Executives at Genworth Financial Inc. managed to keep the company’s long-term care insurance (LTCI), life insurance and annuity operations on track in the second quarter as they focus on trying to complete a pending sale of the company to a unit of China Oceanwide Holdings Group Co. Ltd.
Genworth as a whole reported $249 million in net income for the quarter on $2.16 billion in revenue, compared with $271 million in net income on $2.22 billion in revenue for the second quarter of 2017.
The Richmond, Virginia-based company managed to hold revenue almost steady even though it has stopped actively selling much of any product other than mortgage insurance.
LTCI, Life and Annuity Performance
For years, Genworth was a leader in the stand-alone long-term care insurance, life insurance and annuity markets.
The LTCI unit is reporting $22 million in adjusted operating income on $1 billion in revenue, compared with $33 million in adjusted operating income on $1 billion in revenue for the year-earlier quarter.
Premium increases helped Genworth push LTCI premium revenue up to $632 million, from $623 million.
The life insurance unit is reporting $4 million in adjusted operating income on $367 million in revenue, compared with a $1 million net loss on $411 million in revenue for the year-earlier quarter.
The fixed annuity unit is reporting $31 million in adjusted operating income on $172 million in revenue, compared with $7 million in adjusted operating income on $210 million in revenue for the year-earlier quarter.
Genworth was hoping to use cash from China Oceanwide to pay off a large amount of debt that matured in the spring. Instead, because the China Oceanwide deal is still in progress, Genworth made the debt payments by using cash on hand, and by issuing new debt secured by the value of mortgage insurance subsidiaries.
Genworth’s holding company cash and liquid asset total has fallen to $622 million, from $858 million a year earlier.
The consolidated risk-based capital ratio for its life insurance companies has fallen to 275%, from 331%.