Genworth on Review
- Thread starter Arthur Rudnick
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Arthur Rudnick
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originally posted by Mr_Ed
Just curious.......
Why do you take a published article from an impartial world-wide news organization (Bloomberg News) as a personal affront?
Just curious.......
Why do you take a published article from an impartial world-wide news organization (Bloomberg News) as a personal affront?
I didn't take it personally at all.
I'm just pointing out (through sarcasm) that the article isn't saying anything new or worthwhile.
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Arthur Rudnick
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originally posted by Mr_Ed
Nothing new or worthwhile????
How bout this:
1) (GNW) had its financial-strength ratings placed under review with negative implications after the insurer delayed the results of a review of long-term care reserves.
2) ‘‘A.M. Best’s expectations with regard to the timing of the completion of Genworth’s review of its long-term care insurance active life margins have not been met,” the ratings firm said today in a statement. “A.M. Best plans to meet with Genworth’s management team in the near term to discuss the results of the active life margin review and the potential impact on Genworth’s capital position.”
Now, to the layman, (like me) that appears to indicate that the $541 million that Genworth transferred into their LTC Reserves a couple of months ago may not have been enough.
And, if it's not enough, and they have to add another few hundred million dollars to satisfy AMBest in order to maintain any kind of viable financial rating, what say the shareholders?
I already know what you say:
"Don't worry, everything is lovey, dovy at Genworth and this is all being made up"
Nothing new or worthwhile????
How bout this:
1) (GNW) had its financial-strength ratings placed under review with negative implications after the insurer delayed the results of a review of long-term care reserves.
2) ‘‘A.M. Best’s expectations with regard to the timing of the completion of Genworth’s review of its long-term care insurance active life margins have not been met,” the ratings firm said today in a statement. “A.M. Best plans to meet with Genworth’s management team in the near term to discuss the results of the active life margin review and the potential impact on Genworth’s capital position.”
Now, to the layman, (like me) that appears to indicate that the $541 million that Genworth transferred into their LTC Reserves a couple of months ago may not have been enough.
And, if it's not enough, and they have to add another few hundred million dollars to satisfy AMBest in order to maintain any kind of viable financial rating, what say the shareholders?
I already know what you say:
"Don't worry, everything is lovey, dovy at Genworth and this is all being made up"
- 657
I had a Genworth client call me today very concerned about a discussion at a dinner party this weekend. The talk was about Genworth declaring bankruptcy in the near future.
I put her at ease best I could, but the point of my post is this:
To the consumer of Genworth products, namely long term care insurance, their perception is their reality. It doesn't matter what Art, Scott, or me think.
It's their policy, money spent, and financial future at stake.
Quite frankly, I'm not all that comfortable trying to make their concerns dissolve.
I guess I've been burned too many times drinking the company Kool-Aid.
I put her at ease best I could, but the point of my post is this:
To the consumer of Genworth products, namely long term care insurance, their perception is their reality. It doesn't matter what Art, Scott, or me think.
It's their policy, money spent, and financial future at stake.
Quite frankly, I'm not all that comfortable trying to make their concerns dissolve.
I guess I've been burned too many times drinking the company Kool-Aid.
Someone brings his car to the auto repair shop to get fixed.
The repairman estimates that it would cost $973 to fix the car.
When he goes back to pick up his car, the mechanic hands him a repair bill for $1,000. The owner of the car goes crazy, screaming and cursing the repair man threatening to report him to the Better Business Bureau.
Genworth had $19.7 Billion in their long-term care reserves earlier in 2014.
After their internal analysis of their claims trends (which they do every couple of years), Genworth concludes that they need to add $541 million more to their LTCi reserves. The $541 million was only a 2.7% increase in their LTCi reserves. (The same amount, percentage wise, as the extra $27 the repairman charged Arthur to fix his car.)
Even if Genworth has to add another $500 million to their LTCi reserves, that still amounts to only a 2.5% increase in their reserves.
Whooooopppppeeeeeeeeee!
That's why I originally posted: The sky is falling!
Regarding your comment "what say the shareholders" my answer is:
From a policyholder's standpoint and from a regulator's standpoint, whatever the shareholders say is irrelevant.
The shareholders can just sell their stock if they are not happy.
Policyholders come before shareholders.
Regulators come before shareholders.
The shareholders come last, even after the bondholders.
Again... "the sky is falling".
- Thread starter
- #8
Arthur Rudnick
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originally posted by Mr_Ed
I'm not sure where you took Business 101, but a public company answers to their shareholder first.
You can spin this anyway you want, but you are misinformed.
I'm not sure where you took Business 101, but a public company answers to their shareholder first.
You can spin this anyway you want, but you are misinformed.
I agree that a public company answers to their shareholders first.
But Genworth Life Ins. Co. is NOT a public company.
Genworth Life Ins. Co. is an insurance company that is a wholly owned subsidiary of a publicly traded holding company named "Genworth Financial".
And Genworth Financial must answer to their shareholders first.
But Genworth Life Insurance Company must put their policyholders first.
In profitable quarters, Genworth Life Insurance Company pays dividends to Genworth Financial. This past quarter Genworth Life Insurance Company did NOT pay any dividends to Genworth Financial because the money that Genworth Life Ins. Co. would normally pay in dividends to Genworth Financial had to go to Genworth Life Ins. Co.'s LTCi reserves.
Hence, the claims reserves take priority over sharing profits with the publicly traded holding company.
That is why I stated correctly: policyholders come before shareholders.
This is Insurance 101.
For you to be an insurance agent with about 20 years of experience and not know how insurance regulations protect policyholders is shocking. I'm going to faint.
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Arthur Rudnick
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originally posted by Mr_Ed
The issue is not about insurance regulations. I (and every agent) are well aware how policyholders are protected in the event that something hapens to the carrier.
If Genworth (or any other company) leaves the market or files for bankruptcy, insurance rules & regulations offer protection for the policiyholders.
But again, this is about a public company: GNW
But I repeat what I've said a number of times: a public company answers to their shareholders first. (even you stated that: "I agree that a public company answers to their shareholders first"). And, if in the case of Genworth, they are forced to dump additional hundreds of millions of dollars into their LTCi reserves and their credit ratings continue to dive, the shareholders will not be happy. Upset shareholders have in the past ousted CEOs and forced companies to divest themselves of unprofitable divisions.
Genworth Financial, Genworth Life Insurance...............
Doesn't matter, this entire conversation is about the future of Genworth's LTCi business.
The issue is not about insurance regulations. I (and every agent) are well aware how policyholders are protected in the event that something hapens to the carrier.
If Genworth (or any other company) leaves the market or files for bankruptcy, insurance rules & regulations offer protection for the policiyholders.
But again, this is about a public company: GNW
But I repeat what I've said a number of times: a public company answers to their shareholders first. (even you stated that: "I agree that a public company answers to their shareholders first"). And, if in the case of Genworth, they are forced to dump additional hundreds of millions of dollars into their LTCi reserves and their credit ratings continue to dive, the shareholders will not be happy. Upset shareholders have in the past ousted CEOs and forced companies to divest themselves of unprofitable divisions.
Genworth Financial, Genworth Life Insurance...............
Doesn't matter, this entire conversation is about the future of Genworth's LTCi business.
