Genworth Financial (GNW) risk factors, FY2025 10-K

Risks Relating to Our Ability to Grow Our New Business, Products or Services

1. 01New lines of business or new products and services, such as those we are pursuing with CareScout, may not be successful or may subject us to additional risks

Risks Relating to Estimates, Assumptions and Valuations

1. 02We may be required to increase our reserves as a result of deviations from our estimates and actuarial assumptions or other reasons, which could have a material adverse effect on our business, results of operations and financial condition
2. 03The risk that our claims experience may differ significantly from our valuation assumptions is particularly significant for our long-term care insurance products. Long-term care insurance policies provide for long-duration coverage and, therefore, our actual claims experience will emerge over many years, or decades
3. 04Assumption updates and actual variances from expected experience
4. 05In-force management actions
5. 06If the models used in our businesses are inaccurate, it could have a material adverse impact on our business, results of operations and financial condition
6. 07Our valuation of fixed maturity and equity securities uses methodologies, estimations and assumptions that are subject to change and differing interpretations which could result in changes to investment valuations that may materially adversely affect our business, results of operations and financial condition
7. 08Genworth Financial and Genworth Holdings depend on the ability of Enact Holdings and its subsidiaries to pay dividends and make other payments and distributions to each of them to meet their obligations
8. 09Our sources of capital have become more limited, and under certain conditions we may need to seek additional capital on unfavorable terms
9. 10Adverse rating agency actions have in the past resulted in a loss of business and adversely affected our results of operations, financial condition and business, and future adverse rating actions could have a further and more significant adverse impact on us
10. 11See “Item 1—Business—Ratings” for information regarding the current financial strength ratings of our principal insurance subsidiaries
11. 12Defaults or other events impacting the value of our fixed maturity securities portfolio may reduce our income

Risks Relating to Economic and Market Conditions

1. 13Insurance Products and Investments
2. 14A deterioration in economic conditions, a severe recession or a decline in home prices, all of which could be driven by many potential factors, may adversely affect our business, profitability and Enact Holdings’ loss experience

Regulatory and Legal Risks

1. 15Changes in accounting and reporting standards issued by the Financial Accounting Standards Board or other standard-setting bodies and insurance regulators could materially adversely affect our business, financial condition and results of operations
2. 16The inability to execute in-force management actions (including obtaining in-force rate actions) on our long-term care insurance products in Closed Block could have a material adverse impact on our business, including our results of operations and financial condition
3. 17Our insurance businesses are extensively regulated and changes in regulation may reduce our profitability and limit our growth
4. 18Litigation and regulatory investigations or other actions are common in the insurance business and may result in financial losses and harm our reputation
5. 19An adverse change in the regulatory requirements on our legacy insurance subsidiaries, including risk-based capital requirements, could have a material adverse impact on our business, results of operations and financial condition
6. 20Changes to the charters or practices of the GSEs, including actions or decisions to decrease or discontinue the use of mortgage insurance, could adversely affect our business, financial condition and results of operations
7. 21On January 2, 2025, the FHFA and the U.S. Treasury Department agreed to again amend the PSPAs between the U.S. Treasury Department and each of the GSEs to establish a methodical process for eventual public input on the termination of conservatorship to minimize disruption to the housing and financial markets
8. 22Fannie Mae and Freddie Mac also possess substantial market power, which enables them to influence Enact Holdings and the mortgage insurance industry in general, which in turn could have a material adverse effect on our business, financial condition and results of operations
9. 23Enact Holdings’ U.S. mortgage insurance subsidiaries are subject to minimum statutory capital requirements, which if not met or waived, would result in restrictions or prohibitions on them doing business and could have a material adverse impact on our business, financial condition and results of operations
10. 24Changes in regulations that adversely affect the mortgage insurance markets in which Enact Holdings operates could affect its operations significantly and could reduce the demand for mortgage insurance
11. 25Dodd-Frank Act Risk Retention
12. 26Our legacy insurance subsidiaries may not be able to continue to mitigate the impact of Regulations XXX or AXXX and, therefore, they may incur higher operating costs that could have a material adverse effect on our business, financial condition and results of operations

Operational Risks

1. 27If we are unable to retain, attract and motivate qualified employees or senior management, our results of operations, financial condition and business operations may be adversely impacted
2. 28Changes in the composition of Enact Holdings’ business or undue concentration by customer or geographic region could cause a significant loss of business or adverse performance of a small segment of its portfolio
3. 29Our businesses could be adversely impacted if our disclosure controls and procedures or internal control over financial reporting are not effective
4. 30We rely upon third-party vendors who may be unable or unwilling to meet their obligations to us

Insurance and Product-Related Risks

1. 31Enact Holdings may be unable to maintain or increase capital in its mortgage insurance subsidiaries in a timely manner, on anticipated terms or at all, including through improved business performance, reinsurance or similar transactions, securities offerings or otherwise, in each case as and when required
2. 32Reinsurance may not be available, affordable or adequate to protect us against losses
3. 33A decrease in the volume of high loan-to-value home mortgage originations or an increase in the volume of mortgage insurance cancellations could result in a decline in Enact Holdings’ revenue
4. 34The amount of mortgage insurance written by Enact Holdings could decline significantly if alternatives to private mortgage insurance are used or lower coverage levels of mortgage insurance are selected
5. 35Enact Holdings’ delegated underwriting and loss mitigation programs may subject its mortgage insurance subsidiaries to unanticipated claims
6. 36Medical advances, such as genetic research and diagnostic imaging, emerging new technology, including artificial intelligence and related legislation, could materially adversely affect the financial performance of our life insurance, long-term care insurance and annuity products