What You Need to Know
- Genworth says it's already talking to potential LTCI business partners.
- The company still wants to work with China Oceanwide to develop long-term care solutions for China.
- The goal would be for the new products to have lower and more predictable risk.
Executives at Genworth Financial Inc. want to work with other companies to get back into the U.S. long-term care insurance (LTCI) market.
The Richmond, Virginia-based insurer also wants to team up with China Oceanwide Holdings Group Co. Ltd. — a company that spent more than four years trying to acquire Genworth — to sell long-term care (LTC) products in China.
Tom McInerney, Genworth’s CEO, talked about LTCI revival plans Friday, during a conference call the company held to go over first-quarter earnings with securities analysts.
Genworth was a major player in the U.S. life insurance and annuity markets, and it was a dominant player in the U.S. LTCI market. It has suffered from financial problems in recent years because of the effects of low interest rates, incorrect pricing assumptions and tough rate stability rules on the LTCI business. Genworth still has a healthy mortgage insurance business, and it hopes to raise cash by selling a minority stake in that business to the public through an initial public offering.
Proceeds from the sale of the mortgage insurance company stake should help Genworth get its debt down to a more manageable level, McInerney said.
Genworth is also looking at ways to strengthen its U.S. life insurance business — the unit that includes the LTCI operations — by “developing and refining sustainable long-term care insurance business models,” McInerney said.
Increasing LTCI Premiums
One part of that effort, he said, will be to continue to ask state insurance regulators for permission to increase LTCI premiums and reduce benefit options.