Genworth Sees Rise in Profits in 4th Quarter
After months of focusing on cutting costs, Genworth Financial (GNW) reported their 4th quarter earnings today. The company saw an increase in profits and overall positive results during the quarter.
4th Quarter Profits
Genworth’s 4th quarter profits rose 24%, with a reported net income of $208 million, compared to a net income of $168 million in the 4th quarter of 2012. Increases across the board have proved the company’s cost tactics effective and led to more optimistic outlook.
The net operating income for this past quarter was $193 million, compared to $161 million during the 4th quarter of 2012.
The total net income for the year of 2013 was $560 million, compared to a much lower yearly net income of $325 million in 2012. Similarly, the total net operating income for the year was $616 million in 2013. Total net operating income was $403 million in 2012, showing a marked increase in the past year.
Tom McIrney, who took the reins of the company just last year, ordered a department review for the Long Term Care Insurance division and put his efforts towards alleviating the financial troubles that were afflicting the company when he stepped up as President and CEO.
“We made significant progress in 2013 accelerating the turnaround of Genworth,” said McInerney. “Our fourth quarter of 2013 results were strong and we are particularly pleased with the progress in improving our long term care insurance business and with the good operational performance in the Global Mortgage Insurance Division.”
The Long Term Care Insurance division is already seeing positive changes in terms of net operating income and other areas.
Genworth Long Term Care Insurance
The net operating income for the Long Term Care Insurance division in the 4th quarter of 2013 was $42 million, compared to $41 million in the previous quarter and a meager $7 million in the 4th quarter of 2012. The changes are due to increased premiums and higher priced products.
Sales of Long Term Care Insurance are still lagging behind, though, which is expected since sales of AARP brand products are no longer taking place. Sales of individual Long Term Care Insurance policies dropped to 24 million in the 4th quarter of 2013, compared to 37 million in the 3rd quarter and 60 million in the 4th quarter of 2012.
Sales of group plans also declined to 2 million in the 4th quarter of this year, from 3 million in the previous quarter and 4 million in the 4th quarter of 2012. Genworth has acknowledged the decrease in sales and is working on marketing resources to help get sales of policies back up.
Genworth has already started to file for regulatory approval of its Privileged Choice Flex 3.0 product and expects it to launch by the end of the first half of 2014.
The company also filed for a number of rate increases across the nation for Long Term Care Insurance policies. With these increases, Genworth hopes to achieve between $250 and $300 million in additional yearly premiums when all rate changes are fully effected. As of the last day of 2013, 41 states had approved rate increases, representing more than 2/3 of the expected premiums.
Genworth is the largest Long Term Care Insurance provider in the nation and sells both individual and group Long Term Care Insurance policies. Read the full press release for all 4th quarter results here.
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