, from $54 million. But LTC profits fell only slightly, to $46 million, from $47 million.
Genworth recently introduced a new LTC product in a few large states, “and we could continue to see some uneven sales patterns,” Genworth Chief Financial Officer Rick McKenney said during the company’s earnings conference.”
Genworth has been trying to regain LTC sales momentum by improving producer education and expanding its wholesaling team, McKenney said.
McKenney reported that the number of LTC wholesalers increased to 140 in 2004, up 25% from the 2003 total.