Genworth Suspension Notice for MA & NH

[Mr_Ed]

originally posted by Mr_Ed



Let me guess............
You're comparing Genworth's financial situation with Exxon's?

Pretty lame, if you ask me.

Go ahead and let us hear you justify it.

In light of Exxon seriously considering leaving the oil business, after this plunge in oil prices, I think it adds more credence to your arguments about Genworth, Arthur.

 

[LGilmore]

In light of Exxon seriously considering leaving the oil business, after this plunge in oil prices, I think it adds more credence to your arguments about Genworth, Arthur.


Ed? Not that I have a dog in this fight, but that is really a stretch you're putting out there. Insurance companies DROP products all the time.

Years ago, when I was with NYL they offered 65 different products including group health. During my years with them the ended several insurance lines as they felt they weren't profitable. If you were an agent with business in those lines, well too bad.

If GW gets out of the LTC business isn't really known one way or the other. IF they can't get the rate increases they've applied for, they very well will shut down new business. Not like a situation like this is brand new.

1994 when WA state adopted the Clinton plan, I went from about 25 companies to sell health insurance from to 3, which were domiciled in WA. Everybody else left. So stuff happens, if a product is not profitable will they continue to sell it? And we're not talking about EXXON are we? Apples and Oranges.

 

[Arthur Rudnick]

originally posted by Mr_Ed

In light of Exxon seriously considering leaving the oil business, after this plunge in oil prices, I think it adds more credence to your arguments about Genworth, Arthur.

If I'm not mistaken, I think you used that same analogy years ago when IBM got out of the PC business. If I recall correctly, it was after either MetLife or Pru pulled out of the market.
Pretty weak comparison then and pretty weak comparison now.

You don't have to convince the board members how viable Genworth was/is/will be. The issue is convincing prospects who very often look at a company's financial ratings. And, please don't tell us that AMBest still rates them an 'A'.

How about the other rating agencies? How about the major financial articles last week in Bloomberg News & the WSJ? You're going to have a hard time convincing us that with Genworth, in spite of what's happened in the past week, it's business as usual.

 

[Mr_Ed]

originally posted by Mr_Ed



If I'm not mistaken, I think you used that same analogy years ago when IBM got out of the PC business. If I recall correctly, it was after either MetLife or Pru pulled out of the market.
Pretty weak comparison then and pretty weak comparison now.

You don't have to convince the board members how viable Genworth was/is/will be. The issue is convincing prospects who very often look at a company's financial ratings. And, please don't tell us that AMBest still rates them an 'A'.

How about the other rating agencies? How about the major financial articles last week in Bloomberg News & the WSJ? You're going to have a hard time convincing us that with Genworth, in spite of what's happened in the past week, it's business as usual.

When Pru and Met stopped selling LTCi, all the "journalists" predicted that it was the end of the long-term care insurance industry. And they were right. Not a single person has purchased a long-term care policy since Met and Pru pulled out of the market.





















****************************************
oops... minor correction.
since Met and Pru pulled out of the LTCi market only about 750,000 LTCi policies have been purchased (not including hybrids). In fact, sales went up the year after Met and Pru pulled out. Those commentators certainly can predict the future!

 

[Arthur Rudnick]

originally posted by Arthur Rudnick

You don't have to convince the board members how viable Genworth was/is/will be. The issue is convincing prospects who very often look at a company's financial ratings. And, please don't tell us that AMBest still rates them an 'A'.
How about the other rating agencies? How about the major financial articles last week in Bloomberg News & the WSJ? You're going to have a hard time convincing us that with Genworth, in spite of what's happened in the past week, it's business as usual.

originally posted by Mr_Ed

When Pru and Met stopped selling LTCi, all the "journalists" predicted that it was the end of the long-term care insurance industry. And they were right. Not a single person has purchased a long-term care policy since Met and Pru pulled out of the market.

Scott,
Instead of going off on your own agenda, why not address the issue at hand? No one said anything about the LTC industry closing up shop. The concern here is about the effects of the past week on the future viability of Genworth.

Exxon & IBM? Where do you get this stuff from?

 

[Mr_Ed]

originally posted by Arthur Rudnick



originally posted by Mr_Ed



Scott,
Instead of going off on your own agenda, why not address the issue at hand? No one said anything about the LTC industry closing up shop. The concern here is about the effects of the past week on the future viability of Genworth.

Exxon & IBM? Where do you get this stuff from?

Arthur,

Why is ADDING $541 MILLION dollars to long-term care insurance reserves bad for LTCi policyholders?

I would think that a consumer would be glad to have a policy with a company that put policyholders before stockholders.

And considering that the CEO is a very big stockholder, he took a HUGE hit in his personal wealth, yet he did what was right for the policyholders anyway.

What you don't seem to grasp, Arthur, is that the negative reports you're referencing are saying that it's a bad stock to own.

What's good for policyholders is often bad for stockholders. (e.g. adding $541 million to LTCi reserves).

Would you prefer to sell a company that screws policyholders?

Basically, by not applauding what Genworth has done, you're putting stockholders ahead of policyholders.

By not applauding Genworth's decision to take $541 million from profits and put it into LTCi reserves, you're siding with those in corporate America who want to screw policyholders and just reap profits from policyholders instead of paying claims.

Genworth has put paying policyholders' claims BEFORE corporate profits!

That says a helluva lot!

And everyone who believes in LTC insurance should be supporting Genworth's decision.

 

[Arthur Rudnick]

originally posted by Mr_Ed

Why is ADDING $541 MILLION dollars to long-term care insurance reserves bad for LTCi policyholders?
I would think that a consumer would be glad to have a policy with a company that put policyholders before stockholders.
And considering that the CEO is a very big stockholder, he took a HUGE hit in his personal wealth, yet he did what was right for the policyholders anyway.
What you don't seem to grasp, Arthur, is that the negative reports you're referencing are saying that it's a bad stock to own.
What's good for policyholders is often bad for stockholders. (e.g. adding $541 million to LTCi reserves).
Would you prefer to sell a company that screws policyholders?

OK Scott, I'll try just one more (and the last) time.
Here's are the points that you're missing.............

Point #1:
You obviously don't comprehend business.
Why did MetLife, Pru and dozens of other companies exit the LTC market? You can spin it anyway that you want, but the answer is that for major financial institutions, the ROI on a LTC division is not up to the standards of their other insurance divisions. Never has been and if history is any guide, probably never will. They may not have lost money on their LTCi division, but the amount of money they made was not what the company and their shareholders expect. Better off using that money on more profitable businesses.

Point #2:
You constantly keep saying that what Genworth did was good for the policyholders. That's only 1/2 of the story. The other half that you don't care to address (which is more important) is what's good for the policyholders is not always good for the shareholders. At the end of the day, the company (any public company) does not answer to their policyholders. They answer to their shareholders. (Please refer to Point #1)

Point #3:
"The negative reports that I'm referencing" are not reports that I wrote. I read them, thougt it was appropriate LTC news and started a thread in the LTCi Forum. I would think that for most people (as in consumers and potential purchasers of LTCi) the Wall Street Journal and Bloomberg News are fairly respected news organizations. This was published nationally and read by millions. I don't recall either article stating that Genworth was a bad stock to own. They were reporting on what happened to their stock price, the causes, the ramifications and the effects that all of this may have on Genworth's future business.

So, there you have it. In not one of your posts have you addressed any of these issues and I don't expect you to address them now.

 

[Mr_Ed]

originally posted by Mr_Ed



OK Scott, I'll try just one more (and the last) time.
Here's are the points that you're missing.............

Point #1:
You obviously don't comprehend business.
Why did MetLife, Pru and dozens of other companies exit the LTC market? You can spin it anyway that you want, but the answer is that for major financial institutions, the ROI on a LTC division is not up to the standards of their other insurance divisions. Never has been and if history is any guide, probably never will. They may not have lost money on their LTCi division, but the amount of money they made was not what the company and their shareholders expect. Better off using that money on more profitable businesses.

Point #2:
You constantly keep saying that what Genworth did was good for the policyholders. That's only 1/2 of the story. The other half that you don't care to address (which is more important) is what's good for the policyholders is not always good for the shareholders. At the end of the day, the company (any public company) does not answer to their policyholders. They answer to their shareholders. (Please refer to Point #1)

Point #3:
"The negative reports that I'm referencing" are not reports that I wrote. I read them, thougt it was appropriate LTC news and started a thread in the LTCi Forum. I would think that for most people (as in consumers and potential purchasers of LTCi) the Wall Street Journal and Bloomberg News are fairly respected news organizations. This was published nationally and read by millions. I don't recall either article stating that Genworth was a bad stock to own. They were reporting on what happened to their stock price, the causes, the ramifications and the effects that all of this may have on Genworth's future business.

So, there you have it. In not one of your posts have you addressed any of these issues and I don't expect you to address them now.

You obviously didn't read my summary:

Would you prefer to sell a company that screws policyholders?

Basically, by not applauding what Genworth has done, you're putting stockholders ahead of policyholders.

By not applauding Genworth's decision to take $541 million from profits and put it into LTCi reserves, you're siding with those in corporate America who want to screw policyholders and just reap profits from policyholders instead of paying claims.

Genworth has put paying policyholders' claims BEFORE corporate profits!

That says a helluva lot!

And everyone who believes in LTC insurance should be supporting Genworth's decision.

 

[Arthur Rudnick]

OK my friend, you win.
I'm going home now.
Have a good weekend everyone.........

 

[scagnt83]

Financial experts say, "It's clear the oil business is too risky. A 30% drop in prices in only 5 months can't be safe. For the sake of its stockholders, Exxon must leave the oil business soon."

.......

Some company insiders, speaking on condition of anonymity, suggested that Exxon follow Microsoft's lead and get into the software business. They stated, "At this pace of decline, crude prices will be less than a dollar per barrel by this time next year and Exxon will be forced out of the oil business anyway. Why not just get out of the oil business right now and switch to the much safer, more predictable software business."

In light of Exxon seriously considering leaving the oil business, after this plunge in oil prices, I think it adds more credence to your arguments about Genworth, Arthur.

I read the entire article twice.... it did not contain the above quotes about "insider info" of winding down the oil business....

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Your comparison does not hold water.

Exxon had a 0.80% drop in share price which put them slightly below Microsoft.
Yes they have skid in value over the past year, but it is in line with the price of oil (which will never be zero and will be needed for the next 100 years).
Which added up to a $47 Billion drop in market value.
Since Exxon has a $400 Billion market value, that was an 11% drop in value.

Exxon is still the 3rd largest company in terms of market value.
Exxon still has a AAA credit rating.
Exxon was not forced to unexpectedly divert the majority of the years revenue to ensure their product/services worked as promised.

----------

You obviously didn't read my summary:

Would you prefer to sell a company that screws policyholders?

Basically, by not applauding what Genworth has done, you're putting stockholders ahead of policyholders.

By not applauding Genworth's decision to take $541 million from profits and put it into LTCi reserves, you're siding with those in corporate America who want to screw policyholders and just reap profits from policyholders instead of paying claims.

Genworth has put paying policyholders' claims BEFORE corporate profits!

That says a helluva lot!

And everyone who believes in LTC insurance should be supporting Genworth's decision.

First, for that large of a reserve increase they were required to by law. State insurance laws require minimum reserve ratios, they were just abiding by the law.

Sure it benefited policy holders... but it was also partially paid for through rate increases... and it is the basic financial responsibility of an insurance company to maintain adequate reserves... so why put them on a high horse for just doing what they are required by law to do?

Also, by strengthening reserves it actually benefits shareholders in the long run. If GW cant fully pay claims then they would be of no value.

The problem is that GW did not realize their reserves were in need of that much cash injection.... or at least they kept it a secrete...


Second, I dont think Arthur or anyone else is saying that EXISTING policies are financially unsound. What we are saying is that the FUTURE EXISTENCE of GW LTCI NEW BUSINESS, is in question.

Existing policy holders are perfectly safe. The question is for how long will Genworth keep selling LTCI. We all know that you think they will until the end of time no matter what. But the reality is that businesses generally do not continue things that are unpredictable and that loose money (or have smaller than expected profit margins).