Genworth Financial

Genworth Financial is an S&P 400 insurance company. The firm was founded as The Life Insurance Company of Virginia in 1871.[5] In 1986, Life of Virginia was acquired by Combined Insurance, which became Aon plc in 1987. In 1996, Life of Virginia was sold to GE Capital.[6] In May 2004, Genworth Financial was formed out of various insurance businesses of General Electric in the largest IPO of that year.[7] Genworth Financial is incorporated in Virginia. [8]

Genworth Financial, Inc.
Public
Traded asNYSE: GNW (Class A)
S&P 400 Component
ISINUS37247D1063 
IndustryFinancial services
FoundedMay 2004
HeadquartersHenrico County, Virginia, United States
Key people
Tom McInerney (CEO) [1]
ProductsLong-term care insurance
Annuities
Mortgage insurance
RevenueUS$ 8.43 billion (2018)[2]
Total assetsUS$ 100.9 billion (2018)[3]
Number of employees
3,500[4] (2018)
Websitewww.genworth.com

Genworth Financial has three segments: Retirement & Protection, US Mortgage Insurance, and International. Products and services include life and long-term care insurance, mortgage insurance, and annuities.

Company history

A.G. McIlwaine was the company’s first president.[9] Begun by two dozen Petersburg investors, the Life Insurance Company of Virginia offered its first policies to local customers before expanding to Richmond, Virginia. Under general agent F.W. Chamberlayne, the Richmond Department attracted a large number of new clients. Within the first decade, the client base expanded beyond the South.

As the Life Insurance Company of Virginia grew, the headquarters were moved to Richmond, Virginia.[9] By the turn of the twentieth century, the company offered products through different divisions,. The “Ordinary Division” of the company offered whole life annuity options and related products, the “Intermediate Division” offered term life products, endowment policies, and limited payment policies, and an industrial division offered inexpensive products.

Colloquially known as “Life of Virginia”,[10] the company expanded its portfolio in the 20th century. Beginning with its first annuities business written in 1928, the company grew to include different mortgage insurance, lifestyle protection, and long-term care products and options.[11]

Over the following decades, the company has undergone several major acquisitions, beginning in 1986 when Life of Virginia was acquired by Combined Insurance for $557 million, which became AON Corporation the following year.[9] In 1995, almost a decade after the acquisition, GE Capital, the financial services unit of General Electric, announced its plan to buy most of AON Corporation’s life insurance business, including Life of Virginia.[12]

Under GE Capital, Life of Virginia became a part of GE Financial Assurance Holdings, Inc., before becoming GE Capital Assurance Company. The company was incorporated as Genworth Financial, Inc. on October 23, 2003,[13] formed out of several GE Capital insurance companies. On May 25, 2004, Genworth became a publicly traded company in the largest initial public offering (IPO) of 2004.[14]

GE sold its remaining stake in the company in 2006 for an estimated $2.8 billion.[15] In 2007, another GE Capital insurance company, First Colony Life Insurance Company, merged with Genworth Life and Annuity Assurance Company, one of the entities within Genworth Financial, Inc, also in 2007, Sun Life Financial bought the Employee Benefits Group (EBG) of Genworth Financial, putting Sun Life Financial on the top market for Employee Benefits programs. As of December 31, 2011, Genworth Financial, Inc. had more than 15 million customers in more than 25 countries.[16]

In 2009, Genworth held an IPO for its Canadian subsidiary, Genworth MI Canada, on the Toronto Stock Exchange, raising $850 million.[17]

On April 1, 2013, Genworth announced the completion of a legal entity reorganization, with the result being the creation of a new ultimate holding company. This restructuring separated the U.S. mortgage insurance subsidiaries from the overall firm.[18]

On October 24, 2016, China Oceanwide Holdings Group agreed to buy Genworth Financial Inc. for $2.7 billion.[19][20] As of August 2020, the deal remains pending.[21]

In May 2020, National Australia Bank has terminated its deal to acquire insurance for homebuyers from Genworth Mortgage Insurance Australia. The industry is vulnerable specifically to the anticipated increase of mortgage borrowers that are unable to reimburse their loan because of work cuts, with Genworth taking a $181.8 million write-down this month of expectation of further mortgages going wrong.[22] On 30 June 2020, Genworth Financial , Inc. has confirmed that it is going ahead with proposals to resolve its short-term commitments and debt responsibilities, while China Oceanwide Holdings Group Co., Ltd. (Oceanwide) is finalizing the investment strategy for Genworth 's takeover.[23]

Products and services

Life insurance was the company’s first product. As of December 2013, Genworth Life and Annuity Insurance Company and Genworth Life Insurance Company had over $728 billion insurance in force.[24]

Genworth Financial offers a range of products and services, including long-term care insurance and mortgage insurance. The long-term care business provides individual long-term care insurance, group long-term care insurance for employers offering benefits to employees, and caregiver support services.[25]

Prior to 2016, the company offered term life insurance, whole life insurance, universal life insurance, and index universal life insurance, as well as annuities, including fixed immediate annuities, traditional fixed deferred annuities, and fixed index annuities.[26][27] In 2016, the company suspended sales of annuities and life insurance, putting the existing books of business into runoff.[28][29]

Securities fraud lawsuits

On April 14, 2014, a class action lawsuit was commenced the United States District Court for the Southern District of New York against Genworth for "disseminating false and misleading statements to the investing public." [30] Another lawsuit was brought in the United States District Court for the Eastern District of Virginia on behalf of investors. On March 14, 2016, the Alberta Investment Management Corporation and the Fresno County Employees' Retirement Association reached an agreement in principle to recover US$219 million.[31] The lawsuit alleged that Genworth and certain senior executives made false and misleading statements about Genworth's long-term care insurance business and the company's financial statements between October 30, 2013 and November 5, 2014.[32]

Genworth MI Canada

Genworth MI Canada is the Canadian partially-owned subsidiary of Genworth Financial. It is the largest private-sector residential mortgage insurer in Canada (second largest overall, after the Canadian Mortgage and Housing Corporation).[33] Genworth MI Canada is listed on the Toronto Stock Exchange, but is majority owned by its US parent.[17]

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References
  1. "Executive Team". Genworth Financial, Inc. Newsroom.
  2. "2018 Annual Report - Genworth Financial, Inc" (PDF). Genworth Financial, Inc. Retrieved 2019-12-19.
  3. "2018 Annual Report - Genworth Financial, Inc" (PDF). Genworth Financial, Inc. Retrieved 2019-12-19.
  4. "2018 Annual Report - Genworth Financial, Inc" (PDF). Genworth Financial, Inc. Retrieved 2019-12-19.
  5. "Profile: Genworth Financial Inc (GNW)". Reuters. Retrieved 17 September 2013.
  6. Quint, Michael (27 December 1995). "GE Capital To Acquire An Insurer". New York Times.
  7. "US recorded largest number of IPOs in 2004 since internet bubble". AltAssets. Investor Networks Limited. 1 March 2005. Retrieved 17 September 2013.
  8. "10-K". 10-K. Retrieved 1 June 2019.
  9. "A Guide to the Life Insurance Company of Virginia Records, 1871-1920". Virginia Historical Society. Retrieved 27 October 2014.
  10. "Life Insurance Company of Virginia". Virginia Historical Society.
  11. "Genworth Financial 10th Anniversary Timeline" (PDF). Genworth Financial. Retrieved 27 October 2014.
  12. "GE Capital to Acquire an Insurer". New York Times. 27 December 1995. Retrieved 27 October 2014.
  13. "Genworth Financial Inc". CNN Money. Retrieved 27 October 2014.
  14. "DIGITAL DOMAIN; Google Shmoogle. The Biggest I.P.O's Went Unnoticed". New York Times. 29 August 2004. Retrieved 27 October 2014.
  15. "GE Sells Remaining $2.8 Billion Genworth Stock". Bloomberg. 27 February 2006. Archived from the original on 2 November 2014. Retrieved 27 October 2014.
  16. "Profile: Genworth Financial Inc (GNW)". Reuters. Retrieved 27 October 2014.
  17. "Genworth launches massive TSX offering". The Globe and Mail. 2009-06-30. Retrieved 2018-02-08.
  18. "A.M. Best Revises Outlook to Stable for Genworth Financial, Inc. and Its Key Life/Health Subsidiaries" (Press release). A.M. Best. 24 May 2013. Retrieved 17 September 2013.
  19. Carew, Rick (January 19, 2017). "China Oceanwide Consortium Clinches Deal to Buy International Data Group". The Wall Street Journal. New York. Retrieved January 22, 2017.
  20. "EX-99.1". www.sec.gov.
  21. Scent, Ben (August 14, 2020). "China's 1,400 Day Takeover Is the Deal That Refuses to Die". Bloomberg News. New York, NY. Retrieved August 14, 2020.
  22. "Genworth loses NAB insurance contract to QBE". The Sydney Morning Herald. 20 May 2020. Retrieved 12 June 2020.
  23. "Genworth Announces Merger Agreement Extension to September 30, Steps to Enhance Liquidity". PR Newswire. 30 June 2020. Retrieved 20 July 2020.
  24. "Buying life insurance: It starts here". Genworth Financial. Retrieved 17 October 2014.
  25. "Long Term Care". Genworth Financial. 13 November 2014. Retrieved 4 December 2014.
  26. "Prospectuses". Genworth Financial. 28 August 2014. Retrieved 4 December 2014.
  27. "Life insurance types and options". Genworth Financial. 29 September 2013. Retrieved 4 December 2014.
  28. News, Richmond Times-Dispatch and Bloomberg. "Genworth suspends life insurance sales, plans restructuring". NewsAdvance.com.
  29. "Genworth Stops Life, Annuity Sales, May Split". InsuranceNewsNet. February 5, 2016.
  30. Complaint http://www.classactionsnews.com/sites/default/files/pdfs/Genworth%20Financial%20Securities%20Fraud%20Class%20Action%20Complaint.pdf Archived 2016-03-15 at the Wayback Machine
  31. "Genworth Announces Settlement Of Securities Class Action Lawsuit". Genworth Financial, Inc. Newsroom.
  32. "AIMCo Secures $219 Million Recovery in Genworth". Alberta Investment Management Corp.
  33. "Genworth hit hard by new mortgage-insurance rules". The Globe and Mail. 2017-08-01. Retrieved 2018-02-08.
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