December 4th, 2013
By Zachary Tracer
Genworth Financial Inc., the largest seller of long-term care coverage, is counting on periodic rate increases of 2 percent to 4 percent to maintain profit targets, after larger insurers retreated from the business to limit risk.
“I don’t think it’s prudent to be in this business unless you can, over time, re-rate policies to reflect the difference between how actual reality played out versus your original assumptions,” Chief Executive Officer Tom McInerney said today in an interview. “You have to ultimately have a return in the mid-teens range. If it’s less than that, on a risk-adjusted basis, investors shouldn’t invest in the business.”