As the firm enters into restructuring plans, it has now ceased the sale of those policies until further notice.
Genworth Financial Inc. has now announced the suspension of some of its life insurance product sales, after having posted a Q4 loss for 2015, which meant that it had continued to lose money throughout every quarter of that year.
The company is now entering into restructuring plans in order to overcome its considerable financial challenges.
As a result of this announcement and as the insurer begins the planning for its restructuring, it has stated that the sale of many of its traditional life insurance products would be suspended. Also being put on hold will be the sale of its fixed-annuity products. This will begin within the current quarter of 2016. The goal of this strategy is to allow Genworth to place its focus on formulating a business unit that will offer long-term care coverage.
The life insurance, long-term care and fixed annuity business unit has been struggling with losses.
The long term care insurance unit is the branch that provides coverage for the cost of at-home assistance and nursing home care. That particular business has been struggling with considerable losses as the cost of covering policyholders has been greater than what had been predicted by the insurer.
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In the most recent earnings statement from Genworth, it explained its intentions “to initiate a series of internal restructuring actions aimed at separating and isolating its (long-term care) business, subject to regulatory and other potential third-party approvals.”
The insurance company is based in Henrico County, Virginia and has two locations there. Together, they employ over 1,000 people, as of August 2015. The announcement of the fourth quarter losses occurred on the heels of having taken charges within the life insurance division as well as from having sold its business in European mortgages. All told, the losses reported by the company came to $292 million, which was the equivalent to $0.59 per share, during last year’s final quarter. Comparatively, the last quarter of 2015 saw losses of $760 million, which translated to $1.53 per share, at the time.