Shares of Genworth Financial tumbled almost 15 per cent in New York on Wednesday, following news that the insurer will hold onto some of its life and annuity business.
Shares of Genworth Financial tumbled almost 15 per cent in New York on Wednesday, following news that the insurer will hold onto some of its life and annuity business.
Tom McInerney, CEO of the Richmond, Virginia-based insurer, said in a conference call that the company will instead sell off blocks of life insurance contracts.
“There were lots of positives for doing the deal, including our ability to reduce debt,” McInerney said on the call. “In the end, our view was they were outweighed by potential adverse effects on the ratings, and the loss of earnings and diversification.”
Genworth has been working to reduce debt by a third to $2 billion, largely by selling parts or entire arms of its business holdings. McInerney said the company is considering the sale of several businesses, including the rest of an Australian business, parts of which have already been sold. No specific announcement was made about Genworth Canada.
The insurer reported a net loss of $93 million during its second quarter, mainly due to costs at a European lifestyle protection insurance business, which McInerney said the company is also planning to sell.
Genworth Financial was trading on the NYSE at $6.05 at 11:55 am on Wednesday, a 13.82 per cent drop from the opening bell. The company’s shares are off 30 per cent over the year, following a 45 per cent drop in 2014.
Tom McInerney, CEO of the Richmond, Virginia-based insurer, said in a conference call that the company will instead sell off blocks of life insurance contracts.
“There were lots of positives for doing the deal, including our ability to reduce debt,” McInerney said on the call. “In the end, our view was they were outweighed by potential adverse effects on the ratings, and the loss of earnings and diversification.”
Genworth has been working to reduce debt by a third to $2 billion, largely by selling parts or entire arms of its business holdings. McInerney said the company is considering the sale of several businesses, including the rest of an Australian business, parts of which have already been sold. No specific announcement was made about Genworth Canada.
The insurer reported a net loss of $93 million during its second quarter, mainly due to costs at a European lifestyle protection insurance business, which McInerney said the company is also planning to sell.
Genworth Financial was trading on the NYSE at $6.05 at 11:55 am on Wednesday, a 13.82 per cent drop from the opening bell. The company’s shares are off 30 per cent over the year, following a 45 per cent drop in 2014.
