Executives at Genworth Financial Inc. (NYSE:GNW) say a combination of long-term care insurance (LTCI) premium increases and benefits reductions have started to help profits.
The company wants to use LTCI premium increases to bring in the equivalent of about $200 million to $300 million in additional premiums per year by 2017.
At the end of the third quarter, the company had received approvals for about $155 million to $160 million of the targeted premium increase, the company said today.
Three months ago, the company said it had received regulatory approvals for about 20 percent of the LTCI premium increases requested.
In some cases, executives said today during the company’s third-quarter earnings call, consumers choose to accept a reduction in policy benefits rather than pay higher premiums.
During the latest quarter, the effects of LTCI premium increases and related benefit reductions helped increase LTCI business results $26 million over what they were in the third quarter of 2012, the company said.
Genworth as a whole is reporting $148 million in net income for the third quarter on $2.3 billion in revenue, compared with $35 million on $2.5 billion in revenue for the third quarter of 2012.
The LTCI business, which is part of the U.S. life business, is reporting $41 million in net operating income on $564 million in revenue, compared with $45 million in net operating income on $541 million in revenue for the third quarter of 2012.
Sales fell to $37 million, from $38 million in the second quarter and from $63 million in the year-earlier quarter, in part because of Genworth’s previously announced decision to stop selling LTCI through AARP, the company said.