If you have a Genworth life insurance policy, there are a few important developments you need to know about. In 2016, Genworth stopped selling new life insurance policies. They’ve since been downgraded by several independent rating agencies, and are in the process of being sold to a Chinese company.
Should you be worried? First, we’ll go over the issues and explain what happened. Then, we’ll explain what this means for you and what we recommend.
Issue #1: No More New Life Insurance Policies
In February of 2016, Genworth announced it would no longer sell new life insurance policies or fixed annuities. The company was experiencing heavy losses in the long-term care insurance market and needed restructuring as a result.
How serious are these losses? According to Bloomberg, in the five-year period from 2013 to June of 2018, Genworth’s stock price fell 65%.
The decision to stop selling new policies does not affect current policyholders. Genworth Life is still regulated by the various state insurance departments. However, it does raise concerns about the company’s future stability and ability to pay claims.
Issue #2: Possible Sale to Chinese Company
In October of 2016, Genworth announced its intention to be acquired by a Chinese company called China Oceanwide for $2.7 billion. This is also tied to the heavy losses Genworth experienced in the long-term care insurance market. For example, a month after this announcement, in November of 2016, they reported a $405 million operating loss.
Genworth’s stockholders approved the sale in March of 2017. However, news of the potential sale prompted consumers and data protection watchdogs to ask questions about data security. How would a Chinese company ensure the safety of U.S. consumer data? A U.S. national security panel investigated the issue. As of June 2018, the panel said it sees no problem with the sale. In all likelihood, the sale will now move forward.
Issue #3: Downgraded Ratings
After Genworth’s decision to stop selling life insurance, two rating agencies – A.M. Best and Fitch – downgraded their ratings for the company. This change in ratings may affect how you feel about Genworth as your life insurance provider, especially if you bought your policy when the company was rated A++ or A+.
As of June 2018, here’s how Genworth was rated:
|Rating Agency||Latest Rating|
(good); under review; as of 2/12/18
|Fitch||B+ (weak); outlook negative; as of 12/19/17|
|Moody's||Ba3 (questionable); under review; as of 3/10/17|
|Standard & Poor's||B+ (weak)|
|Sources: Genworth; Reuters
What Should You Do Now?
My advice is to get a new quote and consider switching to another company for more safety and peace of mind. There’s no current evidence that Genworth would ever be unable to pay your policy’s claim, but none of us can predict the future.
It only takes a few minutes to get a new quote here on my site. I represent 50 leading life insurance companies, so you’ll know you’re getting the most affordable rate for the coverage you need.
Life insurance rates are still at historic lows. Even if you have health issues, you may not need to pay more than you do right now.