RICHMOND, Va. (WTVR) - One of Richmond’s leading Fortune 500 employers is announcing a major shake-up in leadership.
On Wednesday, Genworth Financial said that its chairman and chief executive officer, Michael D. Fraizer, was stepping down.
The board has named Martin P. Klein the acting chief executive officer until the position can be filled.
The resignation comes on the heels of the company’s quarterly report that show another decrease in revenue from this time last year.
Genworth reported a first-quarter profit of $47 million in 2012, compared to $59 million in 2011.
Revenue also fell to $2.4 billion in 2012 from $2.5 billion at this time last year.
Genworth employs 1,300 people locally and more than 6,000 worldwide. It is a leading Fortune 500 insurance holding company and operates through three divisions, including Insurance and Wealth Management, Global Mortgage Insurance and the Corporate and Runoff Division.
Jamie Cox, a managing partner at the Harris Financial Group, says Genworth’s weaknesses continue to be caused by the lagging housing market and low interest rates.
“When the Federal Reserve lowered interest rates…that flattened out the yield curb and flattened out all insurance companies ability to make money,” says Cox. “That has companies like Genworth, who are in a capital hold to begin with, it’s made it more difficult for them to climb back out.”
But Virginia Chamber President and CEO Barry DuVal sees a brighter future for the company. DuVal and financial insiders say Genworth’s long-term care and life insurance divisions, which are operated out of Richmond, are thriving with the baby boomer generation reaching retirement.
“We think their profits are still strong and from all outside indications, they’re going to do well in the Commonwealth of Virginia.”
While Genworth would not comment on speculation there could be layoffs, Cox adds that Richmond could be spared because of future prospects in the long-term care and life insurance divisions.
“Those are traditional insurance businesses that are very profitable and if they can really focus on them, it will help them earn their way out of trouble.”