1276520--2/26/2010--GENWORTH_FINANCIAL

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Risks Relating to Our Businesses Downturns and volatility in global economies and equity and credit markets could materially adversely affect our business and results of operations. A downgrade or a potential downgrade in our financial strength or credit ratings could result in a loss of business and adversely affect our financial condition and results of operations. Interest rate fluctuations and levels could adversely affect our business and profitability. Adverse capital and credit market conditions may significantly affect our access to capital and may affect our ability to meet liquidity or refinancing requirements in the future. Our valuation of fixed maturity, equity and trading securities may include methodologies, estimations and assumptions that are subject to differing interpretations and could result in changes to investment valuations that may materially adversely affect our results of operations or financial condition. Defaults, downgrades or other events impacting the value of our fixed maturity securities portfolio may reduce our income. Defaults on our commercial mortgage loans or the mortgage loans underlying our investments in commercial mortgage-backed securities and volatility in performance may adversely affect our profitability. We may be required to recognize additional impairments in the value of our goodwill, which would increase our expenses and reduce our U.S. GAAP profitability. The soundness of other financial institutions could adversely affect us. An inability to access our credit facilities could result in a reduction in our liquidity and lead to downgrades in our credit and financial strength ratings. An adverse change in our risk-based capital and other regulatory requirements could result in a decline in our ratings, increased scrutiny by regulators and have an adverse impact on our financial condition, results of operations and prospects. If our reserves for future policy claims are inadequate, we may be required to increase our reserve liabilities, which could adversely affect our results of operations and financial condition. As a holding company, we depend on the ability of our subsidiaries to transfer funds to us to pay dividends and to meet our obligations. Competitors could negatively affect our ability to maintain or increase our market share and profitability. Reinsurance may not be available, affordable or adequate to protect us against losses. If the counterparties to our reinsurance arrangements or to the derivative instruments we use to hedge our business risks default or fail to perform, we may be exposed to risks we had sought to mitigate, which could adversely affect our financial condition and results of operations. Our focus on key distribution relationships may expose us to reduced sales in the future. Our insurance businesses are heavily regulated and changes in regulation may reduce our profitability and limit our growth. Legal and regulatory investigations and actions are common in the insurance business and may result in financial losses and harm our reputation. Our computer systems may fail or their security may be compromised, which could damage our business and adversely affect our financial condition and results of operations. The occurrence of natural or man-made disasters or a pandemic could adversely affect our financial condition and results of operations. Risks Relating to Our Retirement and Protection Segment We may face losses if morbidity rates or mortality rates differ significantly from our pricing expectations. We may be required to accelerate the amortization of deferred acquisition costs and the present value of future profits, which would increase our expenses and reduce profitability. Our reputation in the long-term care insurance market may be adversely affected by the rate actions currently being implemented on our in-force long-term care insurance products and by any rate actions we may take in the future. Medical advances, such as genetic research and diagnostic imaging, and related legislation could adversely affect the financial performance of our life insurance, long-term care insurance and annuity businesses. We may face losses if there are significant deviations from our assumptions regarding the future persistency of our insurance policies and annuity contracts. We cannot provide assurance that we will be able to continue to implement actions to mitigate the impact of Regulations XXX or AXXX and as a result we may incur higher operating costs that could have an adverse effect on our financial condition and results of operations. If demand for long-term care insurance either declines or remains flat, we may not be able to execute our strategy to expand our long-term care insurance business. Risks Relating to Our International Segment We have significant operations internationally that could be adversely affected by changes in political or economic stability or government policies where we operate. Fluctuations in foreign currency exchange rates and international securities markets could negatively affect our profitability. We may face higher than anticipated losses if unemployment rates differ significantly from our pricing expectations. Our claims expenses would increase and our results of operations would suffer if the rate of defaults on mortgages covered by our mortgage insurance increases or the severity of such defaults exceeds our expectations. A significant portion of our international mortgage insurance risk in-force consists of loans with high loan-to-value ratios, which generally result in more and larger claims than loans with lower loan-to-value ratios. Our international mortgage insurance business is subject to substantial competition from government-owned and government-sponsored enterprises, and this may put us at a competitive disadvantage on pricing and other terms and conditions. Changes in regulations could affect our international operations significantly and could reduce the demand for mortgage insurance. Risks Relating to Our U.S. Mortgage Insurance Segment Our claims expenses and loss reserves have increased in recent periods and could continue to increase if the rate of defaults on mortgages covered by our mortgage insurance continues to increase, and in some cases we expect that paid claims and loss reserves will increase. We expect to continue to investigate insured U.S. mortgage loans and in some cases may rescind coverage, although we cannot give assurance on the extent to which we may continue to realize benefits from rescissions. The extent to which loan modifications and other similar programs may provide benefits to our U.S. Mortgage Insurance segment is uncertain. We may face higher than anticipated losses if unemployment rates differ significantly from our expectations. A further deterioration in economic conditions or a further decline in home prices may adversely affect our loss experience in mortgage insurance. Any changes to the role or structure of Freddie Mac or Fannie Mae could have an adverse impact on our U.S. mortgage insurance business. We compete with government-owned and government-sponsored enterprises in our U.S. mortgage insurance business, and this may put us at a competitive disadvantage on pricing and other terms and conditions. Changes in regulations that affect the U.S. mortgage insurance business could affect our operations significantly and could reduce the demand for mortgage insurance. Fannie Mae, Freddie Mac and a small number of large mortgage lenders exert significant influence over the U.S. mortgage insurance market. A 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 our revenue. The amount of mortgage insurance we write could decline significantly if alternatives to private mortgage insurance are used or lower coverage levels of mortgage insurance are selected. We cede a portion of our U.S. mortgage insurance business to mortgage reinsurance companies affiliated with our mortgage lending customers, and this could reduce our profitability. Our U.S. mortgage insurance business could be adversely affected by legal actions under RESPA. Potential liabilities in connection with our U.S. contract underwriting services could have an adverse effect on our financial condition and results of operations. We have agreed to make payments to GE based on the projected amounts of certain tax savings we expect to realize as a result of our IPO. We will remain obligated to make these payments even if we do not realize the related tax savings and the payments could be accelerated in the event of certain changes in control. Provisions of our certificate of incorporation and bylaws and our Tax Matters Agreement with GE may discourage takeover attempts and business combinations that stockholders might consider in their best interests. Risks Relating to Our Common Stock The Board of Directors has decided to suspend dividends on our common stock until further notice. Our stock price will fluctuate.

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1276520--2/26/2010--GENWORTH_FINANCIAL_INC