In an unusual move for a
major US life insurer, Genworth Financial has announced that it is
to cease writing retail and group variable annuities (VA). The
insurer will, however, continue to write fixed
annuities.
In addition, Genworth
announced that it is suspending sales of a linked benefit product
which combines annuities and long-term care insurance.
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Commenting, Genworth chairman
and CEO Michael D Fraizer said: “With this decision, we have taken
an additional step in advancing our specialist strategy to
concentrate on the markets, customers and products where we have
distinct leadership positions and strengths.”
Specifically, Genworth will
focus on protection, wealth accumulation and mortgage insurance
products.
As a result of the
termination of VA sales, Genworth expects to record a pretax charge
of about $12m in the first quarter of 2011 for severance and
outplacement support of employees affected by the move.
Genworth is not a major
player in the US VA market, and in the third quarter of 2010
reported total VA sales of $151m, down 30.4% from sales of $217m in
the prior year quarter.
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By GlobalDataFinancial services
association LIMRA reported that VA sales in the US in the third
quarter of 2010 totalled $34.9bn, down 2% compared with the
previous quarter.
