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August 5, 2014
07:27 EDTGNWGenworth risk/reward compelling, says UBS
UBS sees the risk/reward for Genworth as compelling after the recent LTC review has created uncertainty and a loss of market cap. The firm feels if the company can achieve a 9% return on equity by 2016 the upside potential could be 70%, but if they miss the target the downside could be 25%, which UBS judges to be a good risk/reward. UBS lowered its price target on Genworth to $18 from $20 though it keeps a Buy rating on the stock.
News For GNW From The Last 14 Days
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September 30, 2015
18:02 EDTGNWGenworth to sell certain blocks of term life policies to Protective Life
Genworth Financial announced that Genworth Life and Annuity Insurance Company, a wholly-owned indirect subsidiary of the company, has entered into an agreement to sell, via reinsurance, certain blocks of term life insurance to Protective Life Insurance Company. The majority of the term life insurance blocks included in this transaction are currently reinsured to River Lake Insurance Company and River Lake Insurance Company II, which previously had not been consolidated in the statutory financial statements of the U.S. life insurance companies. Genworth will continue to administer and service the policies, which represent approximately $108.7B of term life insurance in force backed by approximately $2.3B of statutory reserves as of June 30. The transaction represents another step toward increasing Genworth's financial flexibility and strength by generating capital from low return blocks. The company expects to generate initial capital of approximately $100M-$150M in aggregate to Genworth. The transaction will utilize all of the net operating losses in the U.S. life insurance companies resulting in expected inter-company tax payments over time to the holding company and other entities for the use of tax benefits. The impacts will likely be favorable for some legal entities and unfavorable for others and will vary based upon utilization of net operating losses and tax sharing arrangements, among other factors. In addition to the aggregate capital and tax benefits associated with the sale, the company anticipates a minimal impact to income and a modest improvement to return on equity. The company expects to record an after-tax GAAP loss of approximately $275M-$325M in the third quarter of 2015 primarily related to the write-off of deferred acquisition costs associated with the term life insurance blocks being sold. The transaction is expected to close during the first quarter of 2016 and is subject to customary conditions, including requisite regulatory approvals. Genworth will provide further details regarding the transaction on its earnings conference call for the third quarter of 2015.

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