Genworth Financial Inc., the insurer whose stock plunged more than 80 percent since the end of 2006, named Thomas J. McInerney as chief executive officer to stanch losses from insuring mortgages in the U.S.
McInerney, a former executive at ING Groep NV, replaces Michael Fraizer, who stepped down May 1, the Richmond, Virginia- based insurer said today in a statement.
Genworth is seeking to regain investor confidence as Moody’s Investors Service reviews whether to cut the company’s credit rating to junk status. The insurer needs to limit losses from backing U.S. home loans and is seeking to divest a stake in its Australia mortgage-insurance unit after delaying a plan this year for an initial public offering.
“The choice of McInerney was a solid one for Genworth, as the company clearly will benefit from having a seasoned executive with extensive experience in insurance,” said Mark Palmer, an analyst at BTIG LLC, in a note to investors.
Genworth climbed 36 cents, or 5.4 percent, to $7.08 at 10:14 a.m. in New York. The company had gained 2.6 percent this year through yesterday, compared with the 13 percent advance of the Standard & Poor’s 500 Index.
McInerney worked most recently as an adviser to Boston Consulting Group Inc., according to the statement. At ING, the largest Dutch financial-services company, he was chief operating officer of the insurance operation, responsible for a business with 425 billion euros ($552 billion) of assets and 35,000 employees, according to the statement. He previously was CEO of ING Americas, overseeing insurance, pension and investment- management businesses in the U.S., Canada and Latin America.
Sustaining Reputation
McInerney holds a bachelor’s degree from Colgate University and a master’s degree in business administration from the Tuck School of Business at Dartmouth College. Before working at ING, he was an executive at Aetna Financial Services.
“It is clear that everyone at Genworth is focused on sustaining its reputation for delivering high quality products and service,” McInerney said in the statement.
McInerney takes over as CEO and president, effective Jan. 1, and will be elected to the insurer’s board of directors. Chief Financial Officer Martin Klein has been acting CEO.