By Cyril Tuohy
Future growth opportunities for Genworth Financial, the life, mortgage and long-term care insurer, lie in selling life insurance to the middle market, long-term care insurance and the recovery of the housing market, according to president and chief executive officer Thomas J. McInerney.
McInerney, who spoke at his first annual shareholder meeting since he stepped into the corner office Jan. 1, said the company would focus on four key objectives for the rest of the year.
The company will concentrate on its operating performance, simplify its portfolio of products and services by exiting non-core businesses, generate more cash from operating units, and work to increase its financial strength in the eyes of the market and rating agencies.
He said he would challenge each of the company’s senior managers to manage each of the firm’s businesses within their control. Part of that strategy will include raising prices on insurance products as part of his strategy of managing through “discipline,” he also said.
A newly installed mortgage capital plan and the recovery of the housing market, along with the sale of the company’s wealth management business, will generate additional capital and strengthen the company’s balance sheet, he said. The company, which employs 6,300 people and went public in 2004, operates through three divisions: U.S. life insurance, global mortgage and other corporate businesses.
Earlier this year, the company reported net income of $103 million, or $0.21 per diluted share, compared with net income of $46 million, or $0.09 per diluted share, in the first quarter of 2012.
The rebound in the housing market helped first quarter profits more than double, and the company’s U.S. mortgage insurance business delivered its first quarterly operating profit since 2007, the company reported.
“We have made meaningful progress in recovering from the financial crisis,” McInerney said.
McInerney also said the company still had a long road ahead. Managers, employees and stockholders will have some difficult decisions to make in the future, but “we are prepared to do that,” he said.
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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