Bad news for INVESTORS. Good news for POLICYHOLDERS.
OR: Shareholders lost value. Policyholders gained security.
Stock price (shareholder value and return) and claims paying ability (policyholder security) are two separate issues.
The reason for the downdraft in Genworth's stock price is actually a good thing for policyholders. The company put more than a half-BILLION dollars into its policyholder reserves. What I take from this is that instead of simply pursuing yet another round of rate increases (which take a long time), the company has taken a charge to earnings which hurts shareholders in the short run in order to keep promises to policyholders for the long run.
There may, or may not, be additional premium increases on older policies, but this should not be read as bad news for LTC policyholders, quite the opposite in my opinion.
From the web:
This information is not intended to be investment advice, nor a solicitation to buy or sell any particular stock or investment, but is presented as information about LTC insurance.
for older posts