Genworth Financial Inc. (GNW), the insurer seeking a chief executive officer, had its ratings review extended by Moody’s Investors Service as acting CEO Martin Klein weighs a shift in strategy.
“Moody’s will continue to focus on the evaluation of holding company financial flexibility over the near to medium term,” the ratings firm said today in a statement on the Richmond, Virginia-based insurer.
Moody’s began a review in June to evaluate whether Genworth should be cut to junk after incurring losses from insuring mortgages against default. Such evaluations often take about three months. Genworth said yesterday that it will disclose third-quarter results Oct. 30 and hold a conference call the next day when managers will “discuss company strategy and action plans.”
Klein, who became acting CEO when Michael Fraizer stepped down in May, is seeking to charge more for long-term care coverage and evaluating how to limit damage from U.S. mortgage insurance. The company also sells life insurance and retirement products and backs home loans in Canada and Australia.
“The company is pursuing various plans to manage the U.S. mortgage insurance business and its linkages and dependencies to the holding company,” Genworth said in a separate statement. “The company does not believe run-off, a sale or spin-off of that business are the most beneficial options for shareholders at this time.”
Moody’s rated Genworth A2, five levels below the highest grade, until 2008, when it lowered the grade two steps. In 2009, the ratings company reduced its opinion to Baa3, the lowest level of investment grade.
Genworth was unchanged at $5.23 at 4:01 p.m. in New York trading. The company has dropped 20 percent this year.
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