(Bloomberg) — Genworth Financial Inc., the insurer battered by losses on long-term care coverage, fell the most in the Standard & Poor’s 500 Index after Chief Executive Officer Tom McInerney said that there are limited options to simplify the company in the short term.
The insurer slumped 10 percent to $4.69 at 10:59 a.m. in New York trading, extending the year’s decline to 45 percent. Genworth reported Thursday a $284 million third-quarter loss as results missed analysts’ estimates, and has faced pressure to sell more assets to free up capital.
“We continue to make some headway on our strategic priorities to rebuild shareholder value, but there is much more work to do,” McInerney said Friday in conference call. “Given ratings pressures and our dependencies among our subsidiaries, our ability to take more substantial steps to simplify our business portfolio is limited in the near term.”
McInerney has been divesting some European units and a block of life policies after the company was burned by losses on long-term care insurance, which pays for home-health aides and nursing-home stays. McInerney suspended an initial plan to divest a life and annuity operation, saying in August that a sale could hurt the Richmond, Virginia-based company’s ratings and earnings diversity.
The CEO said Friday that he expects to use some proceeds from the sale of a European lifestyle-protection unit to pay down debt maturing in 2016. The insurer is still focused on reducing its debt by $1 billion to $2 billion, a goal that could open up a path for the company to split its mortgageinsurance units from the life businesses, he said.