Genworth Financial (GNW) posted Q4 2015 results last week and the market’s reaction was once again irrational. He wrote an article for Seeking Alpha discussing our thoughts on the earnings release and call here:
The article was picked as for Pro Subscribers, so it will be behind a pay wall after an initial 30 day complimentary period. Below are the bullet points of the article.
- LTC reserve assumptions proved more than adequate as expected LTC margin grew 20+%.
- Australia and Canada mortgage insurance continued to perform exceptionally well.
- Announced halting of new life and fixed annuity products, which were immaterial and allows for $50M in expected annual expense reduction.
- Announced plan to isolate LTC from the rest of the business, a huge step towards an eventual split.
- One-time charge for universal life assumption changes is common in life insurance and not material compared to huge discount to net book value.