Genworth Financial Inc. (NYSE:GNW) says it has increased long-term care insurance (LTCI) claim reserves by $531 million as a result of a wide-ranging review of LTCI reserves.

The company and analysts have been talking about the review for months.

The reserve increase sparked by the review led the company’s LTCI unit to post a $361 million net operating loss for the third quarter, compared with a $41 million net profit for the third quarter of 2013.

Because of the LTCI reserve increase, a $167 million reduction in the value of goodwill at the LTCI business, a $350 million reduction in the value of goodwill at the life insurance business, and other charges, the company as a whole ended up posting a net loss of $844 million for the quarter on $2.4 billion in revenue. That compares with $148 million in net income on $2.3 billion in revenue for the third quarter of 2013.

The company as a whole recorded a $317 million operating loss for the quarter. A year ago, the company had $158 million in operating earnings.

New individual LTCI sales fell to $28 million in the latest quarter, from $37 million in the year-ago quarter, but were up from $24 million in the second quarter.

New group LTCI sales fell to $1 million, down from $3 million in the year-ago quarter and $2 million in the second quarter.

Fixed annuity sales fell more sharply that individual LTCI sales. At the fixed annuity business, sales fell to $371 million for the latest quarter, from $760 million from the year-ago quarter.

Company executives say they increased the LTCI reserves because they found that claimants are staying on claim longer than expected and using more of the available benefits than the company had assumed in earlier reserve calculations.

This quarter, the company is reviewing active life margins and believes it may have to reduce the active life margins, but it is also conducting other management actions that might offset much of the margin reduction coming from the claim reserve review, the company says.

The company also says it expects to make more use of reinsurance when it sells new LTCI business.

The company notes that it continues to develop and sell new LTCI products,

“The company is evaluating market trends and sales and investing in the development of products that will help expand the market and meet middle-income consumers’ needs,” the company said in a discussion of its earnings. “In addition to product development, the company is investing in key distribution and marketing areas to grow profitable new sales over time and better serve the company’s distribution partners and their clients.”

See also: Genworth to try two-track LTCI design

Tom McInerney, president of Genworth, said in a statement that the company believes its current LTCI strategy is the best option for Genworth.

“The turnaround in this business will be more difficult and prolonged because of the poor performance of the older generation of products,” McInerney said. “Despite this setback, we remain steadfast in our commitment to transform this business.”