Genworth Moves Ahead With Long-Term Care Reboot

Genworth Financial has launched CareScout, a business that helps consumers find discounted long-term care services, and it’s still hoping to return to the long-term care insurance market.

Tom McInerney, Genworth’s CEO, talked about LTC reboot efforts last week, during a conference call the company held with securities analysts.

CareScout is testing its services on the 43,000 Genworth LTC insureds in Texas. “Policyholders have begun to make their first matches with their network providers,” McInerney said.

Genworth is also talking to state regulators and “working with a few highly rated reinsurers” on bringing new long-term care products to market, McInerney said.

What it means: Genworth’s return to the long-term care insurance market could be part of a revival of private-sector efforts to help people like your clients plan for long-term needs.

The history: Genworth helped create the modern U.S. long-term care insurance industry.

It ran into trouble when problems with the assumptions used to design LTCI products clashed with state LTCI rate stability rules that took effect in the early 2000s.

Genworth stopped writing new LTCI policies in 2019. It still manages large blocks of in-force LTCI policies, life insurance policies and annuities, and it owns an 81.6% stake in Enact, a mortgage insurance issuer.

The earnings: Genworth held the conference call to go over its earnings. The company reported $60 million in net income for the third quarter on $1.8 billion in revenue, compared with $171 million in net income on $1.8 billion in revenue for the third quarter of 2022.

The long-term care insurance business posted a $71 million adjusted operating loss, compared with a $26 million adjusted operating profit for the year-earlier quarter, due in part to the fact that, as the LTCI insureds age, they are filing more LTCI claims.

CareScout: CareScout can determine the level of care that people need and help them find providers who have agreed to provide discounts for CareScout customers.

Genworth plans to invest $30 million in starting CareScout.

Genworth estimates that it has about $61 billion in net liability for future LTCI benefits. Over time, CareScout could reduce Genworth’s insureds’ claims by more than $1 billion, McInerney said.

CareScout is preparing to expand outside of Texas by setting up a field sales organization for the Southwest, Southeast and Mid-Atlantic regions. Managers would also like to offer CareScout services outside the United States.

Tom McInerney. Credit: Victor J. Blue/Bloomberg