|
Genworth Financial, Inc. - Life Insurance -
Category Main Page
(804)
281-6000
6620 West Broad Street
Richmond, Virginia 23230
www.genworth.com
Sales
$11.7
billion
Business Description
Genworth Financial, Inc. is a leading insurance company in the U.S., with an
expanding international presence, serving the life insurance and lifestyle
protection, retirement income, investment and mortgage insurance needs of
more than 15 million customers. We have leadership positions in key products
that we expect will benefit from a number of significant demographic,
governmental and market trends. We distribute our products and services
through an extensive and diversified distribution network that includes
financial intermediaries, independent producers and dedicated sales
specialists. We conduct operations in 20 countries and have approximately
5,850 employees.
We have the following three operating segments:
• Protection. We offer U.S. customers life insurance, long-term care
insurance and, for companies with fewer than 1,000 employees, group life
insurance and health insurance. In Europe, we offer payment protection
insurance, which helps consumers meet their payment obligations in the event
of illness, involuntary unemployment, disability or death. In 2003, we were
the leading provider of individual long-term care insurance and the
sixth-largest provider of term life insurance in the U.S., according to
LIMRA International (in each case based upon gross written premiums). We
believe we are a leading provider of term life insurance through brokerage
general agencies in the U.S. and that this channel is the largest and
fastest-growing distribution channel for term life insurance. Our leadership
in long-term care insurance is based upon almost 30 years of product
underwriting and claims experience.
• Retirement Income and Investments. We offer U.S. customers fixed, variable
and income annuities, variable life insurance, asset management, and
specialized products, including guaranteed investment contracts, funding
agreements and structured settlements. We are an established provider of
these products and, in 2003, we were the leading provider of income
annuities in the U.S., according to LIMRA International (based upon total
premiums and deposits).
• Mortgage Insurance. In the U.S., Canada, Australia and Europe, we offer
mortgage insurance products that facilitate homeownership by enabling
borrowers to buy homes with low-down-payment mortgages. According to Inside
Mortgage Finance, we were the fourth-largest provider in 2003 of mortgage
insurance in the U.S. and the fifth-largest provider in the first quarter of
2004 (based upon new insurance written). We also believe we are the largest
provider of private mortgage insurance outside the U.S.
Protection
Through our Protection segment, we offer life insurance, long-term care
insurance, European payment protection insurance and employment-based group
life insurance and health insurance.
Life insurance
Overview
Life insurance provides protection against financial hardship after the
death of an insured by providing cash payments to the beneficiaries of the
policyholder. According to the American Council of Life Insurers, sales of
new life insurance coverage in the U.S. were $2.9 trillion in 2002, and
total life insurance coverage in the U.S. was $16.3 trillion as of December
31, 2002. Excluding variable life insurance, the sales of which have been
adversely affected by recent stock market volatility, annualized premiums
for life insurance increased by an average of 9.1% per year from 1999 to
2002, according to LIMRA International.
Our principal life insurance product is term life, which provides life
insurance coverage with guaranteed level premiums for a specified period of
time with little or no buildup of cash value that is payable upon lapse of
the coverage. We have been a leading provider of term life insurance for
more than two decades, and, in 2003, we were the sixth-largest provider of
term life insurance in the U.S., based upon gross written premiums,
according to LIMRA International, and we believe we are a leading provider
of term life insurance through brokerage general agencies in the U.S. In
addition to term life insurance, we offer universal life insurance products,
which are designed to provide protection for the entire life of the insured
and may include a buildup of cash value that can be used to meet the
policyholder's particular financial needs during his lifetime. Our life
insurance business also includes a closed block of whole life insurance that
is in run-off. Whole life insurance offers the beneficiary benefits in the
event of the insured's death for his entire life, provided premiums have
been paid when due. Whole life insurance also allows for the buildup of cash
value but has no investment feature.
We price our insurance policies based primarily upon our own historical
experience in the risk categories that we target. Our pricing strategy is to
target individuals in preferred risk categories and offer them attractive
products at competitive prices. Preferred risks include healthier
individuals who generally have family histories that do not present
increased mortality risk. As of March 31, 2004, approximately 83% of our
in-force life insurance policies covered individuals in preferred risk
categories. We also have significant expertise in evaluating people with
health problems and offer appropriately priced coverage for people who meet
our underwriting criteria. Our mortality experience generally has compared
favorably to the assumptions we have used in pricing our products, and we
believe this is indicative of the quality of our underwriting
decision-making. In addition, the persistency of our policies also has
compared favorably to our pricing assumptions.
We have been able to improve our returns on equity on new business by
implementing pricing, reinsurance and capital management actions in response
to Regulation XXX, which requires insurers to establish additional statutory
reserves for term and universal life insurance policies with long-term
premium guarantees. Virtually all our newly issued term and universal life
insurance business is now affected by Regulation XXX.
We offer our life insurance products primarily through an extensive network
of independent brokerage general agencies located throughout the U.S. We
also offer our life insurance products through affluent market producer
groups, financial intermediaries and dedicated sales specialists. We believe
there are opportunities to expand our sales through each of these
distribution channels.
Products
Term life insurance
Our term life insurance policies provide a death benefit if the insured dies
while the coverage is in force. Term life policies lapse with little or no
required payment by us at the end of the coverage period if the insured is
still alive. We also offer policyholders the right to convert most of our
term insurance policies to specified universal or variable universal life
insurance policies issued by us. We seek to reduce the mortality risk
associated with conversion by restricting its availability to certain ages
and by limiting the period during which the conversion option can be
exercised.
Our primary term life insurance products have guaranteed level premiums for
initial terms of 5, 10, 15, 20 or 30 years. In addition, our 5-year products
offer, at the end of the initial term, a second 5-year term of level
premiums, which may or may not be guaranteed. After the guaranteed period
expires, premiums increase annually and the policyholder has the option to
continue under the current policy by paying the increased premiums without
demonstrating insurability or qualifying for a new policy by submitting
again to the underwriting process. Coverage continues until the insured
reaches the policy expiration age or the policyholder ceases to make premium
payments or otherwise terminates the policy, including potentially
converting to a permanent plan of insurance. The termination of coverage is
called a lapse. For newer policies, we seek to reduce lapses at the end of
the guaranteed period by gradually grading premiums to the attained age
scale of the insured over the five years following the guaranteed period.
After this phase-in period, premiums continue to increase as the insured
ages.
Universal life insurance
Our universal life insurance policies provide policyholders with lifetime
death benefit coverage, the ability to accumulate assets on a flexible,
tax-deferred basis, and the option to access the cash value of the policy
through a policy loan, partial withdrawal or full surrender. Our universal
life products allow policyholders to adjust the timing and amount of premium
payments. We credit premiums paid, less certain expenses, to the
policyholder's account and from that account deduct regular expense charges
and certain risk charges, known as cost of insurance, which generally
increase from year to year as the insured ages. Our universal life insurance
policies accumulate cash value that we pay to the insured when the policy
lapses or is surrendered. Most of our universal life policies also include
provisions for surrender charges for early termination and partial
withdrawals. As of March 31, 2004, 53% of our in-force block of universal
life insurance was subject to surrender charges. We also sell joint,
second-to-die policies that are typically used for estate planning purposes.
These policies insure two lives rather than one, with the policy proceeds
paid after the death of both insured individuals.
We credit interest on policyholder account balances at a rate determined by
us, but not less than a contractually guaranteed minimum. Our in-force
universal life insurance policies generally have minimum guaranteed
crediting rates ranging from 4.0% to 6.0% for the life of the policy, with a
majority of those products currently crediting rates between 4.0% and 5.5%.
The most frequent minimum guaranteed crediting rate as of March 31, 2004 was
4%. With interest rates currently at or near historical lows, we are seeking
regulatory authorization to reduce our minimum guaranteed crediting rates
for new policies.
ticker: GNW
Life Insurance Companies in the Directory
Genworth
Jefferson Pilot
Kansas City Life Insurance
Company
Lincoln National
Manulife
Metlife
National
Western Life Insurance
Nationwide Financial Services
Presidential
Life
Protective Life
Prudential
Reinsurance Group of America
|
|
