OLDWICK, NJ, August 28, 2024–(BUSINESS WIRE)–AM Best has upgraded the Long-Term ICRs of Genworth Financial, Inc. (NYSE: GNW) and Genworth Holdings, Inc. (both based in Delaware) and their Long-Term IRs to ‘bb-‘ (fair) from ‘b+’ (marginal). The outlook on these ratings is stable. (See below for a detailed list of Long-Term IRs.)
In addition, AM Best affirmed the Financial Strength Rating (FSR) of B- (Fair) and the Long-Term ICR of “bb-” (Fair) of Genworth Life and Annuity Insurance Company (GLAIC) (Richmond, VA). The outlook on these ratings was revised to stable from negative. In addition, AM Best affirmed the FSR of C++ (Marginal) and the Long-Term ICRs of “b+” (Marginal) of Genworth Life Insurance Company (GLIC) (Wilmington, DE) and Genworth Life Insurance Company of New York (GLICNY) (New York, NY). The outlook on these ratings is stable.
GLAIC’s ratings reflect the strength of its balance sheet, which AM Best considers to be weak, as well as its adequate operating performance, limited business profile and adequate enterprise risk management (ERM).
GLAIC’s ratings also reflect weak risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s adequate operating performance reflects a trend of positive operating results over the past few years and has contributed to modest improvements in the BCAR score. AM Best will continue to monitor the company’s ability to improve its current balance sheet metrics.
The ratings of GLIC and GLICNY reflect their balance sheet strength, which AM Best considers to be weak, as well as their adequate operating performance, limited business profile and adequate ERM.
The ratings of GLIC and GLICNY also reflect their risk-adjusted capitalization, as measured by BCAR, and other capital metrics, which are low and volatile. Management continues to generate positive results by executing its strategy to achieve actuarially supported premium increases and reduce future benefit obligations for existing long-term care (LTC) policies. The interest rate environment is overall positive, albeit somewhat offset by higher costs as a result of inflation. The impact and timing of approval of premium increases continues to pose financial risk.
The rating upgrades of Genworth Financial, Inc. and Genworth Holdings, Inc. reflect recent positive operating earnings from their lower-rated operating businesses. However, AM Best notes that these companies depend on dividends from Enact Holdings, Inc. (Nasdaq: ACT) to service their debt, support the company’s capital allocation priorities of share repurchases, opportunistic debt reduction, and growth investments in CareScout.
The following long-term IRs were upgraded with stable outlooks:
Genworth Holdings, Inc. –
— from ‘b+’ (Marginal) to ‘bb-’ (Fairl) on USD 300 million senior unsecured notes bearing interest at 6.50% and due 2034
— from “b-” (Marginal) to “b” (Marginal) on USD 600 million of fixed/floating rate subordinated notes due 2066
The following indicative long-term IRs were upgraded with stable outlooks:
Genworth Holdings, Inc. –
— from ‘b+’ (marginal) to ‘bb-’ (fair) for senior unsecured debt
— from ‘b’ (marginal) to ‘b+’ (marginal) for subordinated liabilities
— from “b-” (marginal) to “b” (marginal) for preferred shares
Genworth Financial, Inc. –
— from ‘b+’ (marginal) to ‘bb-’ (fair) for senior unsecured debt
— from ‘b’ (marginal) to ‘b+’ (marginal) for subordinated liabilities
— from “b-” (marginal) to “b” (marginal) for preferred shares
This press release refers to credit ratings published on AM Best’s website. All rating information related to this publication and related disclosures, including the identification of the bureau responsible for assigning each credit rating mentioned in this press release, can be found on AM Best’s website. Current review activity Website. For more information on the use and limitations of credit rating opinions, see Guide to Best Credit Ratings. For information regarding the proper use of AM Best’s credit ratings, performance ratings, preliminary credit ratings and press releases, please visit Guide to the correct use of Best’s ratings and reviews.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company operates in over 100 countries and has offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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