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Genworth CEO halts sale of life insurance unit

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(Bloomberg) — Genworth Financial Inc., the insurer that has been selling units to rebuild capital, said it will probably not get rid of its entire life and annuity operation.

The insurer may instead seek buyers for blocks of life contracts, Chief Executive Officer Tom McInerney said Wednesday in a conference call discussing results at the Richmond, Virginia-based insurer. Genworth dropped 9.7 percent to $6.34 at 9:32 a.m. in New York, extending its decline for the year to about 25 percent.

The decision to hold the unit complicates McInerney’s goal of reducing debt by $1 billion to $2 billion. The CEO is seeking to expand profits from mortgage insurance and stem losses from long-term care coverage. He has acknowledged that life sales have been slumping.

“There were lots of positives for doing the deal, including our ability to reduce debt,” McInerney said. “In the end, our view was they were outweighed by potential adverse effects on the ratings, and the loss of earnings and diversification.”

Genworth reported a second-quarter net loss of $193 million Tuesday on costs at a European lifestyle protection insurance business that McInerney is planning to sell.


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