A.M. Best Downgrades Genworth Financial

Genworth Financial Inc., Richmond, Va., has been downgraded by A.M. Best Inc., Oldwick, N.J., which cited concern over exposure to mortgages on the company's balance sheet -- both at its life insurance side (as an originator and investor in commercial mortgages and securities, as well as residential mortgage-backed securities) and on the mortgage insurance side. While Best said Genworth had prudent commercial mortgage loan underwriting practices and limited delinquencies so far, the rating agency added it expected "rising defaults in response to the deepening recession, and is most cautious on the retail, hotel and office properties within close proximity to distressed housing markets and/or labor markets where unemployment is high." Best cut the financial strength rating on Genworth Financial from A+(Superior) to A(Excellent). The Best move came days after Fitch Ratings, Chicago, cuts its Insurer Financial Strength rating on Genworth Financial two notches, from A+ down to A-.