A.M. Best Places Ratings of Genworth Financial, Inc. and Subsidiaries Under Review with Negative Implications
December 18 2014 - 5:26PM
Business Wire
A.M. Best has placed the financial strength rating of A
(Excellent) and the issuer credit ratings (ICR) of “a” of the key
life/health subsidiaries of Genworth Financial, Inc.
(Genworth) (Richmond, VA) [NYSE:GNW] under review with negative
implications. Additionally, the ICR of “bbb” of Genworth and its
existing debt ratings have been placed under review with negative
implications.
The under review status reflects that A.M. Best’s expectations
with regard to the timing of the completion of Genworth’s review of
its long-term care (LTC) insurance active life margins have not
been met. A.M. Best understands that the active life margin review
is taking more time than previously anticipated due to the
complexity of the underlying assumptions and the additional input
solicited by Genworth from third parties. A.M. Best notes that
Genworth’s active life reserves (ALR) are significant
(approximately $15 billion on a GAAP basis) and that margins are
very sensitive to changes in assumptions. A.M. Best has not
received any preliminary indications of a potential reserve
strengthening or any other financial information regarding the ALR
analysis. A.M. Best believes another significant LTC reserve
strengthening would place negative pressure on Genworth's
ratings.
A.M. Best plans to meet with Genworth’s management team in the
near term to discuss the results of the active life margin review
and the potential impact on Genworth’s capital position.
For a complete listing of Genworth Financial, Inc. and its
subsidiaries’ FSRs, ICRs and debt ratings, please visit Genworth
Financial, Inc.
The methodology used in determining these ratings is Best’s
Credit Rating Methodology, which provides a comprehensive
explanation of A.M. Best’s rating process and contains the
different rating criteria employed in the rating process. Best’s
Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Analyzing Insurance Holding Company
Liquidity
- Insurance Holding Company and Debt
Ratings
- Rating Members of Insurance Groups
- Risk Management and the Rating Process
for Insurance Companies
- Understanding BCAR for U.S. and
Canadian Life/Health Insurers
This press release relates to rating(s) that have been
published on A.M. Best's website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please visit A.M.
Best’s Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
A.M. Best CompanyKate Steffanelli, 908-439-2200, ext.
5063Senior Financial
Analystkathryn.steffanelli@ambest.comorAndrew Edelsberg,
908-439-2200, ext. 5182Vice
Presidentandrew.edelsberg@ambest.comorChristopher Sharkey,
908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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