Genworth issues statement on ruling in UK payment protection insurance case

Genworth Financial (GNW) issued a statement in response to a UK High Court judgment in favor of AXA (AXAHF) in the legal proceedings against Santander (SAN) companies related to liabilities associated with the historic mis-selling of Payment Protection Insurance policies.The company said, ” At issue were losses incurred from mis-selling complaints for PPI underwritten by two companies that AXA acquired from Genworth in 2015. The policies were sold by a company acquired by Santander in 2009. The judgment finds Santander liable for AXA’s losses resulting from Santander’s mis-selling. At a hearing in London today, the Judge awarded AXA damages, interest, and costs of approximately GBP 680M, or $911M, using a GBP 1/$1.34 exchange rate. Under prior agreements between Genworth and AXA, Genworth is entitled to share in funds that AXA recovers from third parties related to the mis-selling losses. If the judgment is paid in full and appeals, if any, are favorably resolved, Genworth would expect at that time to recover approximately $750M, depending upon the applicable exchange rate at that time. As previously shared, any recoveries have not been factored into Genworth’s capital allocation plans. Genworth plans to deploy any recoveries in line with our stated capital allocation priorities: investing in growth through CareScout, returning cash to shareholders through our buyback program, and opportunistically paying down debt.”