Voya, Unum, Genworth Earnings Calls

Voya Financial will save up to $130 million in annual expenses after the company sells its annuity business, chairman and CEO Rod Martin said Wednesday.

Once the annuity sale closes in the second or third quarter, the company will review its life insurance portfolio.

But it would be “premature to draw a conclusion that we’ve made any decision other than we are again going to examine every single thoughtful option,” Martin told analysts in a conference call.

The sale of Voya’s annuity business is expected to recast the company into a leaner and more nimble organization focused on institutional asset management, benefits and retirement.

Voya reported a first-quarter loss of $143.5 million, after reporting a profit in the same period a year earlier.

On a per-share basis, the New York-based company said it had a loss of 75 cents. Earnings, adjusted for non-recurring costs, came to 81 cents per share.

The results beat Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of 74 cents per share.

The retirement, investment and insurance company posted revenue of $2.21 billion in the period. Its adjusted revenue was $303.2 million, which also topped Street forecasts. Fourteen analysts surveyed by Zacks expected $293.8 million.

Unum Reassures Wall Street on LTC

Unum executives on Wednesday moved to reassure analysts that the company’s long-term care business is different from that of GE’s.

GE said in January that it would boost reserves by about $15 billion over seven years and take a $6.2 billion charge against the fourth quarter following a review and reserve testing for GE Capital’s run-off insurance portfolio.

The announcement led analysts to wonder if other insurers were adequately reserved to cover their respective long-term care businesses.

Large blocks of Unum’s long-term care business rest with group long-term care, not individual long-term care, said Unum CFO Jack McGarry.

Group long-term care is employer funded, follows conservative plan designs and paid premiums come with different lapse expectations, he said.

Unum has carried out two long-term care reviews, one in 2011 and another in 2014, compared with GE’s one-time review, McGarry said.

On Tuesday, Unum reported first-quarter profit of $273.5 million.

On a per-share basis, the Chattanooga, Tennessee-based company said it had net income of $1.23. Earnings, adjusted for non-recurring costs, were $1.24 per share.

The results fell short of Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $1.25 per share.

The insurance company posted revenue of $2.9 billion in the period, beating Street forecasts. Three analysts surveyed by Zacks expected $2.88 billion.

Unum shares have declined 13 percent since the beginning of the year, while the Standard & Poor's 500 index has decreased almost 1 percent.

Genworth Again Extends Termination Deadline

Genworth and China Oceanwide have agreed to extend to July 1 the deadline to terminate a previously announced merger agreement.

The extension, the fourth since the proposed merger was announced in late 2016, was filed with the Committee on Foreign Investment in the United States, or CFIUS.

The companies requested the extension due to delays in receiving state regulatory approvals, Genworth said.

Genworth, which sells mortgage and long-term care insurance, sees the merger as the best solution in facing the challenges in the long-term care market.

For China Oceanwide, the deal represents a foothold in the U.S., a market with millions of aging baby boomers looking for long-term care.

Genworth on Tuesday reported first-quarter earnings of $112 million.

The Richmond, Virginia-based company said it had net income of 22 cents per share. Earnings, adjusted for non-recurring costs, were 25 cents per share.

The financial services company posted revenue of $2.12 billion in the period. Its adjusted revenue was $2.15 billion.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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