Reassurance for Canadians as life sales are halted

by Paul Lucas08 Feb 2016
A strong performance in Canada was not enough to prop up Genworth Financial Inc as it suffered extensive fourth quarter losses.

The company reported losses of $292million during the fourth quarter – around 59 cents a share. Indeed after revealing its results last week, the company slipped by 16 per cent during extended New York trading. Shares for the insurer have slipped by 25 per cent during this year alone, and by 80 per cent since 2013.

Its reaction was to suspend sales of both its fixed annuity products and traditional life insurance in the USA. Indeed its chief executive officer Tom McInerney has been attempting to stablise operations over the last few years since the insurer was hit with a $1.24billion loss during 2014 which was tied to its long-term care coverage.

“In our US life insurance businesses, we are actively pursuing multiple restructuring actions to separate and isolate our LTC business and narrow our commercial focus,” he said in the statement.

However, what about the Canadian market?

In significant contrast, Genworth MI Canada Inc enjoyed a net income during the fourth quarter 2015 of $98million or $1.03 earnings per fully diluted share. Over the full year, the company enjoyed total net operating income of $375million – that’s up from $366million during the previous year, representing a three per cent increase.

Lisa Azzuolo, vice-president of marketing and communications at Genworth Canada spoke exclusively to Life Health Professional to reassure Canadians that it would not be impacted by its majority shareholder’s misfortunes.

“As Genworth Canada is a mono line mortgage default insurance company in Canada, the recent actions by our majority shareholder, Genworth Financial Inc., to halt their life insurance and annuity lines of business do not impact Genworth Canada,” she said.

Her words were backed by Stuart Levings, President and CEO of Genworth Canada who said in a statement: “We are well-positioned to manage through current economic pressures and remain focused on maintaining a strong and balanced portfolio through prudent underwriting and strong lender relationships.”