Enhances Company Focus on Leadership Positions
RICHMOND, Va., June 13, 2011 /PRNewswire via COMTEX/ --
Genworth Financial, Inc. (NYSE: GNW) announces it has reached an agreement to sell its Medicare supplement business and related blocks of in-force business to Aetna Inc. for $290 million. Genworth expects the total capital resulting from this transaction within its life insurance companies that will be available for redeployment to be approximately $240 million. The company will record an after-tax gain of approximately $35 million related to the sale and anticipates that the transaction will close in the fourth quarter of 2011, subject to customary closing conditions and adjustments, as well as regulatory approvals. Existing Medicare supplement policies will remain in effect following the transaction, and policyholders will continue to have access to the full benefits of their policies.
"This sale represents another step in executing our strategy to concentrate on leadership positions within our businesses," said Michael D. Fraizer, Genworth chairman and chief executive officer. "The transaction clearly benefits both parties, as it moves a sound platform to a company that is committed to the long term development of the Medicare supplement business, while allowing Genworth to focus our Retirement and Protection segment in markets where we have the strongest value propositions. Looking ahead, we continue to actively pursue strategies that free capital for targeted redeployment and enhance shareholder value over time."
The transaction includes the sale of Continental Life Insurance Company of Brentwood, Tennessee and its subsidiary, American Continental Insurance Company. It also includes reinsurance agreements between certain Genworth life insurance subsidiaries and Aetna to transfer the Medicare supplement in-force business sold by these Genworth entities.
The company will provide an update on the use of proceeds associated with this transaction on its second quarter 2011 earnings conference call.
J.P. Morgan Securities LLC advised Genworth on this transaction.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company with more than $100 billion in assets that is dedicated to helping people secure their financial lives, families and futures. Genworth has leadership positions in offerings that assist consumers in protecting themselves, investing for the future and planning for retirement -- including life insurance, long term care insurance, financial protection coverages, and independent advisor-based wealth management - and mortgage insurance that helps consumers achieve homeownership while assisting lenders in managing their risk and capital.
Genworth has approximately 6,500 employees and operates through three segments: Retirement and Protection, U.S. Mortgage Insurance and International. 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. From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of Genworth.com.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to our plans, objectives, expectations and intentions and other statements contained in this release that are not historical facts as well as statements identified by words such as expects, anticipates, intends, plans, believes, seeks, estimates, or words of similar meaning. These statements are based on our current beliefs or expectations and are inherently subject to significant uncertainties and changes in circumstances, many of which are beyond our control. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors.
SOURCE Genworth Financial