Genworth Set to Offer Long-Term Care Services in Texas

Genworth Financial is getting ready to open up CareScout, a new long-term care provider network business, in the fall.

The Richmond, Virginia-based company has signed up enough home care providers and other LTC providers to reach about half of people in Texas who are ages 65 or older, Tom McInerney, the company’s CEO, told securities analysts Wednesday.

About 43,000 of Genworth’s 1 million long-term care insurance insureds live in Texas.

CareScout will probably move into Arizona and Florida next, McInerney said.

But McInerney warned that the company’s struggling life insurance and annuities business, which wrote the company’s LTCI business, has a value of zero. “We are not putting capital in or taking it out,” he said.

What It Means

Genworth might end up doing well as a company, but what that will mean for the people covered by its LTCI policies is unclear.

The Earnings

Genworth held a conference call with securities analysts to go over its earnings for the second quarter.

The company was once a major writer of life insurance and annuities as well as long-term care insurance. It has ended sales of life insurance and annuities and no longer sells significant amounts of new LTCI coverage, but it owns an 81.6% stake in Enact Holdings, a large player in the private U.S. mortgage insurance market.

The company reported $168 million in net income for the latest quarter on $1.9 billion in revenue, compared with $197 million in net income on $1.9 billion in revenue for the second quarter of 2022.

The Strategy

Genworth is involved in long-running, ongoing negotiations to persuade state regulators to let it increase LTCI rates, based on arguments that the policies were dangerously underpriced due to misunderstandings about policyholder behavior and other factors.

During the conference call, McInerney said that most of Genworth’s value as a business depends on its stake in Enact and the future of CareScout.

Genworth will start by offering CareScout services to its own policyholders.

“With the discounted rates negotiated, Genworth policyholders will be able to extend their available benefits and Genworth will realize claims savings over time,” McInerney said.

Later, he said, CareScout will market its services to other LTCI issuers and, eventually, to members of the general public.