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Genworth Financial Announces Strategic Review of U.S. Mortgage Insurance


RICHMOND, Va., Sept. 30 /PRNewswire-FirstCall/ -- Genworth Financial, Inc. (NYSE: GNW) today said it is examining a number of strategic alternatives regarding its U.S. Mortgage Insurance (U.S. MI) business, including a possible spin-off, to determine the optimal course for Genworth, its customers and shareholders. The company also reaffirmed its sound financial foundation and cash availability to meet liquidity requirements across the company.

"We have demonstrated that, in the current stressed U.S. housing environment, our U.S. Mortgage Insurance business continues to operate from a more sound financial position and lower risk profile than any other U.S. mortgage insurer," said Michael D. Fraizer, chairman and chief executive officer. "At the same time, progress in our international, wealth management, retirement, life and long-term care insurance businesses has been overshadowed by concerns about the future of U.S. Mortgage Insurance."

"Genworth's U.S. MI business remains the only 'AA' rated mortgage insurer in the U.S.," Fraizer said. "We have a strong leadership team that has taken significant steps to position the business for improved future performance, and is executing well to expand its opportunities. This step should enable U.S. MI to achieve its full potential and to optimize shareholder value."

The company also provided an update on Genworth's overall capital and financial flexibility. The company has currently reduced its commercial paper borrowings to $79 million, and maintains more than $800 million in cash and cash equivalents at the holding company, carries nearly $4.0 billion of cash and cash equivalents in its operating companies, and maintains substantial credit facilities.

Additional details about Genworth's capital position, mortgage insurance fundamentals and exposures to specific financial services holdings in its investment portfolios are available on the company's website:

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 announcement of its strategic review of the U.S. MI business, including uncertainty arising from the announcement, and uncertainty regarding whether any transaction will occur;

-- Risks relating to the company's businesses, 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

SOURCE Genworth Financial, Inc.
CONTACT: Investors, Cass English, +1-804-662-2614,, or Media, Tom Topinka, +1-804-662-2444,, both of Genworth Financial, Inc.
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