So, what Does Everyone Think About Genworth's 180?

[VolAgent]

"Shareholders lost value. Policyholders gained security."

That is great, until the shareholders put management out on their rear and install new management that is more concerned with shareholder value.

Also, I don't buy the line that new policies are profitable. If so, why does Genworth need to avoid states that won't allow an rate increase on existing policies, no matter how old they are? Is it because they are afraid that when a future rate increase is needed, it won't be approved?

 

[scagnt83]

Not only are they NOT getting out of LTCi, they are more commited now than ever to LTCI. In 2015, they will be hiring about 100 new internal wholesalers JUST FOR LTCi.

It is only their older policy forms that have been unprofitable and on which they are seeking rate increases.

Their newer policy forms (2005+) are very profitable for them and they want to sell more of them.

By increasing LTCi reserves by $541 million, shareholders lost value, but policyholders gained security.

What's good for a policyholder is oftentimes bad for a stockholder.

Genworth did the right thing!

Their commitment to honoring their LTCi claims is evident.



"Shareholders lost value. Policyholders gained security."

Wow. Talk about lipstick on a pig.

That $541 million to increase reserves and in your words "gave value to policyholders" was paid for by the policy holders via rate increases. So the policyholders gave themselves more security, Genworth was just the one who had to go back and tell them they had their numbers wrong and needed more money to keep their promises.

They still lost $313 million due to the LTCI business if you take the reserve increase out.

The only reason they are profitable on their current business is because it has not matured yet to the point the old blocks of business have. We will not know the success of the new rate stability regs until the blocks start having significant claims against them.

And lets not forget the fact that they are considering winding down the whole LTCI operation. One minute the CEO says they have adequate reserves... then 6 months later suddenly they dont. Adding to reserves has nothing to do with commitment to future LTCI business. It means they are abiding by state insurance laws regarding reserves for existing policies.

Who cares if they are adding wholesalers. All this means is that they are trying to make a push for added revenue to offset the losses. Wholesalers are mostly paid on overrides of their district. So they are just one level above being as expensive as an agent to add to the sales force. This just means they are in need of new business, the rate decrease only proves that fact.

Think about it... they raise rates and lower benefits because of higher than expected claims... now the financials take a hit along with the stock... on top of that the CEO made misleading claims about the LTCI biz... and now suddenly they are reducing rates... it is pretty obvious that they are desperate for new revenue because of the reserve hit.

 

[Arthur Rudnick]

For whatever it's worth, a few comments:

It absolutely amazes me how the kool aide drinkers don't budge an inch.

Their newer policy forms (2005+) are very profitable for them and they want to sell more of them.

Then please explain why rate increases are being requested for policies written in 2012?

It's pretty ironic that this comes out during National LTC Awareness Month.
It seems that the only way carriers can be profitable today (not just Genworth, but all carriers) is if they add revenue by increasing rates.

"Shareholders lost value. Policyholders gained security."

What's good for a policyholder is oftentimes bad for a stockholder

At the end of the day, insurance companies answer to one group of people. It's not their policyholders, it's not their agents, it's their shareholders.

The bottom line is that carriers, after 40 years still have no clue how to price the product properly. Their ROI is well below what a public company requires. Pru & MetLife to name a few, exited the business because they could not make an adequate profit on LTCi.

Genworth, like other carriers say they are committed to the business. That is of course until they are no longer committed.

----------

Genworth is committed....

Genworth says it's committed to its LTCI business | LifeHealthPro

 

[VolAgent]

Genworth is committed....

Genworth says it's committed to its LTCI business | LifeHealthPro

And they'll keep saying that right up until they aren't...

 

[Mr_Ed]

The extent of ignorance on this board never ceases to amaze me.

 

[Arthur Rudnick]

previouly posted by Mr_Ed

The extent of ignorance on this board never ceases to amaze me.

We can finally agree on something.........

 

[scagnt83]

 

[Mr_Ed]

I have nothing better to do than to educate you, guys.
gimmeabreak.

 

[Charlie456]

Wow. Talk about lipstick on a pig.

Who cares if they are adding wholesalers. All this means is that they are trying to make a push for added revenue to offset the losses. Wholesalers are mostly paid on overrides of their district. So they are just one level above being as expensive as an agent to add to the sales force. This just means they are in need of new business, the rate decrease only proves that fact.

This isn't true at all. They are not mostly paid on overrides.

 

[VolAgent]

This isn't true at all. They are not mostly paid on overrides.

Semantics. They don't work for free and if their area doesn't show an increase in premium, they can expect to be looking for another job in short order. They can be salary or override, but they still cost money and they are still expected to increase premium in their assigned area.