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Genworth Financial

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Genworth Financial, Inc.
Company typePublic
NYSE: GNW
S&P 400 Component
IndustryFinancial Services
FoundedMay 2004
HeadquartersHenrico County, Virginia, United States
Key people
Thomas J. McInerney,
President and Chief Executive Officer
ProductsLong term care insurance, mortgage insurance
RevenueUS$ 8.548 billion (2015)
Total assetsUS$ 106.4 billion (2016)[1]
Number of employees
~3,300 (2016)
Websitewww.genworth.com

Genworth Financial is a Fortune 500 insurance company. The firm was founded as The Life Insurance Company of Virginia in 1871.[2] 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.[3] In May 2004, Genworth Financial was formed out of various insurance businesses of General Electric in the largest IPO of that year.[4]

The Genworth Financial family of companies has three segments: Retirement & Protection, US Mortgage Insurance, and International. Products and services include life and long-term care insurance, mortgage insurance, and annuities. Its legal structure is set up as six separate companies.

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.[5]

Company history

A.G. McIlwaine was the company’s first president.[6] 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.[7] 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”, [citation needed] 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.[8]

Over the past few 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.[10]

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,[11] 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.[12]

GE sold its remaining stake in the company in 2006 for an estimated $2.8 billion.[13] 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. As of December 31, 2011, Genworth Financial, Inc. had more than 15 million customers in more than 25 countries. "Profile: Genworth Financial Inc (GNW)". Reuters. Retrieved 27 October 2014.

Products and services

Genworth Financial offers a range of products and services, including long-term care insurance and mortgage insurance. In 2016, the company suspended sales of annuities and life insurance, putting the existing books of business in to runoff. In 2012, Genworth’s U.S. companies paid over $3.2 billion in benefits to life insurance, long-term care insurance, and annuity policyholders and beneficiaries.[14]

The company provides individual long-term care insurance, group long-term care insurance for employers offering benefits to employees, and caregiver support services.[15]

Prior to 2016, the company offered several annuities: fixed immediate annuities, traditional fixed deferred annuities, and fixed index annuities.[16]

Life insurance was the company’s first product. As of December 2013, Genworth Life and Annuity Insurance Company and Genworth Life Insurance Company have over $728 billion in force.[17] Prior to the suspension of sales in 2016, the firm offered term life insurance, whole life insurance, universal life insurance, and index universal life insurance.[18]

Mortgage insurance

Genworth’s offers mortgage insurance, with benefits including homebuyer privileges, which provides rebates to items purchased for the home, and the homeowner assistance program, in which Genworth professionals work with homeowners and lenders to structure a feasible loan repayment program.[19]

Awards

Genworth Financial won “Best of Show” in 2007 at the Insurance & Financial Communicators Association (I.F.C.A) for outstanding interactive advertisement for their 100+ stories microsite. The microsite, which used a variety of multimedia to communicate the experiences of Americans who are 100 years of age or older, also won other accolades in 2007, including “Best of Category”, two gold and one silver awards in the Horizon Interactive Awards, and a gold award in the Financial Communications Society (FCS) portfolio awards.[20]

For three consecutive years (2012-2014), Genworth Financial received the DALBAR Life Insurance Service Award, making it the only life insurance firm to emerge as a leader in customer service. DALBAR identified characteristics that differentiated Genworth Financial from the rest of the life insurance industry, including their high degree of professionalism in dealing with policyholders, and their high attention to detail when answering clients’ questions. Genworth also won DALBAR’s annual Annuity Service Award, making them one of six companies that had “emerged as the titans of customer service in 2014".[21][22][23]

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." [24]

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 USD 219 million. [25] 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. [26]

References

  1. ^ http://investor.genworth.com/investors/news-releases/archive/archive/2016/Genworth-Financial-Announces-Fourth-Quarter-2015-Results/default.aspx
  2. ^ "Profile: Genworth Financial Inc (GNW)". Reuters. Retrieved 17 September 2013.
  3. ^ GE Capital To Acquire An Insurer
  4. ^ "US recorded largest number of IPOs in 2004 since internet bubble". AltAssets. Investor Networks Limited. 1 March 2005. Retrieved 17 September 2013.
  5. ^ "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.
  6. ^ "A Guide to the Life Insurance Company of Virginia Records, 1871-1920". Virginia Historical Society. Retrieved 27 October 2014.
  7. ^ "A Guide to the Life Insurance Company of Virginia Records, 1871-1920". Virginia Historical Society. Retrieved 27 October 2014.
  8. ^ "Genworth Financial 10th Anniversary Timeline" (PDF). Genworth Financial. Retrieved 27 October 2014.
  9. ^ "A Guide to the Life Insurance Company of Virginia Records, 1871-1920". Virginia Historical Society. Retrieved 27 October 2014.
  10. ^ "GE Capital to Acquire an Insurer". New York Times. 27 December 1995. Retrieved 27 October 2014.
  11. ^ "Genworth Financial Inc". CNN Money. Retrieved 27 October 2014.
  12. ^ "DIGITAL DOMAIN; Google Shmoogle. The Biggest I.P.O's Went Unnoticed". New York Times. 29 August 2004. Retrieved 27 October 2014.
  13. ^ "GE Sells Remaining $2.8 Billion Genworth Stock". Bloomberg. 27 February 2006. Retrieved 27 October 2014.
  14. ^ "Focusing on our strength". Genworth Financial. Retrieved 4 December 2014.
  15. ^ "Long Term Care". Genworth Financial. 13 November 2014. Retrieved 4 December 2014.
  16. ^ "Prospectuses". Genworth Financial. 28 August 2014. Retrieved 4 December 2014.
  17. ^ "Buying life insurance: It starts here". Genworth Financial. 17 October 2014.
  18. ^ "Life insurance types and options". Genworth Financial. 29 September 2013. Retrieved 4 December 2014.
  19. ^ "Mortgage Insurance". Genworth Financial. Retrieved 4 December 2014.
  20. ^ "Genworth Financial & IQ Interactive Wins Best of Show At I.F.C.A. Awards". Genworth Financial. Retrieved 27 February 2015.
  21. ^ "Genworth Earns DALBAR Life Insurance Service Award" (PDF). Dalbar.
  22. ^ "DALBAR recognizes Genworth for life insurance, annuity and long term care insurance servicing". Genworth Financial.
  23. ^ "Genworth Earns DALBAR Life & Long Term Care Insurance Service Awards". Yahoo News. Retrieved 27 February 2015.
  24. ^ Complaint http://www.classactionsnews.com/sites/default/files/pdfs/Genworth%20Financial%20Securities%20Fraud%20Class%20Action%20Complaint.pdf
  25. ^ http://newsroom.genworth.com/2016-03-11-Genworth-Announces-Settlement-Of-Securities-Class-Action-Lawsuit
  26. ^ http://www.prnewswire.com/news-releases/aimco-secures-219-million-recovery-in-genworth-571964161.html
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