I’m pleased you’ve been introduced to Tralee Neville and Jason Macdonald, Eeva Kaartinen, Dr. and Mrs. Robert Poole, Al Gibbons, Tyone and Kimora Savage, Dr. William Clovis and Mark Sheehan in this Annual Report. Their stories are unique, but they share one thing – they inspire us.

That’s why our 7,000 Genworth employees work hard with our distribution partners to help people like these, and more than 15 million others, achieve financial security at key stages of life.

You can read detailed information about how that work translates into business results in the 10-K report that follows. Here, I’d like to share my thoughts on our 2007 performance, as well as our vision, our strategy and our future.

During a year marked by turmoil in the U.S. housing industry and disruption in the global financial markets, we delivered 2007 net operating income of $1.37 billion and net operating earnings per diluted share of $3.07 – up over the prior year but below our original target. While our overall performance across our businesses was positive, we were disappointed by the year-over-year earnings decline in our U.S. Mortgage Insurance segment. In this segment, our disciplined risk management and strong revenue growth enabled us to outperform competitors substantially, achieving $167 million in operating earnings and a full year mortgage insurance loss ratio that stood at less than half of what the rest of the industry on average experienced in 2007. But there are things we would have done differently in selected geographic and product exposures and we will learn from these.

Looking at our other two segments, which represent the majority of our earnings, we delivered strong core growth in several key product lines in 2007, including our international lines – payment protection and mortgage insurance – wealth management, retirement income and universal life insurance. This growth reflects the diversity and strength of our business portfolio. We have established positions across multiple growth markets, with good momentum, and we continue to target the 13 to 14 percent operating return on equity goal we established for the 2010 to 2011 timeframe.

Moving forward, we will maintain our vision of being a leader in providing solutions that help people achieve financial security at key stages of life. We want to help people achieve homeownership through the use of mortgage insurance; create life security by providing life insurance, payment protection coverage and wellness programs; build savings and wealth through our wealth management offerings and financial advisory services; and establish retirement security through retirement income products and long term care insurance.

To fulfill this vision, we outlined four strategic goals last year and have made good progress toward them:

Becoming consumer wanted – working to meet consumers’ needs today while helping them protect against future risk. We’re developing a deeper understanding of consumers’ needs through research and market segmentation, while also creating innovative financial security solutions. For example, our Cornerstone Advantage® product helps more people secure their future independence by making long term care insurance more simple and affordable. This, coupled with our wellness and care coordination services, helps create real solutions for people’s long term care needs. Ultimately, we want to provide offerings that consumers seek out and want – challenging the notion that insurance must be sold and not bought – and enabling our distribution partners to meet the needs of their customers.

Being distributor preferred – collaborating with our distribution partners around the world to offer innovative products, specialized services, education and technology that provide them with value at every part of the business relationship. We share our global expertise and local market knowledge to help our distributors grow. To advance understanding of key issues affecting our markets and customers, we work in partnership with thought leaders in business, government and academia. Our studies on mortgage trends in Canada, Australia and other countries, as well as forums such as our Retirement and Long Term Care symposia, bring together opinion leaders to share ideas and develop common solutions in response to some of the most important issues we face today.

Leveraging capital markets leadership – using a combination of traditional insurance disciplines and sound capital markets-based techniques to enhance risk management, capital efficiency and support new business models. For example, we issued the industry’s first securitization that efficiently financed statutory term life insurance reserves. We also were the first to do the same for universal life insurance reserves and have continued to innovate in this area during the past four years.

Being people driven – fostering an environment that welcomes different backgrounds, capitalizes on diverse talents, invests in the capabilities of our people and engages them in improving our business every day. Our Genworth Development Center offers thousands of online and in-person courses to support employees’ growth. We know our people drive our success so we want to support their success.

Our progress toward these strategic initiatives positions us well for the future. In the United States, our Retirement and Protection segment now represents half of our total operating earnings and is deepening its broad product and service capabilities while sharpening its relationships with key distributors. Our International segment reached 39 percent of total operating earnings and remains focused on payment protection and mortgage insurance while selectively exploring new opportunities. And our U.S. Mortgage Insurance segment is operating through a very difficult U.S. residential real estate market while positioning itself to take advantage of a shifting market and create a better profile for the future.

We’ve made good progress, but we have more work to do. We’re confident we have the right vision and strategy, a solid financial foundation and sound risk disciplines to help us take on the challenges in today’s markets, while seizing opportunities. As we execute our strategy, we’ll focus on five key areas in 2008. We’ll continue to:

1. Navigate the storm in U.S. Mortgage Insurance. We see the potential for significant profitable revenue growth in the segment, as people increasingly are demonstrating a preference for the safety and security of fixed-rate mortgages with mortgage insurance and as loan standards become more conservative. In addition, our existing business portfolio will benefit from substantial reinsurance protection. As we move ahead, we’ll continue the important work we began in 2007 to help ensure that the new business we originate performs well. And, we’ll keep managing risk through key actions including tightening underwriting standards, expanding geographic constraints and increasing prices.
   
   
2. Grow our Wealth Management and Retirement Income businesses. We’ll continue to focus on product innovation and enhanced service offerings with risk management disciplines. We’ll also selectively pursue acquisitions as we capitalize on emerging growth opportunities in these areas.
   
   
3. Maintain the responsible growth of our International platforms. We’ll apply our product expertise, consumer insights and local market knowledge to deepen mortgage insurance and payment protection penetration in established markets. We’ll selectively approach new markets and assess opportunities to extend our retirement income and wealth management solutions to targeted countries. For each, we will put a priority on growing prudently, with disciplined risk management and strong controllership.
   
   
4. Strengthen our Long Term Care and Life Insurance businesses. In Long Term Care Insurance, we will grow our new block of business profitably through additional products and distribution expansion leveraging our independent distributors, career sales operations and partnership with AARP. At the same time, work is underway to improve the performance of our old block of business. Within our Life Insurance business, we will expand our position in universal life, while concentrating our term life business on the most attractive consumer segments and distribution channels.
   
   
5. Focus on strong capital management. We’ll emphasize extracting underperforming capital and redeploying it to higher return areas or returning it to our shareholders. And we’ll maintain our cost and productivity disciplines.

The foundation of our efforts is our clear vision and our shared commitment with our business partners to bring financial security to more people.

Every day, our employees are driven by this vision, demonstrating our values of ingenuity, clarity, performance, heart and initiative. And their passion to make a difference inspires us to get involved with the communities in which we live and work – from volunteering with local children’s programs to finding ways to improve the environment. Through their ideas and inspiration, our employees are helping people around the world achieve their hopes and dreams, and bringing real value to our business partners. Simply put, our employees “think it possible” – and by doing this, make possibilities become realities.

"Think it possible”SM is the spirit of Genworth. We believe great things can happen when you think differently, and ask “what if?” and “why not?” We want to turn opportunities into reality for people like those you’ve read about in this report. When I think about the future, I’m optimistic and excited about all that’s possible for Genworth – the consumers we serve, our business partners, our shareholders, our employees and our communities. Thank you for being a part of our journey.

Sincerely,

Michael D. Fraizer
Chairman, President and
Chief Executive Officer
March 2008