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Insurance executive named Genworth CEO [Richmond Times-Dispatch, Va.]

By John Reid Blackwell, Richmond Times-Dispatch, Va.
McClatchy-Tribune Information Services

Dec. 12--Genworth Financial Inc. named a longtime insurance industry executive to be its chief executive officer as the Henrico County-based insurance company continues its efforts at a turnaround.

The appointment of Thomas J. McInerney comes a little more than seven months after Genworth's founding CEO and chairman, Michael Fraizer, resigned as the company's U.S. mortgage insurance business' continued to struggle with the fallout from the housing downturn.

McInerney, 56, will take over as president and CEO on Jan. 1 and will get a seat on Genworth's board, the company said.

"We are very pleased to have someone with Tom McInerney's breadth of experience and record of achievement step into this role at Genworth," James S. Riepe, the company's non-executive chairman, said in a statement.

Genworth shares rose Tuesday 2.7 percent to $6.90 on the New York Stock Exchange, after the company announced McInerney's appointment.

Shares in the Fortune 500 company, which fell precipitously during the recession, have inched upward since late October, when company leaders announced a strategic plan that is expected to include the sale of some business units.

McInerney has a long history in financial services, Genworth said, including executive roles with Dutch financial services company ING Groep NV and Aetna Financial Services.

Most recently, he served as an adviser to Boston Consulting Group Inc., a business-strategy advisory firm with global operations.

At ING, McInerney was chief operating officer and a member of the management board for insurance, responsible for the worldwide insurance and investment management businesses that included $553 billion in assets and 35,000 employees.

Before that, he served as CEO of ING Americas, overseeing insurance, pension and investment management businesses in the United States, Canada, and Latin America.

"The choice of McInerney was a solid one for Genworth, as the company clearly will benefit from having a seasoned executive with extensive experience in insurance," Mark Palmer, an analyst at BTIG LLC, wrote in a note to investors.

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Genworth, one of the Richmond region's largest employers, is seeking to regain investor confidence as Moody's Investors Service reviews whether to cut the company's credit rating to junk status.

McInerney joins the company as Genworth has seen some narrowing in the losses in its mortgage insurance business. The unit has lost money on an annual basis since 2008, posting a $513 million operating loss in 2011 and a $106 million operating loss in the first nine months of 2012.

Genworth also sells life and long-term care insurance, but the losses in its mortgage insurance business have led some investors to push for a separation of that unit from the company.

However, Genworth executives have said they see a slow turnaround in the housing market and expect the mortgage insurance business to return to profitability in 2013.

Executives, including Marty Klein, who has served as interim CEO since Fraizer's departure, have maintained that a sale or spinoff of the business is not in the company's best interests at this time.

Instead, the company in late October outlined plans that could include a sale of its international protection and wealth-management businesses over the next two to three years.

Klein will return full-time to his role as chief financial officer. Riepe will continue to serve as the company's non-executive board chairman.

jblackwell@timesdispatch.com

(804) 775-8123

Bloomberg News contributed to this report.

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(c)2012 Richmond Times-Dispatch (Richmond, Va.)

Visit the Richmond Times-Dispatch (Richmond, Va.) at www.timesdispatch.com

Distributed by MCT Information Services

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