If what you indicated is correct, then there is a real Challenge for them to make $. Investment income for them as well as banks stink with low interest rate. What about the Insurance Guaranty Asso. Will they be looking at them under a micro scope? Just a lot of moving parts to manage.
As I mentioned in a much earlier post, I cannot imagine ANY buyers of the LTC or Life business. Genworth required Travelers to make some premium adjustments (price increases) before buying the business. I'm sure any potential buyer of the LTC business would want all rate increases done so they don't get bad press about raising rates. As for distribution, there are 50 to 70% fewer agents now than a few years ago, and all companies have distribution already, or they simply call up a few producer groups and have it if the company and product can be approved. Just because someone is licensed in the distribution system of Genworth doesn't mean they will just roll over and play nice with a new buyer. They are probably already licensed with the new buyer, which there won't be any. There have not been any buyers of any other company LTC business, and if someone is willing to buy the business, then there is no reason to sell it.
They are toast, they know it, are putting on their life jackets, and about to jump ship. The agents did already. Check out the past top LTC producers, they are now doing something else with another company.
I continue to day or weekly trade this stock, but will not hold longer. It is very predictable, down in the morning, slightly up in the afternoon. What a waste of a good company and product line. And can you believe they are going to reduce rates this Spring to buy some business? I don't know who is going to sell it.
Sidecar - Good comments - Why buy something the seller isn't breaking even on? Simple. Offer a lower price. Less than book. That would likely still monetize more value than the market has currently priced in. I'm not a CPA, but to my simple mind if a company en total is selling at less than half tangible book and a buyer offers 75% book, perhaps even realizing more considering reduced administrative overlap ... that would bring value to shareholders. Simplify the corporate structure. Clarify the mission. Make Genworth profitable again.
I hear you Joe. LTC is a part of Life – they’ll go together. With the LTC, any purchaser picks up the on-going rate request stick with the old blocks of business. Why buy something the seller isn’t even breaking even on?
Looking at the remainder of the life portfolio, what are you buying - product and distribution. Big negatives on both accounts. I’d been hoping GNW could have built up its product line but the $100mn austerity plan has taken precedent there. I just don’t see any real value in Life/LTC from a buyer’s perspective at present time.
So break them into two entities Mortgage and Life. With the weakened state of the Life Division I just can’t see that passing regulatory muster. Any regulator would have to be thinking about “receivership” and better to keep the cash cow attached to the calf.
And what adds to the frustration is the fact that there IS VALUE here, if only management could find a way to unlock it. Surely there are several private and publicly held ins companies that would be interested in Genworth's USMI, LIFE or even LTC, to wrap into their own existing lines.
I'm even wondering why an Icahn-type gadfly hasn't gotten involved here yet, value and price differential being what it is.
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Almost 50% of the distribution channel is the “game changer. Short of an “AIG-like” intervention how to recover. Sure, break up the company, extract value, bla-bla bla. Who’d buy the life division? Products are weak, distribution is devastated and there’s the little ongoing issue with LTC. Give it two years and GNW will consist of two divisions: mortgage and run-off. Sad, very sad.
The only positive, is the fact it is a better company then when it got to $1-$2 in 2008-2009. IMo, will not drop to that level. Before that happens GNW will sell. IMHo.
Thanks both of you for sharing your fortunate financial situation of you and your family's. It's unfortunate that over 70% of the population are not in your group. I've read where approx. 50% of population over 55 don't have $50,000 Of liquid assets. pretty scary rgarading their future.
Thank you so much for taking the time to read my post and sharing your opinion(s) about myself as well as your parents wonderful story. I surely do wish you and your family well. I would have thanked you for your thoughts sooner, but as I'm sure you must also know, my pants have been on fire, You have a great day too!
43% of the life divisions sales lost. Good to know, McInerney thinks it can be fixed, there's alot of fixin to do, he's got his work cut out for him, these ratings downgrades have significantly hurt the life division. Makes growing LTC sales difficult
From the 10Q Following the adverse rating actions after the announcement of our results for the third quarter of 2014, several distributors suspended distribution related to our U.S. Life Insurance Division’s products. Those distributors represented, in aggregate, approximately 18%, 16% and 9%, respectively, of 2014 sales of our linked-benefits, annuities and long-term care insurance products. We expect we will continue to be adversely impacted by recent rating actions. Any further adverse ratings announcements or actions likely would have, or intensify, the adverse impact of the direct or indirect effects discussed above (among others), all of which could have a material adverse impact on our results of operations, financial condition and business.
Both of my parents purchased LTC policies from Genworth. Unfortunately, my father passed (age 92) and never drew a nickel (100% profit for GNW).
My mother is in St George's Retirement in Roswell but keeps her home at Sea Island. We utilize helpers in both locations.
Of course, there is a ceiling on GNW exposure (i.e. what we can draw to assist her over her life time) so it is the "model" which had flaws. The ceiling (maximum exposure for Genworth) always existed.
Of course, there is no chance of a policy holder not receiving benefits (only of the carrier ceasing the sale of new policies) and the other poster (obviously, bearish despite alleging that he holds shares - simply lied).
Only an idiot would stop paying premiums on a vested policy. The poster (sellhighbuylow_27) has no understanding whatsoever, of the insurance industry, much less being an agent authorized to sell policies….
Maybe they're talking about the news organizations with their misleading headlines and articles...making it seem like it's a brand new never before seen/heard of news before yesterday.
The organizations probably know they screwed up today but it's too late and they're going to just not do anything to make themselves look bad and incompetent...no research before releasing the articles.
Since I sold in the $16.50-$17.25 range company has lost approx $5 billion of market cap. Not pretty. Still holding off to see where it settles.
Yes, but the vast majority of the value is in Australia & Canada. the u.s mi has so little
value right now compared to the others. the only way to destroy the value, would be to
sell more stock in the Canada and Australia companies (public companies, in which
Genworth is a majority holder) in order to put it in the dark hole of the LTC.
At this point, the MI holdings are higher than the market value of the company (I assume
cash at corporate is not much lower than corporate debt...).