S&P downgrades Genworth Life

S&P said it lowered the financial strength ratings on Genworth Life Insurance Co., Genworth Life and Annuity Insurance Co. and Genworth Life Insurance Co. of New York to BB- from BB.

The agency also said it affirmed the BB+ long-term counterparty credit and financial strength ratings on Genworth Mortgage Insurance Corp.

S&P also said it affirmed the B long-term counterparty credit and senior unsecured debt ratings on Genworth Financial Inc. and Genworth Holdings Inc.

All of the ratings have been removed from CreditWatch, where they were placed in February 2016, the agency said.

The outlook is negative.

The downgrades of Genworth's non-strategic U.S. life insurance subsidiaries were due to heightened concerns about the increased concentration in long-term care insurance as new life insurance and annuity sales ceased earlier this year, S&P explained.

The agency said it now views the competitive position of Genworth's U.S. life division as less than adequate instead of adequate.

The performance of Genworth's long-term care product line depends on uncertain premium rate increases and overall reserve adequacy, S&P added.

The product line has exhibited reserve volatility in recent years and may continue to exhibit volatility depending on variables such as new claim count, time on claim and interest rates, the agency said.

The negative outlook reflects concerns about the group’s strategic uncertainty and prospective operating performance and capital strength, S&P said.

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