Genworth Chief Cites `Urgency' With Share Plunge in Third Yearby
CEO McInerney says `there is much more work to do' at insurer
Insurer is working to fix long-term care, build mortgage unit
Genworth Financial Inc. Chief Executive Officer Tom McInerney said he’s moving with a “sense of urgency” to turn around the insurer after record losses and a stock plunge.
“I recognize there is much more work to do,” McInerney said in his annual letter, which was posted on the company’s website Friday. “We were very disappointed with the large decrease in our share price in 2015, and we continue to focus on improving our operating and financial performance.”’
McInerney is seeking to reassure investors after shares tumbled 27 percent in the first quarter following plunges of 56 percent last year and 45 percent in 2014. The Richmond, Virginia-based insurer was burned in 2014 by losses in its long-term care business, which pays for home health aides and nursing home stays. McInerney has sought to refocus the company by selling assets and working to isolate the LTC business from other operations, such as mortgage insurance.
He also suspended sales of traditional life insurance and fixed annuities, saying it was harder to attract customers for those products after the insurer was cut to junk by Standard & Poor’s in 2014. McInerney listed the reshaping of the life business among his top three objectives for 2016 as he works to cut costs. He also is seeking regulators’ approval for “significant” rate increases on the LTC products.
Building profit at the mortgage insurance unit is the other objective for 2016. The insurer nominated Fannie Mae’s former Chief Risk Officer John Nichols for its board, saying Friday in a regulatory filing that he’ll stand for election at the annual meeting in May.