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AM Best Raised Genworth Life Insurance Company’s (GLIC) long-term issuer credit rating (Long-Term ICR) from ‘b’ (marginal) to ‘b+’ (marginal) and affirmed its C++ (marginal) financial strength rating (FSR). did. ) (Wilmington, Delaware) and Genworth Life Insurance Company of New York (GLICNY) (New York, NY). The outlook for these credit ratings is stable. In addition, AM Best upgraded its long-term ICR from Genworth Financial, Inc. (Genworth) from ‘b’ (marginal) to ‘b+’ (marginal). [NYSE: GNW] and Genworth Holdings, Inc., and their related long-term problem credit ratings (long-term IRs). (Both companies are based in Delaware.) The outlook for these ratings is stable.
Concurrently, AM Best downgraded Genworth Life and Annuity Insurance Company’s (GLAIC) FSR from B (Fair) to B- (Fair) and Long Term ICR from ‘bb+’ (Fair) to ‘bb-‘ (Fair). did. (Richmond, Virginia). The outlook for these ratings is negative.
GLIC and GLICNY Ratings Reflect Balance Sheet Strength, AM Best Reflects Its Balance Sheet Strength, Marginal Operating Results, Limited Business Profile and Adequate Enterprise Risk Management (ERM) doing.
The upgrades of GLIC and GLICNY reflect management’s continued strategy of obtaining actuarial premium rate increases for its long-term care (LTC) insurance holdings and achieving meaningful results in recent years. It reflects a marked improvement in performance. Performance in recent years has benefited from increased lapses and lower utilization in the LTC business unit as a result of the pandemic. The rising interest rate environment is also net positive, somewhat offset by higher costs associated with higher inflation. While the Group has proven successful in raising premium rates in the past, the impact and timing of approving and receiving these rate increases remains uncertain and subject to potential risks.
GLAIC’s rating reflects AM Best’s adequacy of balance sheet strength, weak operating results, limited business profile and adequate ERM.
GLAIC’s downgrade was primarily due to the company’s low level of risk-adjusted capital as measured by Best Capital Adequacy Ratio (BCAR), which has declined significantly over the past 12 months, with a statutory net loss of 179 reached the dollar. At the end of 2021 there was a loss of $1 million. Stock market declines required higher levels of reserves for the company’s variable annuity business and increased mortality from the COVID-19 pandemic. GLAIC’s negative outlook reflects continued pressure on its current balance sheet strength assessment. AM Best will continue to monitor the company’s ability to improve its current level of risk-adjusted capital. Failure to implement capital management initiatives designed to improve risk-adjusted capital may result in further negative rating action.
The following long-term IRs have been upgraded with a stable outlook.
Genworth Holdings Co., Ltd.—
— ‘b’ (marginal) to ‘b+’ (marginal) for $300 million 6.50% senior unsecured bonds due 2034
— From ‘ccc+’ (weak) to ‘b-‘ (marginal) for $600 million fixed/floating junior subordinated notes due 2066
The following indicative long-term IRs have been upgraded with a stable outlook.
Genworth Financial Inc.—
— From ‘b’ (marginal) to ‘b+’ (marginal) senior unsecured debt
— From ‘b-‘ (marginal) to ‘b’ (marginal) subordinated debt
— preferred stock from ‘ccc+’ (weak) to ‘b-‘ (marginal)
Genworth Holdings Co., Ltd.—
— From ‘b’ (marginal) to ‘b+’ (marginal) senior unsecured debt
— From ‘b-‘ (marginal) to ‘b’ (marginal) subordinated debt
— preferred stock from ‘ccc+’ (weak) to ‘b-‘ (marginal)
This press release relates to credit ratings posted on AM Best’s website. For all rating information related to the release and related disclosures, including details of the office responsible for issuing the individual ratings referenced in this release, please see AM Best’s Recent Ratings Activity web page. please give me. For additional information on the use and limitations of credit rating opinions, please see our best credit rating guide. For information on proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments, and AM Best Press Releases, please see our Guide to Proper Use of Best’s Ratings & Assessments.
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