A.M. Best Affirms Ratings of Genworth Financial; Upgrades Ratings of Continental Life

Business Wire, June 2, 2006

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings (FSR) of A (Superior) and the issuer credit ratings (ICR) of "aa-" of the key life/health insurance subsidiaries of Genworth Financial, Inc. (Genworth) (NYSE: GNW) (Richmond, VA). A.M. Best has also affirmed the ICR of "a-" and the existing debt securities' ratings of Genworth. The outlook for the above ratings is stable.

Additionally, A.M. Best has removed from under review and upgraded the FSR to A- (Excellent) from B (Very Good) and assigned an ICR of "a-" to Genworth's newly-acquired company, Continental Life Insurance Company of Brentwood, Tennessee (Continental). The outlook for these ratings is positive. (See link below for a detailed listing of all ratings.)

Genworth's ratings reflect its solid operating performance, favorable liquidity position, adequate risk-adjusted capitalization and extensive distribution sources. Its established presence in mortgage insurance, term life, long-term care and income annuity markets provides significant diversification of earnings. A.M. Best believes that Genworth's balance sheet has a manageable amount of leverage that can be comfortably serviced from the earnings generated by its insurance operations. The company's debt-to-capital ratio is approximately 22% with interest coverage of roughly 10 times. Going forward, A.M. Best expects Genworth to maintain financial leverage at or below 25%.

The primary offsetting rating factors are the group's exposure to the industry-wide uncertainties associated with long-term care liabilities, as well as its global exposure to the mortgage insurance business, where earnings are dependent upon prevailing economic conditions. However, A.M. Best notes that the company's comprehensive risk management program and its expertise in the underwriting and pricing of these businesses partially mitigate these concerns.

The upgrade of Continental's ratings reflects the greater financial flexibility and access to resources resulting from its recent acquisition by Genworth. Continental provides Genworth with a scalable platform for consolidating its existing Medicare supplement business and nearly triples the size of Genworth's book, increasing its industry market share rank to 13th.

A.M. Best views favorably the potential expense synergies and greater efficiencies to be realized by consolidating the Medicare supplement business onto Continental's platform and considers the overall book of business to be reasonably sound. While the Medicare supplement business carries the potential for earnings volatility, contributions from this line still represent a relatively small percentage of Genworth's overall operating income.

For a complete listing of Genworth Financial, Inc.'s FSRs, ICRs and debt, please visit www.ambest.com/press/060206genworth.pdf.> For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.