Following news last week that Genworth Financial was restructuring after continuing losses in its life insurance and annuities lines, it's now announcing layoffs in those lines, and some other areas as well.Genworth has notified 330 employees that they're being dismissed, according to an email to Best's News Service from spokeswoman Julie Westermann.
She said 220 workers in Lynchburg, Virginia; 70 in Richmond, Virginia; and others "scattered around the country" will be let go.
"Most of the jobs support the sale of life insurance and annuities, although there are some other jobs involved as well," Westermann wrote. "Most employees received at least 60 days' paid working notice of layoff."
The layoffs follow the disclosure that Genworth was stopping further sales of its money-losing life and annuity products, and focusing instead on its profitable long-term care and mortgage insurance lines.
Its life insurance business posted a fourth-quarter 2015 net operating loss of $173 million, compared with income of $1 million in 2014, and an $80 million loss for 2015 versus income of $74 million in 2014. Annuity net operating income for the fourth quarter 2015 fell to $19 million from $23 million the year before.
On Feb. 9, A.M. Best downgraded the financial strength rating to B++ (Good) from A- (Excellent) of Genworth's main underwriting units. The downgrade reflects "the uncertainty and material execution risk of obtaining the required regulatory approvals associated with Genworth's recent strategic announcement" to restructure.
Additionally, A.M. Best expressed concern over the company's intention to "become even more heavily concentrated in long-term care business, which A.M. Best views as one of the least creditworthy insurance products in the market presently."