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Genworth taps ex-Hancock exec to lead life unit

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(Bloomberg) — Genworth Financial Inc. (NYSE:GNW) has picked James Boyle to run its U.S. life insurance business — the unit that writes long-term care insurance (LTCI).

The move comes as Tom McInerney, Genworth’s chief executive officer, works to reshape the company’s management.

James Boyle

Boyle was previously president of John Hancock Financial Services Inc., the U.S. division of Manulife Financial Corp. (TSX:MFC).

McInerney is working to improve LTCI and retirement products results, after striving in 2013 to bolster the credit rating of the business that guaranties mortgages.

Results at the life unit have been squeezed by low interest rates and higher-than-expected LTCI costs.

“It’s not as simple as straight life insurance,” Mark Palmer, an analyst at BTIG LLC, said in a telephone interview before the announcement. “What they really need is someone who is sufficiently grounded in several areas of insurance such that they’ll be able to add value across multiple units.”

McInerney committed to LTCI as rivals pulled back from the market.

Genworth is counting on periodic LTCI premium increases of 2 percent to 4 percent to maintain profit targets, McInerney said in a Dec. 4 interview.

The LTCI unit accounted for about 52 percent of the revenue generated by Genworth’s U.S. life unit in the first three quarters of 2013.

The unit accounted for $1.6 billion in premium revenue and about $800 million in investment income.

McInerney’s template

Investors and analysts didn’t hear much from McInerney in his first months on the job after joining in January 2013, Palmer said. McInerney was more vocal in the second half of the year after reviewing operations, according to the analyst.

“That’s a template for the new CEO of the life insurance business to come in and be able to spend some time identifying what the key issues are from a diagnostic standpoint before taking action,” Palmer said.

Boyle replaces Patrick Kelleher, whose departure was announced in October. He had worked at Genworth since 2007. McInerney served as CEO for the U.S. life unit in the interim.

McInerney assigned Georgette Nicholas in December as chief financial officer of the Australian mortgage-insurance unit, which is preparing for an initial public offering. She had been running investor relations. Paul Gomez, previously senior vice president of U.S. life insurance, was promoted in September to chief operating officer of the mortgage-insurance business in the country.

McInerney was previously the chief operating officer of ING Groep NV’s insurance unit.

Genworth’s stock doubled in 2013, McInerney’s first year as CEO.

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