Genworth Financial Inc. offers long-term care insurance, private mortgage insurance and immediate annuities.
The company announced in October 2016 that it agreed to sell itself to a Chinese holding company for $2.7 billion, or $5.43 per share in cash. Genworth stockholders approved the acquisition in March 2017, but the transaction must meet certain conditions and get approval from regulators before the sale can close.
A.M. best financial strength rating: B (“fair”)
Genworth’s financial strength is “fair,” according to rating agency A.M. Best. An insurer’s financial strength rating is important because it indicates the company’s ability to pay claims.
Focus on long-term care insurance
Genworth was among the 20 largest life insurance companies by market share until February 2016, when it announced that it was suspending sales of life insurance and fixed annuities as part of a restructuring effort.
The company remains a major provider of long-term care insurance, which helps pay for assistance with routine daily activities at home or in nursing homes, adult day care centers and assisted living facilities.
Genworth produces an annual study of long-term care, which examines the median cost of services in various settings. The study provides national and state-by-state data, which can help with financial planning for long-term care.
Besides long-term care insurance, Genworth provides private mortgage insurance and immediate annuities.
Sold through lenders, private mortgage insurance enables borrowers to qualify for home mortgages when they have down payments of less than 20%. The insurance protects the lender in case the borrower defaults on the loan. Borrowers pay for the insurance as part of their monthly mortgage payments.
Genworth’s IncomeAssurance Immediate Need Annuity is designed for people 70 or older with health problems. A buyer pays a single lump sum to purchase the annuity, which provides a guaranteed monthly income stream until death. Buyers can use the income for anything, but the product is designed for people who need care and are worried about running out of money before they die.
Originally expected to close in 2017, the sale of Genworth to China Oceanwide Holdings Group was delayed, with a possible closing in 2018. Both companies said in November 2017 they remained committed to meeting the various conditions necessary to make the sale happen “as soon as possible.” The acquisition must et approval from the Committee on Foreign Investment in the United States as well as U.S. and Chinese regulators.
If the acquisition takes place, Genworth will be a standalone subsidiary of China Oceanwide Holdings Group Co. Ltd., headquartered in Beijing. Genworth’s senior managers will continue to lead the business from Richmond, Virginia.
China Oceanwide is a privately held financial holding group, including operations in financial services, energy, culture, media and real estate.
In a letter announcing the pending sale, Genworth president and CEO Tom McInerney said the company does not expect the transaction to impact existing policies and that Genworth would “continue to fulfill all policy obligations.”
As part of the acquisition, China Oceanwide has agreed to contribute $1.1 billion to reduce Genworth’s debt and help the company complete restructuring its life insurance business.