Fitch: Genworth Financial Announces Upcoming LTC Review

CHICAGO--()--On July 29, 2014, Genworth Financial, Inc. (NYSE: GNW) announced that second quarter 2014 long-term care (LTC) results decreased by $66 million after-tax versus the prior year primarily from higher severity and frequency on new and existing LTC claims, according to Fitch Ratings. Further, the company announced that it would be conducting a comprehensive review of the adequacy of its LTC claim reserves during the third quarter of 2014.

Fitch's ratings on GNW consider the company's large exposure to the LTC insurance market, which continues to be challenged by under-performing legacy business and the ongoing low interest rate environment. While the current ratings assume some level of LTC earnings and reserve volatility, one of Fitch's previously established downward rating triggers for GNW was a material ($500 million or more) earnings charge from adverse development of LTC reserves. Depending on the size of any charges taken in the third quarter, Fitch may review the ratings of GNW and the review could result in a revision in the Outlook to Negative or a rating downgrade.

On June 3, 2014, Fitch affirmed the ratings on Genworth Life Insurance Company, Genworth Life and Annuity Insurance Company, and Genworth Life Insurance Company of New York (collectively, Genworth Life).

Fitch's current ratings are as follows:

Genworth Life Insurance Company;

Genworth Life and Annuity Insurance Company;

Genworth Life Insurance Company of New York;

--IFS at 'A-'.

Genworth Global Funding Trusts;

--Long-term rating at 'A-'.

The Rating Outlook is Stable.

Additional information is available on www.fitchratings.com.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology' (Nov. 19, 2013).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=723072

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Contacts

Fitch Ratings
Primary Analyst
Tana M. Higman, +1 312-368-3122
Director
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary Analyst
Douglas L. Meyer, +1 312-368-2061
Managing Director
or
Media Relations:
Brian Bertsch, +1 212-908-0549
brian.bertsch@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Tana M. Higman, +1 312-368-3122
Director
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary Analyst
Douglas L. Meyer, +1 312-368-2061
Managing Director
or
Media Relations:
Brian Bertsch, +1 212-908-0549
brian.bertsch@fitchratings.com