Genworth Suspension Notice for MA & NH

[Mr_Ed]

Funny how you rip on GAs when you are one yourself.... but I guess who better to tell us about the BS from GAs than straight from the horses mouth...

I read the comment on multiple financial news outlets over the summer. And you need to work on your reading comprehension. I never said the comment was "we are stopping sales".

Board members make off the record operational comments to the financial press all the time.

Stopping new sales would do nothing for the old blocks. What it would accomplish is to stop possible future bleeding since they still have no clue if the new blocks are toxic or not. From a board members standpoint, why sell an iffy product when you have proven money makers you could push instead.


But dont worry Scott. Everything is just rosy in Genworths world. They will do so much revenue with the recent rate reductions and the 100s of new regional wholesalers that they will turn that junk bond rating into a AAA in no time....

who's Scott?

 

[scagnt83]

who's Scott?

Mr Ed... Mrs Ed... Never a Dull Moment... Scott... whatever you call yourself these days.

 

[Arthur Rudnick]

What Does Genworth's Bad News Mean for the Future of Long-Term Care Insurance?​

PERSONAL FINANCE 11/19/2014
Howard Gleckman Contributor

Last week, Genworth Financial, the dominant player in the traditional long-term care insurance market, acknowledged it is continuing to struggle to keep the product afloat. The firm announced it increased its reserves against future insurance claims by $531 million and said it is reviewing outstanding policies to determine whether it will have to take an additional charge before the end of the year. Its stock price plummeted by more than one-third (though it has rebounded a bit since) and the firm is facing enormous pressure from Wall Street to stop selling LTC policies.

What happened? In part, people are collecting more benefits than Genworth expected, and for a longer period– 2.9 years on average instead of 2.2 years. The number of people on claim for 4 years or more has increased by a steep 10-13 percentage points, the firm said. This is happening mostly with older policies.

At the same time, interest rates remain low, cutting the firm’s investment returns.

Overall Genworth’s long-term care insurance division posted a $361 million operating loss for the 3rd quarter. Individual sales revenue fell from $37 million a year ago to $28 million. Group sales fell from $3 million to $1 million. According to Bloomberg News, the investment firm Keefe, Bruyette and Woods values Genworth’s LTC business at a negative $750 million and assigns no value to new sales.

Genworth CEO Tom McInerney has bet his job on LTC insurance. When he was hired almost two years ago, the firm’s board urged him to dump the product. After a year-long review, he decided to keep it, convinced that a combination of new products and big rate hikes for unprofitable old policies would turn the business around.

He still could be right. If Wall Street and his board gives him the time he needs, he might be able to clean up those old policies and focus on selling new ones. But he’s found that fixing the free-standing LTC insurance business is more complicated, and will take more time, than he thought.

McInerney has aggressively tackled the problem. He’s raised premiums and toughened underwriting standards for new products. New offerings limit coverage to no more than five years, which would protect most purchasers but leave those with true catastrophic costs without insurance.

On top of its traditional coverage, Genworth has also started to sell relatively low-cost, low-benefit policies in an effort to keep premiums below $100-a-month. New plans include care coordination benefits as well.
Yet, the firm is still weighed down by those older policies.

He’s requested, and largely received, permission from state regulators to raise rates—often significantly. For some legacy policies, Genworth has asked for rate hikes of as much as 76 percent, and received approval for increases of as high as 47 percent. Genworth won’t sell in three states–Massachusetts, New Hampshire, and Vermont—that did not grant rate hikes.

And the firm has been lobbying state regulators to allow it to raise premiums by a modest amount each year—much like health insurers—so it would no longer have to ask for much bigger but less frequent rate hikes. McInerney won’t say whether any states have OK’d that change but he has consistently argued that without it, Genworth would withdraw from the business.

Many of Genworth’s competitors have left the market. Only about a dozen carriers—mostly mutual companies that do not have to face Wall Street investors– remain.

Genworth’s grim news raises several key issues for the future of LTC insurance:

Are we looking at a classic death spiral for free-standing LTC insurance, where policies appeal only to the highest-risk buyers and the resulting high premiums drive away the healthy consumers needed to keep the market functioning?

Given high premiums for traditional policies (Genworth says the average annual premium for a new policy that pays $154/day for four years is $2,400) are there viable alternatives to traditional LTC insurance? Are more affordable short-term, low-benefit policies a sensible option? What about so-called combo products that combine life insurance or annuities with long-term care coverage? Is longevity insurance an option?


Who will cover truly catastrophic LTC needs? If private insurance won’t, should government do so though some form of public insurance? In some sense it already does with Medicaid. But what are the fiscal consequences when those very long-term costs are so uncertain?

Is a voluntary free-standing insurance product viable at all? Or can this product only work if coverage is required, or at least strongly encouraged through a mix of government incentives?

Finally, without insurance, how are we going to pay for long-term care costs?

 

[scagnt83]

I dont know what your talking about Arthur. Everything is fine at Genworth.
Even though they raised new policy rates to ensure future solvency... and have now reduced them to increase revenue and offset losses from old policy lines... they will still have a AAA credit rating in no time!

 

[Arthur Rudnick]

originally posted by scagnt83

I dont know what your talking about Arthur. Everything is fine at Genworth. Even though they raised new policy rates to ensure future solvency... and have now reduced them to increase revenue and offset losses from old policy lines... they will still have a AAA credit rating in no time!

I report, you decide...................

 

[Charlie456]

I think the Forbes article was very fair and I'm happy to see Genworth's stock creep up a bit. Lots of the analysts haven't counted Genworth out and have faith in Mclerney’s ability to right the ship.

 

[Mr_Ed]

What Does Genworth's Bad News Mean for the Future of Long-Term Care Insurance?​

PERSONAL FINANCE 11/19/2014
Howard Gleckman Contributor

Last week, Genworth Financial, the dominant player in the traditional long-term care insurance market, acknowledged it is continuing to struggle to keep the product afloat. The firm announced it increased its reserves against future insurance claims by $531 million and said it is reviewing outstanding policies to determine whether it will have to take an additional charge before the end of the year. Its stock price plummeted by more than one-third (though it has rebounded a bit since) and the firm is facing enormous pressure from Wall Street to stop selling LTC policies.

What happened? In part, people are collecting more benefits than Genworth expected, and for a longer period– 2.9 years on average instead of 2.2 years. The number of people on claim for 4 years or more has increased by a steep 10-13 percentage points, the firm said. This is happening mostly with older policies.

At the same time, interest rates remain low, cutting the firm’s investment returns.

Overall Genworth’s long-term care insurance division posted a $361 million operating loss for the 3rd quarter. Individual sales revenue fell from $37 million a year ago to $28 million. Group sales fell from $3 million to $1 million. According to Bloomberg News, the investment firm Keefe, Bruyette and Woods values Genworth’s LTC business at a negative $750 million and assigns no value to new sales.

Genworth CEO Tom McInerney has bet his job on LTC insurance. When he was hired almost two years ago, the firm’s board urged him to dump the product. After a year-long review, he decided to keep it, convinced that a combination of new products and big rate hikes for unprofitable old policies would turn the business around.

He still could be right. If Wall Street and his board gives him the time he needs, he might be able to clean up those old policies and focus on selling new ones. But he’s found that fixing the free-standing LTC insurance business is more complicated, and will take more time, than he thought.

McInerney has aggressively tackled the problem. He’s raised premiums and toughened underwriting standards for new products. New offerings limit coverage to no more than five years, which would protect most purchasers but leave those with true catastrophic costs without insurance.

On top of its traditional coverage, Genworth has also started to sell relatively low-cost, low-benefit policies in an effort to keep premiums below $100-a-month. New plans include care coordination benefits as well.
Yet, the firm is still weighed down by those older policies.

He’s requested, and largely received, permission from state regulators to raise rates—often significantly. For some legacy policies, Genworth has asked for rate hikes of as much as 76 percent, and received approval for increases of as high as 47 percent. Genworth won’t sell in three states–Massachusetts, New Hampshire, and Vermont—that did not grant rate hikes.

And the firm has been lobbying state regulators to allow it to raise premiums by a modest amount each year—much like health insurers—so it would no longer have to ask for much bigger but less frequent rate hikes. McInerney won’t say whether any states have OK’d that change but he has consistently argued that without it, Genworth would withdraw from the business.

Many of Genworth’s competitors have left the market. Only about a dozen carriers—mostly mutual companies that do not have to face Wall Street investors– remain.

Genworth’s grim news raises several key issues for the future of LTC insurance:

Are we looking at a classic death spiral for free-standing LTC insurance, where policies appeal only to the highest-risk buyers and the resulting high premiums drive away the healthy consumers needed to keep the market functioning?

Given high premiums for traditional policies (Genworth says the average annual premium for a new policy that pays $154/day for four years is $2,400) are there viable alternatives to traditional LTC insurance? Are more affordable short-term, low-benefit policies a sensible option? What about so-called combo products that combine life insurance or annuities with long-term care coverage? Is longevity insurance an option?


Who will cover truly catastrophic LTC needs? If private insurance won’t, should government do so though some form of public insurance? In some sense it already does with Medicaid. But what are the fiscal consequences when those very long-term costs are so uncertain?

Is a voluntary free-standing insurance product viable at all? Or can this product only work if coverage is required, or at least strongly encouraged through a mix of government incentives?

Finally, without insurance, how are we going to pay for long-term care costs?

If you know anything about Howard Gleckman, this is the most POSITIVE article he's ever written about long-term care insurance.

 

[Charlie456]

If you know anything about Howard Gleckman, this is the most POSITIVE article he's ever written about long-term care insurance.

Yep, and it wasn't filled with inaccuracies.

 

[Arthur Rudnick]

Genworth CEO remains bullish on long-term care business​

November 19, 2014 10:30 pm
By JOHN REID BLACKWELL Richmond Times-Dispatch

Investors haven’t been happy lately that Genworth Financial Inc. remains in the long-term-care insurance business.
When the company reported an $844 million quarterly loss this month after it set aside $531 million in reserves for larger-than-expected claims in long-term care, Genworth’s stock plunged 38 percent in one day.
Yet Genworth President and CEO Thomas J. McInerney said Wednesday that the company is not ready to abandon long-term-care insurance, as some other insurance companies have done.
“We are under a lot of pressure from investors to just kind of throw in the towel,” McInerney said Wednesday during a talk at the University of Richmond’s Robins School of Business.
Instead, McInerney said part of his mission as the chief executive of the largest seller of long-term-care insurance is to bring about changes so the business can survive and continue to provide a private-market solution for an aging U.S. population.
“I think it can be fixed,” he said of the business model.
McInerney spoke to students, faculty and local business personnel as part of the business school’s “C-Suite Conversations” program, a series of question-and-answer discussions with business leaders. Richard Coughlan, the school’s senior associate dean, asked McInerney questions.
Long-term-care insurance provides coverage for nursing care and home health assistance. Policies have been sold since the 1970s.
But insurance companies such as Genworth got into the current financial problems with long-term-care insurance by misjudging three trends — the lapse rates, length of claims by policyholders and lower-than-expected returns on investment.
For instance, McInerney said insurance companies had expected in the 1980s that about 5 or 6 percent of the long-term-care policies they sold would lapse each year. Instead, the rate has been less than 1 percent.
Since he began as Genworth’s top executive in January 2013, McInerney said, he has spent much of his time meeting with governors and state insurance regulators across the country advocating for changes in how long-term-care insurance is regulated so that premiums can be more easily and modestly adjusted over time.
Genworth has been implementing higher premiums on some long-term-care policies to offset losses in the business, and McInerney said the company is only seeking to “break even” on older blocks of policies sold before 2002, which are producing losses for the company of more than $100 million a year.
McInerney called the sudden drop in Genworth’s stock price on Nov. 6 “an over-reaction” to a bad financial quarter, but he acknowledged that he could have done a better job communicating earlier with investors about the magnitude of challenges in the long-term-care business.
While he said it is best to manage a company with a view toward long-term results, he also acknowledged that Genworth’s volatile stock value in recent years has been difficult for shareholders.
“We probably need, in the next two or three years, to focus a lot more on shareholder value and shareholder returns because we haven’t done as good a job as we should have,” he said.
McInerney’s optimism about demand for long-term-care insurance lies in demographic trends.
He said only about 7.4 million of the 115 million Americans between the ages of 40 and 75 — the core market for long-term-care insurance — have a policy. Most baby boomers have not saved enough to cover nursing care costs that average about $88,000 a year nationally, he said.
The business “is very important for Genworth,” he said. “If we are not in the long-term-care business, we will be a much smaller company in Virginia.”
Most of the employees in the company’s division that handles life and long-term-care insurance work in Virginia, he said.
Genworth had the equivalent of 1,245 full-time employees in the Richmond area as of Jan. 1. The company also has a large operations center in Lynchburg.
McInerney said the negative attention focused on the long-term-care business recently has masked the more favorable trends in the company’s other businesses.
That includes its mortgage insurance business, which struggled during the housing market downturn but has since stabilized.
McInerney said Genworth’s stock price was about $5 per share when he joined the company, and he attributed about half of the subsequent run-up to more than $18 per share to improvements in the mortgage insurance business.
Genworth shares closed at $9.13 on the New York Stock Exchange on Wednesday.

 

[Mr_Ed]

Genworth CEO remains bullish on long-term care business​

November 19, 2014 10:30 pm
By JOHN REID BLACKWELL Richmond Times-Dispatch

Investors haven’t been happy lately that Genworth Financial Inc. remains in the long-term-care insurance business.
When the company reported an $844 million quarterly loss this month after it set aside $531 million in reserves for larger-than-expected claims in long-term care, Genworth’s stock plunged 38 percent in one day.
Yet Genworth President and CEO Thomas J. McInerney said Wednesday that the company is not ready to abandon long-term-care insurance, as some other insurance companies have done.
“We are under a lot of pressure from investors to just kind of throw in the towel,” McInerney said Wednesday during a talk at the University of Richmond’s Robins School of Business.
Instead, McInerney said part of his mission as the chief executive of the largest seller of long-term-care insurance is to bring about changes so the business can survive and continue to provide a private-market solution for an aging U.S. population.
“I think it can be fixed,” he said of the business model.
McInerney spoke to students, faculty and local business personnel as part of the business school’s “C-Suite Conversations” program, a series of question-and-answer discussions with business leaders. Richard Coughlan, the school’s senior associate dean, asked McInerney questions.
Long-term-care insurance provides coverage for nursing care and home health assistance. Policies have been sold since the 1970s.
But insurance companies such as Genworth got into the current financial problems with long-term-care insurance by misjudging three trends — the lapse rates, length of claims by policyholders and lower-than-expected returns on investment.
For instance, McInerney said insurance companies had expected in the 1980s that about 5 or 6 percent of the long-term-care policies they sold would lapse each year. Instead, the rate has been less than 1 percent.
Since he began as Genworth’s top executive in January 2013, McInerney said, he has spent much of his time meeting with governors and state insurance regulators across the country advocating for changes in how long-term-care insurance is regulated so that premiums can be more easily and modestly adjusted over time.
Genworth has been implementing higher premiums on some long-term-care policies to offset losses in the business, and McInerney said the company is only seeking to “break even” on older blocks of policies sold before 2002, which are producing losses for the company of more than $100 million a year.
McInerney called the sudden drop in Genworth’s stock price on Nov. 6 “an over-reaction” to a bad financial quarter, but he acknowledged that he could have done a better job communicating earlier with investors about the magnitude of challenges in the long-term-care business.
While he said it is best to manage a company with a view toward long-term results, he also acknowledged that Genworth’s volatile stock value in recent years has been difficult for shareholders.
“We probably need, in the next two or three years, to focus a lot more on shareholder value and shareholder returns because we haven’t done as good a job as we should have,” he said.
McInerney’s optimism about demand for long-term-care insurance lies in demographic trends.
He said only about 7.4 million of the 115 million Americans between the ages of 40 and 75 — the core market for long-term-care insurance — have a policy. Most baby boomers have not saved enough to cover nursing care costs that average about $88,000 a year nationally, he said.
The business “is very important for Genworth,” he said. “If we are not in the long-term-care business, we will be a much smaller company in Virginia.”
Most of the employees in the company’s division that handles life and long-term-care insurance work in Virginia, he said.
Genworth had the equivalent of 1,245 full-time employees in the Richmond area as of Jan. 1. The company also has a large operations center in Lynchburg.
McInerney said the negative attention focused on the long-term-care business recently has masked the more favorable trends in the company’s other businesses.
That includes its mortgage insurance business, which struggled during the housing market downturn but has since stabilized.
McInerney said Genworth’s stock price was about $5 per share when he joined the company, and he attributed about half of the subsequent run-up to more than $18 per share to improvements in the mortgage insurance business.
Genworth shares closed at $9.13 on the New York Stock Exchange on Wednesday.

scagent's general agent say it isn't true, therefore, this can't be true.