A Midwestern insurer says it believes its long term care insurance business is starting to do better.
Conseco Inc., Carmel, Ind., is reporting a $54 million net loss for the third quarter on $1.2 billion in revenue, compared with $48 million in net income on $1.1 billion in revenue for the third quarter of 2006.
Net results include $16 million in litigation settlement costs, a $76 million charge related to a coinsurance deal, and $51 million in net realized investment losses, Conseco says.
Premium revenue rose to $703 million, from $641 million, at the Bankers Life unit, and to $32 million, from $28 million, at the Colonial Penn unit.
Conseco Insurance Group revenue fell to $294 million, from $407 million, but Conseco is hoping the business the group is writing will be more profitable, the company says.
Conseco has set aside large reserves for LTC insurance claims, and the company notes that the LTC run-off block reported only a small loss this quarter.
The LTC block is on target to become profitable in 2008, the company says.
In related news, Conseco says it is recapturing a block of Colonial Penn life business that generates about $50 million in traditional life premiums per year from an affiliate of Swiss Reinsurance Company, Zurich.
Conseco ceded the block to the Swiss Re affiliate in 2002.
Conseco’s Colonial Penn will pay the Swiss Re unit a fee of $63 million in exchange for recapture of 100% of the liability for the future benefits previously ceded.
Colonial Penn already administers the policies being recaptured, Conseco says.
Conseco needs regulatory approvals for the transaction from several states and hopes to complete it by the end of the year.