OLDWICK, N.J.--(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.
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