Genworth Financial Inc. (NYSE:GNW) has taken a $478 million charge in connection with a previously announced effort to increase reserves for margins for active long-term care insurance (LTCI) lives.
The charge contributed to the company reporting a $760 million net loss on $2.4 billion in revenue for the fourth quarter of 2014. That compares with $208 million in net income on $2.4 billion in revenue for the fourth quarter of 2013.
The company also took a $340 million charge for a write-off of life insurance and LTCI goodwill. “Goodwill” is a figure that represents the difference between the price a company has paid for acquired companies’ and the acquired companies’ tangible value.
Genworth’s LTCI unit is reporting a $506 million net operating loss, compared with $42 million in net operating income for the year-earlier quarter.
Tom McInerney, Genworth’s president, said challenges in older LTCI blocks, which were sold when interest rates were higher and views on LTCI claim risk were different, have overshadowed the otherwise strong performance of other Genworth businesses.