UPDATE 1-Genworth earnings beat estimates; long-term care falters
* Fourth-quarter operating EPS $0.34 vs est $0.27
* Long-term care operating earnings fall 75 percent
* Shares down 2 percent after the bell
Feb 5 (Reuters) - Genworth Financial Inc's fourth-quarter profit topped Wall Street estimates but the insurer reported a sharp drop in earnings from long-term care insurance, sending its stock down 2 percent in trading after the bell.
Once part of General Electric Co, Genworth wrote generous long-term care policies offering long periods of coverage and cornered a chunk of the market.
Such policies have become less profitable and the payouts have exceeded underwriting expectations after interest rates hit rock bottom, hurting profit from the product.
Operating earnings at the business fell 75 percent to $7 million in the fourth quarter.
Genworth has been stepping up efforts to offset the fall in profit. It asked 49 states in December for permission to raise premiums on such policies.
The company has also filed for a new long-term care product that will include higher prices for unmarried women and use blood and lab test results when writing a policy.
Genworth is, according to trade group Limra, among the top five long-term care insurance providers, a product that is becoming increasingly popular as the U.S. population ages.
Larger peers Prudential Financial Inc, Metlife Inc have all stepped back from the business in recent years.
FOURTH QUARTER BEATS
Despite the steep drop in long-term care profit, Genworth's fourth-quarter results topped Wall Street expectations on higher income from its Canadian mortgage insurance business.
Net income available to common shareholders rose to $166 million, or 34 cents per diluted share, for the quarter ended Dec. 31, from $142 million, or 29 cents per diluted share, a year ago.
Net operating income rose to 34 cents per share.
Analysts on average had expected earnings of 27 cents per share, excluding items, according to Thomson Reuters I/B/E/S.
Operating income in its Canadian mortgage insurance business more than doubled to $114 million.
Losses at the troubled U.S. mortgage insurance business more than halved to $34 million.
Shares of the Richmond, Virginia-based company were down 2 percent at $9.00 in trading after the bell. They closed at $9.17 on the New York Stock Exchange on Tuesday.