Genworth CEO sees tough turnaround from $844 million loss
November 7, 2014 by IFAwebnews Staff
Genworth Financial faces a tougher path after posting a record net loss on costs tied to its long-term care insurance business, according to CEO Tom McInerney.
“The turnaround in this business will be more difficult and prolonged,” McInerney said yesterday in a statement announcing third-quarter results, as reported by Bloomberg. “Despite this setback, we remain steadfast in our commitment to transform this business.”
The loss of $844 million, the biggest since the Richmond, Va., firm was spun off from General Electric Co. in 2004, was driven by $531 million in pretax costs to increase long-term care reserves. That compares with a $300 million estimate from JPMorgan Chase & Co. Genworth also reduced goodwill at the long-term care unit by $167 million, citing higher claims and a reduced market size.
Genworth is the largest seller of long-term care coverage, and McInerney, 58, has been working to improve results at the operation since becoming CEO at the start of last year. He’s increased prices and tightened underwriting for the policies, which help pay for health aides and stays in nursing homes.
Read the full story at Bloomberg: Genworth CEO Sees Tough Turnaround From $844 Million Loss – Bloomberg.