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Genworth rebounds as LTCI results better than expected

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(Bloomberg) — Genworth Financial Inc. (NYSE:GNW) jumped in early trading after losses at the long-term care insurance (LTCI) unit were narrower than some analysts had expected.

The insurer rallied 15 percent to $9 at 7:32 a.m. in New York. The Richmond, Va.-based company had declined 8.1 percent this year through Tuesday.

Genworth posted a $760 million net loss, fueled by $478 million in costs to add to reserves for LTCI policies that the firm acquired before 1996, and set aside more funds at a New York unit, the company said late Tuesday in a statement

“The charges and capital metrics that resulted from GNW’s LTC reserve review were in the ballpark of expectations and better than feared,” Ryan Krueger, an analyst at Keefe, Bruyette & Woods Inc., wrote in a note to clients.

Genworth Chief Executive Officer Tom McInerney also announced a plan to cut jobs to help save $100 million annually.

Larger life insurers such as MetLife Inc. (NYSE:MET) and Prudential Financial Inc. (NYSE:ORU) have stopped offering the long-term care policies after being burned by higher-than-expected claims costs.

See also: Analyst: Unum LTCI charge in line with expectations and LifeSecure stands by LTCI.