RICHMOND, Va., Oct. 27, 2015 /PRNewswire/ -- Genworth Financial, Inc. (NYSE: GNW) (the company or Genworth) announced today that Genworth Mortgage Insurance Corporation (GMICO), a wholly-owned indirect subsidiary of the company, has entered into an agreement to sell its European mortgage insurance business to AmTrust Financial Services, Inc. that is expected to result in net proceeds of approximately $55 million. These proceeds will provide additional capital credit to GMICO under the private mortgage insurer eligibility requirements (PMIERs). Prior to this transaction, GMICO did not receive capital credit under PMIERs for its ownership of the European mortgage insurance business.
The company expects to record a decrease in GMICO statutory surplus of approximately $90 million in the third quarter of 2015 related to the anticipated sale, with a slight impact to its statutory risk-to-capital ratio of less than one point. Additionally, the company expects to record an after-tax GAAP loss of approximately $140 million related to the sale in the fourth quarter of 2015. The transaction is expected to close in 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.
Lazard and Sidley Austin LLP advised Genworth on this transaction.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company committed to helping families become more financially secure, self-reliant and prepared for the future. Genworth has leadership positions in mortgage insurance and long term care insurance and product offerings in life insurance and fixed annuities that assist consumers in solving their home ownership, insurance and retirement needs. To help families start "the talk" about their futures and long term care planning, Genworth recently completed the first stage of its national #LetsTalk Tour to encourage conversations and information sharing. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com.
From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of genworth.com. From time to time, Genworth's publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth Mortgage Insurance Australia Limited, separately release financial and other information about their operations. This information can be found at http://genworth.ca and http://www.genworth.com.au.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "will," or words of similar meaning and include, but are not limited to, statements regarding the proposed transaction to sell the European mortgage insurance business and its anticipated financial impact. The proposed transaction remains subject to certain closing conditions, including regulatory approvals, and the company cannot predict with certainty whether or when this transaction will close or what the actual financial impact will be. Forward-looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks, including the items identified under "Part I—Item 1A—Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (SEC) on March 2, 2015 and as updated in Genworth's quarterly reports on Form 10-Q filed with the SEC on April 29, 2015 and August 5, 2015.
We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
SOURCE Genworth Financial, Inc.