Executives at Genworth Financial Inc. (NYSE:GNW) held a conference call Wednesday to sell shareholders and securities analysts on the idea that staying in the long-term care insurance (LTCI) makes sense.
Some analysts have written about insurers’ LTCI units in recent years as if they were radioactive.
Tom McInerney, Genworth’s president, said during the call that, after a long review, the company wants to stay in the LTCI business.
“We have determined that long-term care insurance is a business that we believe can be managed successfully,” McInerney said.
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Genworth has revamped its LTCI policy design strategy and prices to reduce its exposure to risk, and that the company is selling state insurance regulators on the idea that LTCI issuers’ should seek regular, modest rate changes to reflect changes in conditions, McInerney said.
In the past, many consumer groups and regulators have argued that LTCI issuers should get prices right when they first sell the products.
“In hindsight,” McInerney said, “I think the industry would have been much better off if they managed the business more like a health insurance business versus life and sought regular price increases of more modest amount that are easier for regulators to approve and more comfortable for consumers.”