|By John Reid Blackwell, Richmond Times-Dispatch, Va.|
|McClatchy-Tribune Information Services|
The company's U.S. mortgage insurance business showed its first quarterly operating profit since 2007.
It got another bump last week on news of the profit in the mortgage business. The stock is up about 40 percent this year but is still well below its historic high.
It was a good showing after just four months on the job for
McInerney was hired after a seven-month search by the company's board of directors to replace
"Of course, all of us at
"After 21 consecutive quarters of losses, achieving an operating profit of
Yet McInerney and other key leaders of the company told investors and analysts that there is much more work to be done to get
Executives maintained a cautious tone about the turnaround in the U.S. housing market, while reiterating that they expect the mortgage insurance business to be modestly profitable or to break even one or two quarters this year.
"All of us know that the U.S economy is not as strong as we would like it to be," McInerney said Wednesday after the quarterly conference call. "The housing market, while getting better, is connected to the overall economy and unemployment. Unemployment is getting better, but it is still stubbornly high."
While the company continues to work on a turnaround in its mortgage insurance business, McInerney said he also is focusing his attention on other operational and strategic goals, including reducing the company's debt, simplifying its business portfolio and improving performance in its other major business lines. Those include life insurance and long-term care insurance, which are facing pressures of their own.
"We are making progress," McInerney said. "But it is not a one-quarter job. It is going to take consistent execution."
McInerney, 56, brings to
Some of those who know and have worked with McInerney say he was a good choice for the top leadership role at
"He has got all the tools, the background and the years in the industry to make good and solid decisions about the business, and he has got the people skills to build teams, recognize talent and delegate," said
"I'd say he understood the insurance business (while he lived in
"I think, more importantly, he was the type of CEO who got out and visited customers and got out and visited the salespeople. He was very visible," said Comer, now a consultant.
Hilliard and Comer describe McInerney as down-to-earth but also intellectual, driven and competitive.
McInerney doesn't deny the competitive part.
A skier in college who still enjoys the slopes — and the golf course — McInerney said he inherited a competitive streak from his father, a
"My dad is a competitive person, and I think he pushed all of us pretty hard, but not too hard," McInerney said.
McInerney was born and grew up in
McInerney's parents still live in
"My dad was in the
McInerney jokes that he was probably destined from the start for a career in business management.
He studied economics at
Two years later, he took a leave to earn an M.B.A. with a concentration in finance and investments from the
Over the next 20 years, he worked in numerous roles, including as an assistant vice president in Aetna's investment management division, vice president of corporate planning and corporate finance, and senior vice president of sales and national accounts for
In 1997, he was named president of
"I am proud of the fact that I stayed at Aetna for over 20 years and made it all the way to president and CEO of a major division," McInerney said.
During his time at Aetna, McInerney helped turn around a struggling commercial mortgage insurance business for the company in the early 1990s.
Hilliard also credits McInerney with leading a smooth transition in 2000 after
From 2000 to 2006, he was CEO of
As CEO of ING Americas, he oversaw insurance, pension and investment management businesses in
It is too early in McInerney's tenure at
Yet it is clear the company has taken some important steps in its turnaround, Palmer said. That includes executing a plan earlier this year to isolate its mortgage insurance business, avoiding a downgrade of the company's bond ratings.
"And frankly, that was largely the work of
McInerney "has had insight on these sorts of issues throughout his career," Palmer said.
The changes the company is making, Palmer said, include "some pretty significant changes to the structure of its long-term care policies, because the policies it had previously offered did not have the kind of risk-reward profile that
Long-term care insurance provides coverage for home care and other assistance as people age or become disabled. The long-term care insurance business has faced pressure in a low-interest rate environment and because of rising health care costs.
To improve financial results,
"We have to talk to all 50 states," he said. "It is a very hands-on process."
The company has said it expects the rate increases, which could amount to as much as 50 percent on some older policies, to generate about
McInerney also acknowledged that the past few years have been difficult ones for
The company employs about 5,840 people worldwide now, but the pressures on the mortgage insurance business and the economic downturn forced the company to make job cuts in the
The company has the equivalent of 1,310 full-time employees in the
"I find our employees, including in
Asked whether the company expects staffing changes going forward, he said that is something that has to be evaluated on an ongoing basis.
"It is always the case that you need to look at the overall expenses and efficiency, and we will continue to do that over time," he said.
Comer said McInerney also was very involved in civic and charitable groups in
McInerney said he believes strongly in corporate involvement in the community and wants to promote that at
McInerney and his wife, Debbie, moved to the
"I think they all stayed away from insurance and investments because they thought it was very boring," McInerney said jokingly.
That's not the case for McInerney.
"I would say it is a business where we do a lot of good for people when they are at the toughest points in their life, and I have always found that to be very rewarding," he said.
(c)2013 the Richmond Times-Dispatch (Richmond, Va.)
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