Genworth’s MI Business Is Profitable Even as Parent Posts Record Loss for 3Q

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Genworth Financial Inc. posted a third-quarter loss of $844 million, driven by costs tied to its long-term care insurance operation.

However, CEO Tom McInerney said the global mortgage-insurance business was a bright spot for Genworth. The unit, which operates mainly in the U.S., Canada and Australia, posted an operating profit of $85 million, compared with $87 million a year earlier.

Genworth sold a 34% stake in its Australian mortgage insurer in a May initial public offering, raising about $545 million. The company divested a minority stake in its Canadian home-loan guarantor in a 2009 IPO.

“We remain encouraged by our global mortgage-insurance division performance, which continues to show strength,” McInerney said.

The loss at Genworth Financial was the biggest since the firm was spun off from General Electric Co. in 2004. It was fueled by $531 million in pretax costs to increase long-term care reserves, above the high end of an estimate from JPMorgan Chase Co. Genworth also reduced goodwill at the long-term care unit by $167 million, citing higher claims and a reduced market size.

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