(Bloomberg) -- Genworth Financial Inc. jumped in early trading after losses at the long-term care unit were narrower than some analysts had expected.
The insurer rallied 15 percent to $9 at 7:32 a.m. in New York. The Richmond, Virginia-based company had declined 8.1 percent this year through Tuesday.
Genworth posted a $760 million net loss, fueled by $478 million in costs to add to reserves for long-term care policies that the firm acquired before 1996, and set aside more funds at a New York unit, the company said late Tuesday in a statement. Long-term care coverage helps pay for home-health aides and nursing home stays.
“The charges and capital metrics that resulted from GNW’s LTC reserve review were in the ballpark of expectations and better than feared,” Ryan Krueger, an analyst at Keefe, Bruyette & Woods Inc., wrote in a note to clients, using the company’s ticker symbol.
Genworth Chief Executive Officer Tom McInerney also announced a plan to cut jobs to help save $100 million annually.
Larger life insurers such as MetLife Inc. and Prudential Financial Inc. have stopped offering the long-term care policies after being burned by higher-than-expected claims costs.
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
