AM Best Upgrades Issuer Credit Ratings of Genworth Financial, Inc. and Genworth Holdings, Inc., Affirms Credit Ratings of U.S. Life Subsidiaries

AM Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICRs) to “bb-” (Fair) from “b+” (Marginal) of Genworth Financial, Inc. [NYSE: GNW] and Genworth Holdings, Inc. (both domiciled in Delaware), as well their Long-Term Issue Credit Ratings (Long-Term IRs). The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed list of the Long-Term IRs.)

In addition, AM Best affirmed the Financial Strength Rating (FSR) of B- (Fair) and the Long-Term ICR of “bb-” (Fair) of Genworth Life and Annuity Insurance Company (GLAIC) (Richmond, VA). The outlook of these ratings has been revised to stable from negative. Additionally, AM Best has affirmed the FSR of C++ (Marginal) and the Long-Term ICRs of “b+” (Marginal) of Genworth Life Insurance Company (GLIC) (Wilmington, DE) and Genworth Life Insurance Company of New York (GLICNY) (New York, NY). The outlook of these ratings is stable.

The ratings of GLAIC reflect its balance sheet strength, which AM Best assesses as weak, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The ratings of GLAIC also reflect its weak level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s adequate operating performance reflects a trend of positive operating earnings in recent years and has contributed to modest BCAR score improvements. AM Best will continue to monitor the company’s ability to improve its current balance sheet metrics.

The ratings of GLIC and GLICNY reflect their balance sheet strength, which AM Best assesses as weak, as well as their adequate operating performance, limited business profile and appropriate ERM.

The ratings of GLIC and GLICNY also reflect their risk-adjusted capitalization, as measured by BCAR, and other capital metrics, which are low and volatile. Management continues to achieve positive results from the execution of its strategy of obtaining actuarially supported premium rate increases and reducing future benefit obligations on in-force, long-term care (LTC) policies. The interest rate environment is a net positive, albeit offset somewhat by higher costs associated with inflation. The impact and timing of achieving premium rate increase approvals continue to be a financial risk.

The rating upgrades of Genworth Financial, Inc. and Genworth Holdings, Inc. reflect the recent positive operating gains from its lower rated operating companies. AM Best does note their dependence on dividends from Enact Holdings, Inc [Nasdaq: ACT], to service debt obligations, support the company’s capital allocation priorities of share repurchases, opportunistic debt reduction, and growth investments in CareScout.

The following Long-Term IRs have been upgraded with stable outlooks:

Genworth Holdings, Inc.—

— to “bb-” (Fairl) from “b+” (Marginal) on $300 million 6.50% senior unsecured notes, due 2034

— to “b” (Marginal) from “b-” (Marginal) on $600 million fixed/floating rate junior subordinated notes, due 2066

The following indicative Long-Term IRs have been upgraded with stable outlooks:

Genworth Holdings, Inc.—

— to “bb-” (Fair) from “b+” (Marginal) on senior unsecured debt

— to “b+” (Marginal) from “b” (Marginal) on subordinated debt

— to “b” (Marginal) from “b-” (Marginal) on preferred stock

Genworth Financial, Inc.—

— to “bb-” (Fair) from “b+” (Marginal) on senior unsecured debt

— to “b+” (Marginal) from “b” (Marginal) on subordinated debt

— to “b” (Marginal) from “b-” (Marginal) on preferred stock

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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