Close Close

Life Health > Life Insurance

Genworth CEO halts life, annuity sales after loss; shares tumble

Your article was successfully shared with the contacts you provided.

(Bloomberg) — Genworth Financial Inc. (NYSE:GNW) suspended sales of traditional life coverage and fixed annuity products so the company can focus on fixing the unit that provides long-term care insurance (LTCI) coverage.

The insurer posted a fourth-quarter loss of $292 million, or 59 cents a share, Richmond, Va.-based Genworth said Thursday in a statement. The company declined 12 percent to $2.45 in extended trading at 4:57 p.m. in New York.

Chief Executive Officer Tom McInerney has been selling assets and seeking to stabilize operations after the insurer suffered a $1.24 billion loss for 2014 tied to LTCI. He is also seeking to win regulator’s approvals to increase LTCI rates and guard the company’s bond rating.

See also: Genworth exec: The LTC crisis is still coming

“In our U.S. life insurance businesses, we are actively pursuing multiple restructuring actions to separate and isolate our LTC business and narrow our commercial focus, including through the suspension of traditional life and fixed annuity sales,” he said in the statement.

The insurer has plunged 25 percent this year through Thursday’s close and more than 80 percent since the end of 2013. Results were released after the end of regular trading.

McInerney struck a deal in October to sell a European mortgage unit to AmTrust Financial Services Inc., saying the proceeds would help satisfy higher capital rules on companies that back home loans in the U.S. The insurer said at the time that it expected to record an after-tax loss of about $140 million in the fourth quarter tied to the transaction.

See also: 

Genworth posts $531 million LTCI reserve increase

Powerful health insurance lobby’s new goal: win back members


Are you following us on Facebook?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.