(Bloomberg) — Pacific Life Insurance Co. is considering an acquisition of Genworth Financial Inc.’s term-life platform for new policies as the firm seeks to gain technology that would help bolster its market position.
Both companies are conducting due diligence, and a final decision on a deal hasn’t been reached, Newport Beach, California-based PacLife said Monday in a statement.
PacLife is working to build its life operation as competitors retreat. Genworth Chief Executive Officer Tom McInerney has sold businesses to simplify the insurer after suffering losses on its long-term care coverage, which pays for home health aides and nursing home stays.
McInerney has suspended sales of traditional life insurance and fixed annuities, saying consumers prefer to buy coverage from more highly rated firms. Genworth is rated junk by Standard & Poor’s while PacLife has an A+ grade.
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PacLife would gain more technology to help it manage term-life operations, including an automation system for underwriting, according to the statement. The insurer also may buy a building in Lynchburg, Virginia from Genworth, according to an article Monday in the News & Advance, a paper in that city, which was also first to report on the possible insurance deal.
Genworth would then lease back space in the property for its remaining staff there, according to the article. Julie Westermann, a spokesman for Richmond, Virginia-based Genworth, confirmed the paper’s account and said there’s no guarantee the two sides will reach a deal.