A.M. Best Co. reiterated theissuer credit ratings ("ICR") of
Genworth Financial Inc. (
and all of its existing debt ratings.
Concurrently, the credit rating agency reiterated the financial
strength rating of 'A' (Excellent) and ICR of 'a' of Genworth
Life Insurance Company, Genworth Life Insurance Company of New York
and Genworth Life and Annuity Insurance Company, the primary
life/health subsidiaries of Genworth
The outlook for all ratings is negative.
The rating affirmations came on the back of the company's
consistency in delivering better operational performances as well
as growth in its life segment. Better operational performances were
backed by the company's strong market position in long-term care,
fixed annuities, life and wealth management besides favorable
operating company liquidity and adequate risk-adjusted capital.
The rating agency favors Genworth's divestments of less
capital-intensive products, product hedging, enhancement of
investment portfolio's credit standard and core statutory operating
However, A. M. Best is of opinion that the announcement to push
forward the partial initial publics offering of the Australian
mortgage business, sluggish sales in the international lifestyle
protection business and continued loss in the U.S. mortgage
business could weigh on the performance of life/health
The rating agency noted that there has been a remarkable change
in the company portfolio following the divestment of Medicare
supplement business and discontinuation of the individual and group
variable annuity business. These actions have lowered the company's
diversification of life/health business.
Also, the rating agency expects considerable inforce block of
long-term care to continually weigh on the earnings. Further, the
U.S. mortgage insurance business continues to incur huge losses,
though the magnitude has lowered. All these factors, combined, led
to a negative outlook.
Nevertheless, enhanced operating results across all lines of
business coupled with better interest coverage and risk-adjusted
capital maintained at present levels could trigger outlook
On the flip side, the outlook will be subject to downgrade if
operating results deteriorate, financial leverage increases,
coverage ratios worsen, credit impairments swell and risk-adjusted
In early May,
), which competes with Genworth was affirmed long-term counterparty
credit rating at 'A-' by Standard & Poor's Ratings Services.
The rating agency also affirmed long-term counterparty credit at
'AA-' and financial strength ratings on its subsidiaries. The
outlook was also revised to stable from negative.
Genworth carries a Zacks #3 Rank, implying a short-term Hold
rating, with no clear directional pressure in the near term.
GENWORTH FINL (GNW): Free Stock Analysis Report
METLIFE INC (MET): Free Stock Analysis Report
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