By Cyril Tuohy
Genworth Financial reported net income of $141 million, or 28 cents a diluted share, compared to $76 million, or 16 cents per diluted share, in the year-ago period due to a rebound in the housing market and price increases in the long-term care market.
The quarter’s results also were helped by $6 million of income from the sale of its wealth management business and through the elimination of 400 positions announced in June, the company also said.
“We are beginning to see good results from our efforts to improve the operating performance of the businesses with strong performance in Global Mortgage Insurance, further progress on long-term care insurance rate actions and execution of an expense reduction plan,” president and chief executive officer Tom McInerney said in a statement.
Operating income from the company’s U.S. Life Insurance division, which includes life, long-term care and fixed annuities, increased by $15 million to $79 million compared to the year-ago period due to strong results in long-term care and fixed annuities, the company reported.
Income from life insurance dropped by $3 million to $27 million in the second quarter compared to the year-ago period, the company said, due to flat sales in term life insurance and sales declines in universal life.
Genworth also said it is planning pricing and product changes to its life insurance line.
Income from long-term care insurance was $26 million, up $12 million from the year-ago period due to lower incurred losses, higher premiums for coverage and the trimming of benefits, the company also reported.
More than 80 percent of long-term care policyholders have indicated they will pay higher premiums and only 1 percent of customers have indicated they would drop their policies, McInerney also said in a conference call with analysts.
A change in the way the company is calculating interest for long-term care policies has meant a lower loss ratio compared with a year ago. Income from the company’s U.S. and foreign mortgage insurance operations reported operating income of $102 million, an increase of 100 percent from $51 million in the year-ago period, the company also said.
The mortgage insurance business was powered by a turnaround in the U.S. mortgage insurance unit, where the company posted income of $13 million compared with a loss of $25 million in the year-ago period.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].
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