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April 29 Mortgage and life insurer Genworth
Financial Inc reported a better-than-expected rise in
quarterly profit, helped by a near-doubling in income from its
long-term care insurance business.
Long-term care insurance assists people suffering from
chronic conditions by covering costs for extended care at home
or in assisted living facilities.
"Our mortgage insurance businesses benefited from improved
loss ratios, and long-term care premium increases continued to
positively impact earnings in our U.S. life insurance division,"
Chief Executive Tom McInerney said in a statement on Tuesday.
Net operating income in the company's U.S. life insurance
businesses rose 10.6 percent to $94 million in the quarter ended
March 31, with about $46 million coming from the long-term care
Income from the global mortgage insurance business rose
about 29.5 percent to $132 million.
Genworth, spun off from General Electric Co a decade
ago, had years ago written generous long-term care policies
offering long periods of coverage. However, the policies became
less profitable after interest rates hit rock bottom.
Since last year, Genworth has stepped up efforts to stem the
fall in profit by getting permission from states to raise rates.
Net operating income in Genworth's U.S. mortgage insurance
division rose more than 57 percent to $33 million.
Genworth and other mortgage insurers such as MGIC Investment
Corp and Radian Group Inc cover losses when
homeowners default and foreclosures fail to recoup costs.
The companies struggled after the housing bubble burst and
foreclosures soared during the financial crisis, leaving them
with large claims on unpaid home loans.
The recovery in the U.S. housing market, an increase in
timely repayments and fewer defaults are helping them recover
MGIC last week reported its highest quarterly profit since
2007, helped by lower delinquencies. Radian is expected to
report its quarterly results next week.
Genworth's Australian mortgage insurance unit, which filed
for an initial public offering last week, reported net operating
income of $62 million, up about 35 percent from a year earlier.
The IPO marks an important step for Genworth, which delayed
the IPO two years ago, citing unfavorable market conditions.
Genworth's net income available to common shareholders rose
to $184 million, or 37 cents per share, in the quarter, from
$103 million, or 21 cents per share, a year earlier.
Net operating income of 39 cents per share beat the average
analyst estimate of 35 cents, according to Thomson Reuters
Revenue was virtually flat at $2.32 billion.
Genworth shares were unchanged at $17.44 in trading after
the bell. The stock, which traded as low as $6 to years ago, has
risen more than 12 percent since the start of the year.
(Reporting by Avik Das in Bangalore; Editing by Savio D'Souza
and Ted Kerr)