News Column

New Genworth CEO Says He is Focused

Feb 7, 2013

John Reid Blackwell

The new chief executive officer of Genworth Financial Inc. held his first quarterly conference call with analysts and investors Wednesday, saying the company is pursuing the "right strategy and objectives" as it continues turnaround efforts after the housing market downturn.

Thomas J. McInerney, who joined the Henrico County-based insurance giant Jan. 1, said he is giving his immediate focus to improving operating performance, generating more cash and capital from the businesses, and increasing return on equity.

He also said he is focusing his time on the company's risk profile, in particular its long-term care insurance business, which he said "faces headwinds" because of a low interest rate environment and changing health care trends.

McInerney said in a statement Tuesday that he was disappointed with the results in the long-term care business, which showed narrowing profit in the fourth quarter. Genworth's overall net income rose to $166 million, or 34 cents per share, from $142 million, or 29 cents, a year earlier.

In a brief interview after the conference call, McInerney said he and his wife are now living in the Richmond area.

McInerney previously served in leadership roles with Dutch financial services company ING Groep NV and Aetna Financial Services.

"As far as the (Genworth) operations in Richmond, I would say that I am very impressed by the people here," he said. "I think they are very smart and talented and experienced and they work extremely hard."

McInerney also said he was pleased to see a housing recovery under way in the United States.

The company's U.S. mortgage insurance unit, which has been a drag on its financial performance for the past couple of years, saw operating losses narrow to $34 million in the fourth quarter from $96 million a year earlier.

McInerney and other executives reiterated that they believe the business should return to break-even or modest profitability later this year.

Profit in the long-term care insurance business dropped to $7 million in the fourth quarter from $28 million a year earlier. The company is seeking premium increases on some policies as low interest rates weigh on results.

"McInerney and his team still have plenty of work ahead of them in terms of improving the company's core life insurance and long-term care businesses," Mark Palmer, an analyst at BTIG LLC., wrote in a research note.

Bloomberg News contributed to this report


Distributed by MCT Information Services

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Source: (c) 2013 Richmond Times-Dispatch (Richmond, Va.)

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