Genworth Financial, a U.S. insurance and financial services company, has responded to a UK Court of Appeal ruling against AXA in litigation involving Santander companies and liabilities tied to the historic mis-selling of Payment Protection Insurance policies.
The Court of Appeal allowed Santander’s appeal, setting aside the trial court judgment that had favoured AXA on most of its indemnity claim. It also rejected AXA’s appeal against the trial court decision dismissing its contribution claim.
The ruling means Santander was found not liable for the vast majority of AXA’s losses arising from the mis-selling of PPI policies, according to Genworth.
Genworth said it is reviewing the judgment with AXA and considering possible next steps, including further appeals.
While we are very disappointed in the decision from the Court of Appeal, we are analyzing the judgment and working with AXA to evaluate next steps, including options for further appeals.
Tom McInerney, president and CEO of Genworth
McInerney said Genworth hadn’t included potential recoveries from the litigation in its capital allocation plans. The company therefore continues to focus on generating shareholder value through Enact, growing CareScout and maintaining self-sustainability in its Closed Block.
The dispute concerns losses connected with PPI mis-selling complaints. The policies were underwritten by two companies acquired by AXA from Genworth in 2015, while the policies themselves had been sold by a business acquired by Santander in 2009.
The Court of Appeal decision reduces the scope for AXA to recover losses from Santander under the claims considered in the litigation.
Genworth hasn’t disclosed any expected recovery amount following the ruling and said the final outcome remains dependent on whether further appeals proceed and how they are resolved.
Genworth also said future capital allocation decisions aren’t dependent on proceeds from the AXA litigation. The company had not assumed any recovery from the case in its existing plans.
