Genworth Financial Inc · NYSE:GNW
Genworth Financial — Q3 2024 Earnings Presentation
22 slides from Genworth Financial's earnings presentation, Nov 7, 2024
Slide 1: 3Q Investor Presentation: Earnings Summary
3Q Investor Presentation Earnings Summary November 6, 2024 1
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans,"
Slide 3: Financial Performance in 3rd Quarter
Financial Performance in 3rd Quarter — Net income1 of $85M, or $0.19 per diluted share, and adjusted operating income1,2 of $48M, or $0.11 per diluted share — Enact reported adjusted operating income of $148M1; distributed $81M in capital returns to Genworth — U.S. life insurance companies’ RBC3 rat
Slide 4: 3rd Quarter Progress on Genworth's Strategic Pillars
3rd Quarter Progress on Genworth’s Strategic Pillars Create shareholder value Maintain self-sustaining, Drive future growth through through Enact’s growing customer-centric legacy CareScout with innovative, market value and insurance companies, consumer-focused aging care capital returns including t
Slide 5: 3Q24 CareScout Update
CareScout Quality Network (CQN) Build-Out 3Q24 CareScout Update Genworth is rolling out new long-term care solutions for aging Percentage of Aged 65+ U.S. Census Coverage, Number loved ones. These solutions range from assessments, to of Network Providers and Number of Active States finding quality c
Slide 6: 3Q24 Results Summary – Genworth Consolidated (GAAP)
3Q24 Results Summary – Genworth Consolidated (GAAP) Enact: $148M1 Adjusted Operating Income (Loss)1 ($M) — Continued favorable cure performance driving reserve releases — Higher investment income with higher yields and average 3Q24 2Q24 3Q23 invested assets versus the prior year 48 125 42 Long-Term
Slide 7: Enact Segment
Enact Segment Primary IIF1 ($B) Earned Premiums ($M) 268 266 262 249 244 243 3Q24 2Q24 3Q23 3Q24 2Q24 3Q23 Primary NIW 13,591 13,619 14,391 Portfolio up 2% year-over-year driven by new insurance Earned premiums were higher versus prior quarter and prior written (NIW) and continued elevated persisten
Slide 8: Enact Segment
Enact Segment Benefits & Changes in Sufficiency to PMIERs2 ($M) Policy Reserves ($M) (Benefit) / Loss 173% 169% 162% 3Q24 2Q24 3Q23 2,190 2,057 2,017 $12 $18 $(17) Loss Ratio 5% (7)% 7% Primary Delqs (#) 21,027 19,051 19,241 Primary New Delqs (#) 12,964 10,461 11,107 Primary Paid Claims (#) 220 160
Slide 9: Proactively Managing LTC Risk
Proactively Managing LTC Risk Stabilizing LTC legacy block through the MYRAP to protect claims-paying ability Focused on cash flows, economic value, and statutory earnings — GAAP results do not impact cash flows or economic value Approximately $30B in estimated net present value achieved since 2012
Slide 10: LTC In-Force Rate Action Progress
LTC In-Force Rate Action Progress Approvals & Filings Cumulative Policyholder Responses since 2012 Approved Filings 2022 2023 3Q23 YTD 3Q24 YTD 56.9% 44.1% 45.5% 50.9% State Filings Approved 139 117 88 72 37.3% 27.0% NFO 16.4% 18.0% 22.0% Impacted In-Force Premium ($M) 1,143 697 528 695 11.6% RBO 25
Slide 11: Impact of In-Force Rate Actions on Pre-Tax LTC Statutory Earnings
Impact of In-Force Rate Actions on Pre-Tax LTC Statutory Earnings1,2,3 LTC Statutory Pre-Tax Earnings ($M) 394 910 257 79 88 248 1,669 1,585 1,482 Earnings From In-Force Rate Actions4 1,269 1,317 534 416 1,118 489 306 585 263 297 Reserve Changes, Net 378 150 342 147 Legal Settlement Impacts, Net 684
Slide 12: U.S. Life Statutory Results
U.S. Life1 Statutory Results Statutory Pre-Tax Income2,3 ($M) Capital & Surplus2 ($B) and RBC Ratio2 317% 319% 303% $171 3.7 3.6 3.4 $30 ($18) 3Q24 2Q24 3Q23 Long-Term Care Insurance (9) 106 21 Life Insurance (29) 9 (40) Fixed Annuities 3 18 32 3Q24 2Q24 4Q23 Variable Annuities 17 38 17 Capital & Su
Slide 13: Investment Portfolio Holdings
Investment Portfolio Holdings1 Composition of Portfolio Fixed Maturities by Sector Fixed Maturity Securities Sector Fair Value ($B) % Of Total $62.6B Government & Municipal 6.8 15% Residential & Commercial MBS3 2.2 5% Other Asset-Backed Securities 2.2 4% Fixed Maturities Corporate Bond Holdings: Fix
Slide 14: Holding Company Cash & Liquid Assets
Holding Company Cash & Liquid Assets1 ($M) (36) 60 (12) (15) 81 10 3692 2812 6/30/2024 Enact capital Net Share Debt service Debt retirement Other items 9/30/2024 returns intercompany repurchases tax payments $81M in capital returns from Enact received in 3Q24 - $23M from quarterly dividend and $58M
Slide 15: Capital Allocation & Shareholder Returns
Capital Allocation & Shareholder Returns Capital Allocation Priorities Invest in long-term growth Share Repurchase Program — Planning $35M investment to the CareScout services business in 2024; invested approximately $30M in 2023 — CQN, a network of long-term care providers, is available in 49 Incep
Slide 16: Appendix
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Slide 17: LTC Claims Trends by Product – Statutory
LTC Claims Trends by Product – Statutory Paid claims on newer products continue LTC Direct Paid Claims by Product ($M) to increase as policyholders approach peak claim age, as claims on the older products past peak claim age decline 2,484 Flex, MFMP, & 105 Group 2,196 2,244 Lower claim payments obse
Slide 18: LTC In-Force Policy Information
LTC In-Force1 Policy Information 18 1 In-force data as of September 30, 2024 and excludes assumed business from Riversource, Travelers (through Brighthouse Financial), & Continental Life; 2 Includes policies sold in California between 2010 and 2013; 3 My Future My Plan (AARP branded product); 4 Incl
Slide 19: Use of Non-GAAP Measures
Use of Non-GAAP Measures Management uses non-GAAP financial measures entitled "adjusted operating income (loss)" and "adjusted operating income (loss) per share” to evaluate performance and allocate resources. Adjusted operating • income (loss) per share is derived from adjusted operating income (lo
Slide 20: Reconciliation of Net Income to Adjusted Operating Income (Unaudited)
Reconciliation of Net Income to Adjusted Operating Income (Unaudited) ($M) 2024 2023 3Q 2Q 3Q NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS $ 85 $ 76 $ 29 Add: net income attributable to noncontrolling interests 33 34 31 NET INCOME 118 110 60 Less: loss from discontinued ope
Slide 21: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,”
Slide 22: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements • the lack of availability, affordability or adequacy of reinsurance to protect the company against losses; • • a decrease in the volume of high loan-to-value home mortgage originations or an increase in the volume of mortgage insurance cancellati