RICHMOND, Va., Sept. 18 /PRNewswire-FirstCall/ -- While it is not
Genworth's practice to comment on market rumors, Genworth believes that its
recent stock price performance does not reflect the fundamental condition of
The following information reflects Genworth's sound capital position and
-- Genworth currently has approximately $900 million of cash and cash
equivalents at the holding company and an additional $4.0 billion of cash and
cash equivalents in its operating company investment portfolios.
-- Genworth continues to optimize capital using reinsurance transactions
to fund excess life statutory reserves and to free up capital associated with
legacy low return life and annuity blocks as we have stated to investors.
Genworth has made strong progress in this area, completing new reinsurance
contracts in the third quarter generating $330 million of capital capacity,
and we are targeting completion of agreements generating between $400 million
and $700 million by year end.
-- In the U.S. mortgage insurance segment, management is comfortable with
the current capital position and the ability to absorb losses in the current
stressed market environment. Standard & Poor's affirmed the ratings of the
U.S. mortgage insurance company on September 11, 2008 and in that report
indicated that Genworth's U.S. mortgage insurance company's capital is in
excess of the AAA rating requirement and that over time the company is
expected to maintain its capital in line with the AA category. In order to
provide investors with additional information associated with performance with
the U.S. mortgage insurance business, Genworth will hold an investor
conference call on Thursday, September 25.
-- Genworth has excellent sources of liquidity including two $1 billion
revolving credit facilities and has diversified sources of additional capital
including earnings and capital from our strongly performing international
segment whose operating earnings will increase 10% in 2008.
-- Genworth has $158 million of commercial paper outstanding and as noted
above has more than adequate cash positions to absorb these maturities if
circumstances require. Genworth is not dependent upon the commercial paper
-- Genworth is comfortable with liquidity in its institutional business,
(which includes GICs and funding agreements) and in response to investor
inquiries, there are no ratings downgrade provisions in these contracts.
-- Genworth has continued to actively manage exposures in its investment
portfolio to reduce risk, and has provided market transparency to its
manageable positions in Fannie Mae, Freddie Mac, Lehman Bros., and AIG. Based
on market conditions at this time, Genworth expects third quarter gross
realized investment losses, including impairments, to be at or above second
quarter 2008 levels. However, Genworth does not expect gross realized losses,
including impairments, to have a material adverse effect.
-- Even in today's environment Genworth anticipates ending the year with
life company risk-based capital in the range of 325% to 400% with a target
level in excess of 350%, consistent with desired operating levels, and very
strong AA and above capital levels in U.S. mortgage insurance.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by words such as "expects,"
"intends," "anticipates," "plans," "believes," "seeks," "estimates," "will,"
or words of similar meaning and include, but are not limited to, statements
regarding the outlook for the company's future business and financial
performance. Forward-looking statements are based on management's current
expectations and assumptions, which are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict. Actual
outcomes and results may differ materially due to global political, economic,
business, competitive, market, regulatory and other factors and risks,
including the following:
-- Risks relating to the company's businesses, including interest rate
fluctuations, downturns and volatility in equity and credit markets,
downgrades in the company's financial strength or credit ratings,
insufficiency of reserves, legal constraints on dividend distributions by
subsidiaries, intense competition, availability and adequacy of reinsurance,
defaults by counterparties, legal or regulatory investigations or actions,
political or economic instability, regulatory restrictions on the company's
operations and changes in applicable laws and regulations, the failure or any
compromise of the security of the company's computer systems, and the
occurrence of natural or man-made disasters or a disease pandemic;
-- Risks relating to the company's Retirement and Protection segment,
including changes in morbidity and mortality, accelerated amortization of
deferred acquisition costs and present value of future profits, goodwill
impairments, reputational risks as a result of an announced rate increase on
certain in-force long term care insurance products, medical advances such as
genetic mapping research, unexpected changes in persistency rates, increases
in statutory reserve requirements, and the failure of demand for long term
care insurance to increase as the company expects;
-- Risks relating to the company's International segment, including
political and economic instability, foreign exchange rate fluctuations,
unexpected changes in unemployment rates, deterioration in economic conditions
or decline in home price appreciation, unexpected increases in mortgage
insurance delinquency rates or severity of defaults, decreases in the volume
of high loan-to-value international mortgage originations, increased
competition with government-owned and government-sponsored entities offering
mortgage insurance, changes in regulations, and growth in the global mortgage
insurance market that is lower than the company expects;
-- Risks relating to the company's U.S. Mortgage Insurance segment,
including increases in mortgage insurance delinquency rates or severity of
defaults, deterioration in economic conditions or a decline in home price
appreciation, the influence of Fannie Mae, Freddie Mac and a small number of
large mortgage lenders and investors, decreases in the volume of high
loan-to-value mortgage originations or increases in mortgage insurance
cancellations, increases in the use of alternatives to private mortgage
insurance (such as simultaneous second mortgages) and reductions by lenders in
the level of coverage they select, increases in the use of reinsurance with
reinsurance companies affiliated with the company's mortgage lending
customers, increased competition with government-owned and
government-sponsored entities offering mortgage insurance, changes in
regulations, legal actions under Real Estate Settlement Practices Act, and
potential liabilities in connection with the company's U.S. contract
underwriting services; and
-- Other risks, including the possibility that in certain circumstances
the company will be obligated to make payments to General Electric Company
(GE) under the company's tax matters agreement with GE even if the company's
corresponding tax savings are never realized and the company's payments could
be accelerated in the event of certain changes in control, and provisions of
the company's certificate of incorporation and bylaws and the company's tax
matters agreement with GE may discourage takeover attempts and business
combinations that stockholders might consider in their best interests.
The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information, future
developments or otherwise.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading public Fortune 500
global financial security company. Genworth has $114 billion in assets and
employs approximately 7,000 people in 25 countries. Its products and services
help meet the investment, protection, retirement and lifestyle needs of over
15 million customers. Genworth operates through three segments: Retirement and
Protection, International and U.S. Mortgage Insurance. Its products and
services are offered through financial intermediaries, advisors, independent
distributors and sales specialists. Genworth Financial, which traces its roots
back to 1871, became a public company in 2004 and is headquartered in
Richmond, Virginia. For more information, visit genworth.com.
SOURCE Genworth Financial, Inc.
CONTACT: Investors, Alicia Charity, +1-804-662-2248,
Alicia.firstname.lastname@example.org, or Media, Al Orendorff, +1-804-662-2534,
email@example.com, both of Genworth Financial, Inc.
Web site: http://www.genworth.com