Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Q3 2013 Earnings Presentation
13 slides from Sagen MI Canada's earnings presentation, Oct 30, 2013
Slide 1: Third Quarter 2013
Genworth MI Canada Inc. Third Quarter 2013 October 30, 2013
Slide 2: Forward-looking and non-IFRS statements
Forward-looking and non-IFRS statements This presentation includes certain forward-looking statements. These forward-looking statements include, but are not limited to, statements with respect to the Company’s future operating and financial results, expectations regarding premiums written, capital e
Slide 3: Income up 12%, EPS up 15% year-over-year
Income up 12%, EPS up 15% year-over-year Q3 2013 Q3 2012 Net operating income $91 million $81 million Operating Return on equity 13% 12% Operating earnings per share (diluted) $0.94 $0.82 Book Value Per Share (diluted, including AOCI) 11% CAGR $31.32 $31.82 $30.62 $30.94 $28.72 Q3 2012 Q4 2012 Q1 20
Slide 4: Strength across key metrics
Strength across key metrics Priority Q3 2013 Result Premiums written $161 million of new premiums Risk management Loss ratio of 22% Investments $5.3 billion investment portfolio Book yield of 3.7% (Sept 30/13) Capital 218% MCT Announced 9% dividend increase from $0.32 to $0.35 per share Genw
Slide 5: Market themes
Market themes Drivers Implications Housing Market: Premiums Written: - Balanced - Modest increase in high LTV mortgage - Resales flat year -to-date market in coming quarters - Home prices up modestly - Portfolio quality should remain strong Unemployment: Losses on Claims: - Stable around 7% - Losses
Slide 6: Stable delinquencies quarter-over-quarter
Stable delinquencies quarter-over-quarter Number of delinquencies & Insurance Delinquency rate in-force Sept 30 June 30 Sept 30 Sept 30 2013 2013 2012 2013 Ontario 461 453 573 46% BC 311 318 341 15% Alberta 284 301 475 16% Quebec 463 451 548 14% Other 259 255 246 9% Total 1,778 1,778 2,183 100% Deli
Slide 7: Increased profitability
Increased profitability $ millions Q3 2013 Q2 2013 Q3 2012 (except EPS and book value) Net premiums written $161 $137 $178 Premiums earned 143 143 147 Losses on claims (32) (35) (44) Underwriting income 84 82 77 Net investment income 45 44 39 (excluding gains/losses) Net operating income $91 $88 $81
Slide 8: Top line reflects typical seasonality
Top line reflects typical seasonality Premiums written 11 ($millions) 10 18 2012 regulatory changes to mortgage 2 lending led to slower real estate activity in 26 17 3 H1 2013 3 160 11 Portfolio 3 141 Premiums from purchases down 12% year- 108 Refinance 99 over-year 71 Purchase Selectively par
Slide 9: Trend of loss ratio improvement
Trend of loss ratio improvement Underwriting profitability ($millions) Earned premium $147 $147 $144 $143 $143 Strong portfolio quality & stable economic conditions positively Losses on 32 claims 44 46 44 35 influencing loss performance 26 27 Expenses 26 28 26 Q3 loss ratio of 22%, improved by 8
Slide 10: Investment portfolio remains high quality
Investment portfolio remains high quality Balanced high quality portfolio • Primarily fixed income Cash 2% • 51% federal & provincial bonds Common Equity 4% • 43% corporate Federal • 94% of bonds ‘A’ or higher 35% Total $180 million positive mark-to-market $5.3 billion $ Billion Portfolio Assets
Slide 11: Strong capital position
Strong capital position Minimum Capital Test Ratio (MCT) 216% 216% 218% 31% 31% 33% Buffer 170% 162% 17% 25% Internal MCT ratio target 185% 185% 185% 145% 145% 2011 2012 Q1 2013 Q2 2013 Q3 2013 Repurchased $55 million common shares during quarter Genworth MI Canada Inc. 11 Q32013 October 30, 2013
Slide 12: Core strengths
Core strengths Proven business model Disciplined execution Strong risk focus Capital flexibility Solid financial foundation Genworth MI Canada Inc. 12 Q32013 October 30, 2013
Slide 13: Question and Answer
Question and Answer SAMANTHA CHEUNG For further info: VP INVESTOR RELATIONS 905 287 5482 samantha.cheung@genworth.com www.genworth.ca Genworth MI Canada Inc. 13 Q32013 October 30, 2013