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Genworth CEO: Mortgages a Drag until 2011

Genworth Financial's CEO doesn't see a return to profitability in its mortgage-insurance business until 2011.
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NEW YORK (

TheStreet

) --

Genworth Financial's

(GNW) - Get Report

stock advanced 2% Wednesday after the company's chief executive, speaking at its annual investor conference here, offered a cautious outlook, saying that one of the company's U.S. home-loan insurance units could return to operating profitability by the middle of 2011.

Last year, Genworth's mortgage-insurance business was beaten down by the housing crash.

Still, said CEO Michael Frazier, Genworth's mortage unit could produce return on equity of more than 20% as markets stage an eventual recovery.

The company showed some progress when it recorded a profit of $19 million in the three months ended Sept. 30, ending a streak of five quarterly losses in a row.

Genworth still has to deal with further delinquencies. It expects delinquincies on U.S. mortgages written between 2006 and 2007 to peak next year, but the insurer is working to blunt those losses, Frazier indicated, according to newswire reports.

After earlier trading in the red, shares of the Richmond, Va., firm closed Wednesday at $11.31, up 22 cents, or nearly 2%, on light volume.

Among other insurance stocks Wednesday,

AIG

(AIG) - Get Report

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edged higher by 2 cents to $28.95,

Manulife Financial

(MFC) - Get Report

lost 3 cents to $17.60, and

Lincoln National

(LNC) - Get Report

jumped 4.4% to $23.09.

-- Written by Andrea Tse in New York

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