Low interest rates force Genworth to suspend sales of life insurance and fixed annuities

It was bound to happen sooner or later, and now that it has happened we should expect a great deal more of the same.  Genworth, the country's biggest seller of long term care policies, has been experiencing big losses in life insurance and annuities due to low interest rates.

While I have not examined the financial statements of Genworth, we have known for some time that insurance companies, perhaps including Genworth, have been offering terms that are better than implied by current interest rates in the expectation that low rates would not go on forever.  They are probably right because nothing goes on forever, but low interest rates have gone on a great deal longer than almost anyone expected and some insurance companies have locked in a lot of losses.

Genworth has thrown in the towel.  They are cutting their losses.  They have decided to stop throwing good money after bad.  So they are out of the life and  annuity business until further notice.

We should anticipate that other companies will follow suit.

Here is the article about Genworth.