GE's Insurance Unit Sees Earnings Drop

The mortgage insurance and other insurance-related businesses that General Electric hopes to spin off this year saw their net earnings decline by 24% during the first nine months of last year, according to new documents filed with the Securities and Exchange Commission. The mortgage insurance division of GE saw its net income decline by 20% during the period even though its revenues rose by 2%. The 'S1' statement that GE filed on the unit shows that GE Mortgage Insurance of Raleigh is the second best performer among the five insurance businesses that comprise the unit, which is called Genworth Financial. During the first nine months of 2003 Genworth, which boasts assets of $103 billion, earned $749 million. Even though the MI division saw its earnings decline it had a record year in 2002. The S1 notes that if Fannie Mae and Freddie Mac adopt policies to only do business with AAA-rated insurers, "our competitive position may suffer." GEMI, which is the nation's fourth largest MI out of seven firms, is rated AA.