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April 29 (Reuters) - 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 business.
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 losses.
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 I/B/E/S.
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