Buyout Firm Flowers Eyes Bid For Genworth Arm

Written By Unknown on Senin, 13 April 2015 | 11.46

By Mark Kleinman, City Editor

Genworth Financial, a troubled US insurance company, is in talks with one of the financial services industry's most prolific investors about the sale of a business that includes a range of products sold to UK customers.

Sky News understands that JC Flowers, a private equity firm, is one of several bidders in talks with Genworth about acquiring its lifestyle protection unit, which comprises operations in more than 25 countries, including Britain.

The division had been identified as non-core by Genworth's management as long ago as 2012, but it was only put up for sale late last year, when investment bankers at Barclays were hired to oversee an auction.

Bankers estimate that the division could fetch in the region of $500m (£341m).

In addition to JC Flowers, which owns stakes in UK companies including OneSavings Bank and Cabot Financial, a debt collector, Apollo and Warburg Pincus are said to have expressed an interest in the Genworth business.

Genworth Lifestyle Protection writes both direct and reinsurance business including to large global companies that want access to the wholesale market.

Its products include credit-linked protection for customers when they are unable to meet repayments on specific financial commitments in the event of  illness, accident, unemployment, disability or death.

The division's auction comes as Genworth explores a wider break-up, including through a sale of its Life and Annuity Insurance Company.

In February, it announced a strategic after recording a $1.6bn (£1.1bn) loss in the second half of last year because it did not have suufficient money set aside to cover payouts on long-term care policies.

Speaking at the time, Tom McInerney, Genworth's president and chief executive, said: "I am disappointed by the continued challenges in our older LTC [long-term care] blocks and how it is overshadowing otherwise strong performance and momentum in other businesses, however we have taken steps on many fronts to deal with these challenges in order to strengthen and rebuild the future."


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