Genworth to Recover $750M from UK PPI Ruling Favorable to AXA

A UK High Court ruled in favor of AXA, awarding $911 million in damages. Genworth Financial, which has an agreement with AXA, may recover $750 million from the ruling. The recovered funds will be used in line with Genworth's strategic priorities, including investing in growth, share buybacks, and debt reduction.

A significant ruling by the UK High Court has awarded AXA damages totaling approximately $911 million, stemming from a case involving mis-selling of Payment Protection Insurance (PPI) policies. The judgment, which finds Santander liable for AXA’s losses, has implications for Genworth Financial, Inc. (NYSE: GNW), which has an agreement with AXA related to the mis-selling liabilities.

The UK High Court awarded AXA damages, interest, and costs amounting to approximately £680 million, or $911 million, using a £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 to recover approximately $750 million, depending upon the applicable exchange rate at that time.

Genworth has stated that any recoveries from this ruling have not been factored into its capital allocation plans. The company plans to deploy any recovered funds in line with its stated capital allocation priorities: investing in growth through CareScout, returning cash to shareholders through its buyback program, and opportunistically paying down debt.

This ruling adds to the complexities surrounding Genworth’s financial landscape and could influence its future capital allocation decisions. It is important to note that the actual recovery amount may vary based on the outcome of any appeals and changes in future capital allocation decisions.

For more information, refer to Genworth’s press release [1] and Morningstar’s coverage of the ruling [2].

References:
[1] https://investor.genworth.com/news-events/press-releases/detail/1041/genworth-issues-statement-on-favorable-ruling-for-axa-in-uk
[2] https://www.morningstar.com/news/business-wire/20250725183377/genworth-issues-statement-on-favorable-ruling-for-axa-in-uk-payment-protection-insurance-case