GE Risk From Reserve ‘Plague’ Worse Than Average, Fitch Says
- Long-term care ‘continues to be a risky product,’ analyst says
- Genworth and Unum also lag, report by ratings company finds
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General Electric Co. has “very high” exposure to the long-term care insurance market and is worse than average when it comes to the adequacy of reserves tied to those policies, according to Fitch Ratings.
Genworth Financial Inc., which was spun off from GE in 2004, and Unum Group also are below average, Fitch said Tuesday in a report that analyzed the assets backing reserves that fund future cash flows for long-term care businesses. GE said its current reserves are “well-supported” for its long-term care portfolio. Insurers in recent years have been burned by the policies, which pay for home health aides or nursing-home stays, amid higher-than-expected costs and low interest rates.