Genworth Financial Inc. (GNW) named James Boyle to run its U.S. life insurance operation, as Chief Executive Officer Tom McInerney seeks to improve results at the country’s largest provider of long-term care coverage.
Boyle, 54, was previously president of John Hancock Financial Services Inc., the U.S. division of Manulife Financial Corp., Richmond, Virginia-based Genworth said today in a statement. As CEO of the division, he’ll oversee life insurance, long-term care and the annuities business.
Boyle brings “experience and expertise as we work to turn around our U.S. Life Insurance Division,” McInerney said in the statement. He will work with managers to “improve the profitability, financial strength, and capital generation of the division, and help accelerate the businesses’ return to growth.”
McInerney is concentrating on long-term care coverage and retirement products, after striving in 2013 to bolster the credit rating of the business that guaranties mortgages. Results at the life unit have been pressured by low interest rates and higher-than-expected costs on LTC policies, which help pay for home-health aides or residence in nursing homes.
“It’s not as simple as straight life insurance,” Mark Palmer, an analyst at BTIG LLC, said in a telephone interview before the announcement. “What they really need is someone who is sufficiently grounded in several areas of insurance such that they’ll be able to add value across multiple units.”
McInerney committed to LTC as rivals retreated from business. The company is counting on periodic long-term care coverage rate increases of 2 percent to 4 percent to maintain profit targets, McInerney said in a Dec. 4 interview.
Long-term care accounted for about 52 percent of revenue generated by Genworth’s U.S. life-insurance unit in the first nine months of 2013, according to a report from the company. Revenue for the unit included $1.63 billion in premiums and more than $800 million in investment income.
With more than 30 years in financial services, Boyle oversaw operations including LTC insurance and mutual funds at Hancock, according to the statement. A graduate of Boston College, he’ll work in Richmond and report to McInerney.
Investors and analysts didn’t hear much from McInerney in his first months on the job after joining in January 2013, Palmer said. McInerney was more vocal in the second half of the year after reviewing operations, according to the analyst.
“That’s a template for the new CEO of the life insurance business to come in and be able to spend some time identifying what the key issues are from a diagnostic standpoint before taking action,” Palmer said.
Boyle replaces Patrick Kelleher, whose departure was announced in October. He had worked at Genworth since 2007. McInerney served as CEO for the U.S. life unit in the interim.
McInerney assigned Georgette Nicholas in December as chief financial officer of the Australian mortgage-insurance unit, which is preparing for an initial public offering. She had been running investor relations. Paul Gomez, previously senior vice president of U.S. life insurance, was promoted in September to chief operating officer of the mortgage-insurance business in the country.
McInerney was previously the chief operating officer of ING Groep NV’s insurance unit. Genworth’s stock doubled in 2013, McInerney’s first year as CEO. The insurer fell 1.3 percent to $14.75 at 4:15 p.m. in New York.
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