Charlie456
Expert
- 88
I hear that since Genworth launched it's FLEX 3 sales ceased and they've decided to go back to a FLEX 2 type of product and pricing as quickly as possible.
So, what Does Everyone Think About Genworth's 180?
- Thread starter Charlie456
- Start date
- Thread starter
- #3
Charlie456
Expert
- 88
Of course I don't think it's odd that they want to sell some policies, and I'm glad they are looking to get serious about being the leader agian, but I'm surprised at their solution of going backwards. Especially since they felt so strongly about the need to change the policy and pricing so drastically in the first place. Just trying to wrap my head around it.
- Thread starter
- #5
Charlie456
Expert
- 88
Arthur Rudnick
Guru
- 1,652
originally posted by Charlie456
The party line of course doesn't read exactly like that. Genworth's claim is they're filing for a slight rate reduction and adding back in their informal care option to PC Flex 3 policies.
----------
And, here's the real story......................
Genworth Tumbles as CEO Sees Tougher Path After Record Loss (2)
2014-11-06 15:16:00.770 GMT
By Zachary Tracer
Nov. 6 (Bloomberg) -- Genworth Financial Inc. plunged the
most since the financial crisis as the insurer’s chief executive
officer predicted a tougher path ahead after posting a record
loss.
The stock lost 35 percent to $9.16 at 9:44 a.m. in New
York, erasing more than $2 billion of shareholder value.
Genworth yesterday posted a quarterly loss of $844 million,
driven by costs tied to its long-term care insurance operation.
CEO Tom McInerney today apologized for his prior remarks about
the business.
“The turnaround in this business will be more difficult
and prolonged,” McInerney said yesterday in a statement
announcing the results. “Despite his setback, we remain
steadfast in our commitment to transform this business.”
The loss was the biggest since the firm was spun off from
General Electric Co. in 2004. It was fueled by $531 million in
pretax costs to increase long-term care reserves, above the high
end of an 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.
“To state the obvious, Genworth’s third quarter 2014
earnings release does not paint an optimistic picture about the
state of its long-term care business,” Suneet Kamath, an
analyst at UBS AG, said in a research note today.
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.
Rate Increases
The firm said today that it weighed whether to wind down
long-term care and decided to stick the business because of the
prospects that regulators would approve rate increases on
coverage it sold in the past. Genworth said it’s stopped selling
new policies in Massachusetts, New Hampshire and Vermont,
because those states haven’t approved higher rates.
Larger rivals MetLife Inc. and Prudential Financial Inc.
have stopped selling long-term care insurance after results were
hurt by near-record-low bond yields and higher-than-expected
claims costs.
Genworth said in July it was reviewing whether it had set
aside enough funds to cover costs for policies sold in prior
years, amid higher-than-expected claims in the second quarter.
Yesterday, Genworth said it’s conducting additional reviews of
the long-term care business.
Credibility Damaged
“Genworth’s credibility has already clearly been
damaged,” Ryan Krueger, an analyst at Keefe, Bruyette & Woods
wrote in a research note. The results of the fresh review may
“further call into question the real economic value of the LTC
block.”
McInerney told investors in December that Genworth had
adequate reserves for long-term care coverage. In July, after
announcing the review, he said investors had gotten the wrong
impression from the earlier remarks and that he was speaking in
broad terms last year, without ruling out quarterly volatility.
Today, McInerney said he regretted his July comments.
CEO’s Apology
“I owe you an apology,” McInerney said on a conference
call discussing third-quarter results. “In trying to explain
the second-quarter LTC claim results relative to comments from
the December investor call, I made a misstep when my comments
shifted responsibility away from the company and me.”
Genworth also offers life insurance and annuities.
Operating earnings from life coverage fell to $13 million from
$54 million a year earlier, while annuities generated $26
million, up from $16 million.
The company recorded a goodwill impairment of $350 million
in the life-insurance business amid a change in strategy.
Genworth is scaling back from term life insurance while working
to sell more permanent products.
“Genworth’s third quarter results were poor and affirm our
cautious long-term view of the company,” Jimmy Bhullar, an
analyst at JPMorgan, said today in a research note. “We are
wary of the company’s sustained low returns, limited free cash
flow, and possible LTC reserve charge.”
McInerney said the global mortgage-insurance business was a
bright spot for Genworth. The unit, which operates mainly in the
U.S., Canada and Australia, posted an operating profit of $85
million, compared with $87 million a year earlier.
Genworth sold a 34 percent stake in its Australian mortgage
insurer in a May initial public offering, raising about $545
million. The company divested a minority stake in its Canadian
home-loan guarantor in a 2009 IPO.
The insurer said today that it will retain funds from the
Australia IPO, after previously saying the cash could be used to
pay down debt. Genworth will also stop sending dividends from
the life insurance unit to the parent. The firm said it won’t
achieve its leverage goals.
The party line of course doesn't read exactly like that. Genworth's claim is they're filing for a slight rate reduction and adding back in their informal care option to PC Flex 3 policies.
----------
And, here's the real story......................
Genworth Tumbles as CEO Sees Tougher Path After Record Loss (2)
2014-11-06 15:16:00.770 GMT
By Zachary Tracer
Nov. 6 (Bloomberg) -- Genworth Financial Inc. plunged the
most since the financial crisis as the insurer’s chief executive
officer predicted a tougher path ahead after posting a record
loss.
The stock lost 35 percent to $9.16 at 9:44 a.m. in New
York, erasing more than $2 billion of shareholder value.
Genworth yesterday posted a quarterly loss of $844 million,
driven by costs tied to its long-term care insurance operation.
CEO Tom McInerney today apologized for his prior remarks about
the business.
“The turnaround in this business will be more difficult
and prolonged,” McInerney said yesterday in a statement
announcing the results. “Despite his setback, we remain
steadfast in our commitment to transform this business.”
The loss was the biggest since the firm was spun off from
General Electric Co. in 2004. It was fueled by $531 million in
pretax costs to increase long-term care reserves, above the high
end of an 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.
“To state the obvious, Genworth’s third quarter 2014
earnings release does not paint an optimistic picture about the
state of its long-term care business,” Suneet Kamath, an
analyst at UBS AG, said in a research note today.
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.
Rate Increases
The firm said today that it weighed whether to wind down
long-term care and decided to stick the business because of the
prospects that regulators would approve rate increases on
coverage it sold in the past. Genworth said it’s stopped selling
new policies in Massachusetts, New Hampshire and Vermont,
because those states haven’t approved higher rates.
Larger rivals MetLife Inc. and Prudential Financial Inc.
have stopped selling long-term care insurance after results were
hurt by near-record-low bond yields and higher-than-expected
claims costs.
Genworth said in July it was reviewing whether it had set
aside enough funds to cover costs for policies sold in prior
years, amid higher-than-expected claims in the second quarter.
Yesterday, Genworth said it’s conducting additional reviews of
the long-term care business.
Credibility Damaged
“Genworth’s credibility has already clearly been
damaged,” Ryan Krueger, an analyst at Keefe, Bruyette & Woods
wrote in a research note. The results of the fresh review may
“further call into question the real economic value of the LTC
block.”
McInerney told investors in December that Genworth had
adequate reserves for long-term care coverage. In July, after
announcing the review, he said investors had gotten the wrong
impression from the earlier remarks and that he was speaking in
broad terms last year, without ruling out quarterly volatility.
Today, McInerney said he regretted his July comments.
CEO’s Apology
“I owe you an apology,” McInerney said on a conference
call discussing third-quarter results. “In trying to explain
the second-quarter LTC claim results relative to comments from
the December investor call, I made a misstep when my comments
shifted responsibility away from the company and me.”
Genworth also offers life insurance and annuities.
Operating earnings from life coverage fell to $13 million from
$54 million a year earlier, while annuities generated $26
million, up from $16 million.
The company recorded a goodwill impairment of $350 million
in the life-insurance business amid a change in strategy.
Genworth is scaling back from term life insurance while working
to sell more permanent products.
“Genworth’s third quarter results were poor and affirm our
cautious long-term view of the company,” Jimmy Bhullar, an
analyst at JPMorgan, said today in a research note. “We are
wary of the company’s sustained low returns, limited free cash
flow, and possible LTC reserve charge.”
McInerney said the global mortgage-insurance business was a
bright spot for Genworth. The unit, which operates mainly in the
U.S., Canada and Australia, posted an operating profit of $85
million, compared with $87 million a year earlier.
Genworth sold a 34 percent stake in its Australian mortgage
insurer in a May initial public offering, raising about $545
million. The company divested a minority stake in its Canadian
home-loan guarantor in a 2009 IPO.
The insurer said today that it will retain funds from the
Australia IPO, after previously saying the cash could be used to
pay down debt. Genworth will also stop sending dividends from
the life insurance unit to the parent. The firm said it won’t
achieve its leverage goals.
- 656
Genworth closed at $8.66 today, down another $5.41, or 38.45%
GNW Stock Price Today - Genworth Financial Inc. Cl A Stock Quote - Barrons.com
GNW Stock Price Today - Genworth Financial Inc. Cl A Stock Quote - Barrons.com
Arthur Rudnick
Guru
- 1,652
I think it's time to buy their stock.................
Genworth got smoked today. It is about time they get out of LTC. It doesn't benefit the shareholders when the company has no clear cut method to assess risk, manage risk, and price risk for new LTC business. If there was a clear cut method to manage and price risk, Genworth wouldn't be dependent on raising premiums in the future. Genworth's whole strategy is a prayer for raising rates to existing policy holders. That is wrong, and not reliable (regulatory risk). The shareholders want more. It is time for Genworth to get out of LTC, for the sake of the shareholders.
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.”
Similar threads
