Genworth May Spin Off US Mortgage Insurance Business
Genworth Financial, Inc., a Richmond-based mortgage insurer, said Tuesday it is considering “strategic alternatives” for its U.S. mortgage insurance business. The news surprised some market participants, given Genworth's new-found status as the nation's largest MI underwriter, a position gained as larger competitors have been forced to pull back strongly on growth initiatives amid mounting losses. Of the options on the horizon is a possible spin-off of the business, the company said in a press statement that also reiterated the company's more than $800 million in cash and cash equivalents, and suggested that mortgage insurance as a business may yet be a dying breed. “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 CEO Michael D. Frazier. “At the same time, progress in our…insurance businesses has been overshadowed by concerns about the future of U.S. mortgage insurance.” Growth has been stronger in Genworth's other business lines, including life insurance, long-term care coverage and retirement and wealth-management services. Frazier also seemed to signal that Genworth, for whatever reason, wasn't committed to growing its MI platform further; he noted that the company would look to find a purchaser that would “enable U.S. MI to achieve its full potential” as the nation’s sole AA-rated mortgage insurer. For more information, visit http://www.genworth.com. Editor's note: To contact the reporter on this story, email firstname.lastname@example.org.