GE plans spin-off of insurance assets.

General Electric Co., the world's largest transnational corporation, plans to spin off roughly half of its insurance assets through an initial public offering to be scheduled in the first half of 2004 for a new company called Genworth Financial Inc., the company said.

Genworth, which would encompass most of the life insurance assets and all of the mortgage insurance assets currently held by GE Financial Assurance Holdings Inc., would have an initial book value of $10 billion, according to Jeffrey R. Immelt, GE's chairman and chief executive officer.

GE would retain its other major insurance segment--Employers Reinsurance Corp.--as well as certain consumer marketing and financing operations, such as GE Mortgage Mexico, the Partnership Marketing Group and U.K.-based GE Life. The company also would retain an interest in what Immelt called "a piece of very stable, low return runoff block from the GEFA portfolio."

According to Immelt, the company, which plans to file for its IPO with the U.S. Securities and Exchange Commission in January 2004, would look to initially sell a 30% equity stake in the new company and subsequently reduce its ownership position over the next three years as Genworth transitions to being a fully independent company.

With the IPO, GE will have reduced its insurance-related assets to 15% of its total financial-services assets from 40% a year ago. In addition to the Genworth IPO, which accounts for 20 percentage points of the change, GE has already shed its Tokyo-based Edison Life businesses.