Calls for long-term care policies are moving faster than Genworth Financial once again thought, but the Henrico-based Fortune 500 company says it is making progress on striking the right balance in a business that has largely been abandoned.
Meanwhile Another Richmond Fortune 500 company said: The increase in cigarette prices helped offset the impact of the slowdown in cigarette sales in the convenience store segment. Meanwhile, homeowners’ warnings about home improvement projects have caused sales of Henrico flooring companies to plummet.
Genworth said claims in the July-September quarter were $110 million above expectations. As a result, this segment of the business posted an operating loss of $71 million, compared with revenue of $26 million a year ago.
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Genworth Financial Inc. is at 6620 West Broad St. in Richmond.
Daniel Sangjib Min from TIMES-DISPATCH
Like few insurance companies that still offer long-term care insurance policies that help pay for nursing home or other long-term care, which often includes home health services, Genworth has seen a surge in claims. come more often and for larger amounts than expected while the amount Policyholders let their coverage end for less than they thought.
As a result, premiums are not in line with claims on the old policy. Meanwhile, newer policies are not built up quickly enough to provide necessary reserves as policyholders age. and began making more and more demands.
To address this, Genworth and other long-term care insurance companies that is still in use It has asked state regulators to increase double-digit and triple-digit premium percentages. At the same time, policyholders are asked to consider receiving reduced benefits to control premiums.
in the third trimester This resulted in states Approvals increased by an average of 56%, Genworth said in a presentation to Wall Street analysts, up from the same period last year when regulators approved an average increase of 38%.
A growing number of policyholders have also agreed to reduce their coverage benefits: 49% have done so, Genworth told analysts.
Henrico’s Genworth sees progress in long-term care
But the long-term care business remains under stress considering those policies haven’t seen premium rates increase since 2012. Genworth’s pre-tax loss widened from $786 million a year ago to 1.03. Billion dollars in third quarter 2023
An increase in approved premium rates means more policies will be added. That generated pre-tax income in the third quarter of $674 million, up from $619 million a year ago.
Those revenues are important because claims on Genworths’ older policies, on which the average policyholder is in their 80s, continue to process at more than $900 million per quarter, according to an analysis of data the company presented to analysts. Richmond Times’ Wall Street
Claims on policies where policyholders are age 70 increased from $689 million last year to $815 million in the 2023 quarter.
Overall, with revenue from its holdings of mortgage insurance company Enact, it offset some of the impact of the loss of long-term care. Genworth’s third-quarter profit fell 79% to $29 million.
Enact revenue helps the company reduce debt, which is a key goal.
Separately, Performance Food Group, another Fortune 500 company in the area, reported that higher cigarette and food prices have led to an increase in the company’s convenience store business unit.
But the number of boxes sent to convenience stores decreased, the company said.
Performance Food Group says sales to restaurants are up. This is because they reduce the price of the food they sell.
The Goochland-based Fortune 500 company said sales in the July-September quarter, its first fiscal year, rose 1.5 percent to $14.9 billion.
Snack food operations led the way, increasing 14.7% to $1.3 billion. But falling cigarette sales caused convenience store revenue to fall 0.8% to $6.3 billion. Sales to restaurants fell 0.7% to $7.3 billion.
Net income increased 26.1% to $120.7 million.
Meanwhile High interest rates and low consumer confidence continue to pressure homeowners’ interest in home improvements, Henrico County-based LL Flooring Holdings Inc. said.
Third-quarter sales fell 19.7% to $215.8 million, while losses widened to $36 million from a loss of $3.8 million a year ago.
4 non-investing questions to ask an advisor before retiring
What you should ask your advisor
Using a financial advisor for your investment needs is 100% brand dependent, but what about other parts of your retirement life? For example, one-third of people 64 and older have a financial advisor, but only 2% ask an advisor to help them choose Medicare, according to a July 2022 report from health care consulting firm Sage Growth Partners.
But Medicare and other topics non-portfolio, such as travel and long-term care It can affect your finances.
We are taking these ideas seriously to our customers. But there are still many advisors who aren’t, says Crystal Cox, a certified financial planner in Madison, Wis. They remain focused only on investments and portfolios.
Here are some questions to ask at your next meeting.
AP Photo/Elyse Amendola, File
1. What do I need to consider when deciding to retire?
Your life in retirement may not continue as it has in the past. Are you planning to travel? Do you intend to move to another state or downsize? How often do you want to buy a new car?
Most people just think I need some money to survive. Daniel Lash, CFP Officer in Vienna The State of Virginia said that various supplements That comes with living life? Everything you want to do?
Planning a retirement plan can help you and your advisor determine when and how you need the cash.
Do you have any idea where you will move to? And what is real estate like in the typical area? Lash says. Have they thought about retiring? No. What will I do when I retire?
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2. What should I know about Medicare?
Although you generally can’t sign up for Medicare until you’re close to 65, your income in previous years will affect what you pay for coverage each year. Both Medicare Part B and Medicare Part D are based. The premium is based on your reported adjusted gross income from two years ago, so if you file individually with income of more than $91,000 or file jointly with income of more than $182,000, you will pay more in each month
Because income is looked back on for Medicare expenses, adjust your plan accordingly. That’s because they’ll likely pay more in the first few years of retirement than in later retirement, Lash says.
You should also consider advice on general Medicare options, as sometimes you can’t change coverage later. If your health situation changes and Medicare becomes complicated We hold annual meetings with people who are experts in Medicare, Lash said. We invite all clients to attend.
AP Photo/Jenny Kane, File
3. Can I self-insure for long-term care?
People aged 65 now have about a 70% chance of needing long-term care. And it costs a fortune: $54,000. per year for a nursing home and nearly $95,000. For a shared room in a nursing home according to insurance information Genworths Company Cost of Care Survey 2021
Kevin Brady, a CFP officer in New York City, said: Some people are well enough to care for themselves. Others have more limited assets.
Whatever the case may be It is important to discuss potential costs. And see if you have the savings to manage those expenses. If you don’t, you’ll need to run the numbers on products like long-term care insurance. or a hybrid policy that combines permanent life insurance with an additional long-term care contract.
Always working with experts to make predictions and see what makes sense, Brady said.
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4. Do I have enough money to have fun?
A successful retirement isn’t always about physical things. For many, it’s a time to realize dreams of travel and other experiences. But spending too frugally can get in the way.
Often customers are overly cautious for fear of running out of money. But in this process Clients shorten their retirement experience, says Kevin Lum, a CFP in Los Angeles. That’s when they realize their abundance. They are too old to use it.
Talk to your advisor about your big wishes and whether you have enough money to spend a little before you decide to spend quietly.
Actual retirement spending appears more like a smile than a straight line, Lum said, with more spending at the beginning on things like travel and more spending at the end for long-term care needs. long
I’m not saying people should spend mindlessly, Lum said, but thinking about retirement spending as a static calculation that doesn’t change throughout retirement isn’t a smart idea.
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