Mortgage insurance boosts Genworth Genworth mortgage insurance business gets a boost

<a href="https://www.genworth.com/" target="_blank">Genworth Financial</a>, the Henrico County-based insurance giant that is one of the few remaining players in the troubled long-term care insurance business, launched its effort to find a new way to meet customers' nursing home and home care needs during a first quarter that saw its long-term care insurance business swing into the red.

The quarter also saw a big boost for the company's longstanding basic hedge - its mortgage insurance operation, which tends to do well when interest rate and inflation trends hammer its long-term care insurance business.

The Federal National Mortgage Association, known as <a href="https://www.fanniemae.com/" target="_blank">Fannie Mae</a>, and the Federal Home Loan Mortgage Corp., called <a href="https://www.freddiemac.com/?gad=1&gclid=Cj0KCQjwr82iBhCuARIsAO0EAZyhCEN_CvY3BaECHCJ2Lcg0NgMbhnwMASaVtuvFRaqJIBdd98mXfxIaAqioEALw_wcB" target="_blank">Freddie Mac</a>, eased restrictions they had placed on this part of its business. Genworth efforts to cut its debt prompted the removal of those restrictions.

The net effect of a strong quarter for mortgage insurance and a rise in new long-term care claims, increased use of LTC benefit and more policyholders than expected dropping coverage was a 67.5% decline in first-quarter net earnings, to $62 million, as revenue slipped 2% to $1.85 billion.

Genworth's long-term care insurance business had an operating loss of $37 million, compared with operating income of $27 million the year before, as premium revenue rose 1.5% to $616 million.

Its requests for premium rate increases gained it $240 million, up by $30 million from the 2022 quarter. Those rate increases are needed to build up reserves for the large claims still to come as its policyholders age, Genworth has said.

In March, meanwhile, the company launched its Carescout services business, which it sees as a new approach to long-term care.

This new effort is starting as a digital platform that individuals can use to search for and compare nearby options for long-term care, based on a preferred network of providers. It should allow people to customize the care they want, instead of taking only that care that a policy covers.

As part of this effort at a new approach, Genworth is also looking at new ways for people to finance care, including funding options other than insurance.

The company's life insurance business, meanwhile, is still seeing higher than forecast death claims, though these are down from last year as the impact of COVID-19 eases.

Its mortgage insurance operating income rose to $143 million from $135 million, even though new insurance written declined 30% to $13.15 billion.

New delinquencies - the trigger for the insurance to kick in - increased 10% to 9,599.

<strong>Dave Ress</strong> (804) 649-6948dress@timesdispatch.com@DaveRess1 on Twitter