Genworth Financial Inc. is one of the doubling down on long-term care life insurance.
The company announced during its Quarter 4 2015 earnings report to investors it stop selling traditional life and fixed annuities. In an open letter, President and CEO David O’Leary says the decision will help the company prioritize a core part of the company’s business, individual and group long-term care (LTC) insurance.
"We believe that providing solutions that address the financial challenges of aging capitalizes on our expertise, experience and competitive strength," O’Leary writes. "Our society is aging and the need for caregiving is increasing, and we believe this market opportunity provides significant potential for profitable growth."
LTC insurance helps pay for nursing home and home-based healthcare. Many LTC insurers have been exiting the arena because of the lower interest rates weight on investment returns and higher payouts to policyholders who are living longer and have rising medical costs.
Genworth estimated it will spend $15 million pretax this quarter to restructure. The company reported an overall net loss of $292 million compared with a year-over-year loss of $760 million.
Genworth’s U.S. LTC insurance reported a net profit of $19 million in 4Q15, up from a net loss of $10 million in the 3Q15 and a net loss of $506 million year-over-year in 4Q14.