Genworth Considers Strategic Options, Including Going Private
May 15, 2015 by Reuters
Life and mortgage insurer Genworth Financial Inc. is considering going private and would be open to selling its long-term care insurance unit, among other strategic options, Chief Executive Tom McInerney said.
McInerney said that, although Genworth would be open to selling its long-term care insurance unit, it could be difficult to find a buyer. Asked whether a sale of this business is possible, he said: “We are open to that but I don’t put much weight on that being something that’d be viable some time soon.”
Genworth’s shares rose as much as 11 percent on Wednesday.
The company, which was valued at about $4 billion as of Tuesday, controls 30-35 percent of the U.S. long-term care market.
Several insurers have exited the long-term care business in the past few years, bringing down the number of companies offering these policies to less than 20 currently from about 100 in 2002.
McInerney said in February that it was a mistake on the part of big insurers such as Metlife and Unum group to exit the business, which he considered to be attractive in the long run.
Genworth had also said at the time that the long-term care business remained “a priority.” Still, the business has weighed heavily on the company.
McInerney said on Wednesday that long-term care was a “very complex business” with “a lot of challenges.”
“But my view would be that it is very unlikely that anybody would be interested in that business at this point,” he told Reuters.
Long-term care insurance assists people suffering from chronic conditions by covering costs for extended care at home or in assisted living facilities.
McInerney also confirmed that Genworth was considering a sale of its life and annuity business.
Bloomberg reported earlier this month that Genworth was looking to sell Genworth Life and Annuity Insurance Co (GLAIC).
