Conseco Inc. today announced a whopping $406.8 million loss, or $2.20 a share, for the fourth quarter of 2008, and warned that it will be late in filing its annual statement with the Securities and Exchange Commission.
Investment losses drove the Carmel, Ind., carrier even deeper into the red than it was in the fourth quarter of 2007, when Conseco reported a loss of $71.5 million, or 38 cents a share.
Preliminary losses for the full year of 2008 stand at $1.08 billion, or $5.86 a share, compared with a loss of $194.0 million, or $1.12 a share, for 2007.
The company also reported $88 million in investment losses during the fourth quarter and $217.4 million for the full year, compared with losses of $23.8 million in the fourth quarter of 2007 and $79.5 million for the full year of 2007.
As for the delay in filing its annual report, Conseco said that it needs more time to finalize the analysis and disclosures related to its investment portfolio.
The carrier said that without this additional analysis, which is needed to satisfy its auditors’ concerns about Conseco’s liquidity and debt covenant margins, its auditors would have to include a paragraph on the annual statement discussing the company’s ability to continue as a “going concern,” or its ability to function as a business entity. Such a paragraph could constitute a default on the carrier’s senior credit facility.
Despite the negative results, Conseco said that its total new annualized premium for the fourth quarter rose to $101.6 million, a 16% gain from a year earlier. For the full year, that figure hit $432.6 million, up 4% from 2007.
At the end of last year, Conseco wrapped up its transfer of a book of about 164,000 long term care policies, once known as Conseco Senior Health Insurance Co. of Bensalem, Pa., to an independent
trust supervised by the state of Pennsylvania.
The move cut that book of business — which had dragged down Conseco’s profitability in previous years — away from the parent. It also raised the ire of consumers, attorneys and insurance commissioners in California, Florida and Washington, who feared that there wouldn’t be enough money in the
trust to support the needs of the policyholders.
