Genworth Financial Inc · NYSE:GNW
Genworth Financial — Q2 2024 Earnings Presentation
21 slides from Genworth Financial's earnings presentation, Aug 1, 2024
Slide 1: 2Q Investor Presentation Earnings Summary
2Q Investor Presentation Earnings Summary July 31, 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: Genworth Strategic Pillars
Genworth Strategic Pillars Create shareholder value through Enact’s growing market value and capital returns Maintain self-sustaining, customer-centric legacy insurance companies, • including the LTC, life and annuity businesses Drive future growth through CareScout with innovative, consumer- • focu
Slide 4: Highlights for the 2nd Quarter of 2024
Highlights for the 2nd Quarter of 2024 Strategic Continued progress on the long-term care insurance (LTC) multi-year rate action plan (MYRAP) with $138M of gross incremental premium approvals; $29.2B estimated net present value achieved from in-force rate actions (IFAs) since 2012 CareScout continue
Slide 5: 2Q24 Results Summary – Genworth Consolidated (GAAP)
2Q24 Results Summary – Genworth Consolidated (GAAP) Enact: $165M1 Adjusted Operating Income (Loss)1 ($M) — Continued strong loss performance — Higher investment income with higher yields and average invested assets versus the prior year 2Q24 1Q24 2Q23 Long-Term Care Insurance: $(29)M 125 85 85 — Cur
Slide 6: Enact Segment
Enact Segment Primary IIF1 ($B) Earned Premiums ($M) 266 264 258 244 241 239 2Q24 1Q24 2Q23 2Q24 1Q24 2Q23 Primary NIW 13,619 10,526 15,083 Portfolio up 3% year-over-year driven by new insurance Earned premiums were higher versus prior quarter and prior written (NIW) and continued elevated persisten
Slide 7: Enact Segment
Enact Segment Benefits & Changes in Sufficiency to PMIERs2 ($M) Policy Reserves ($M) (Benefit) / Loss 2Q24 1Q24 2Q23 169% 163% 162% $(17) $20 $(4) 2,057 1,958 1,883 Loss Ratio (7)% 8% (2)% Primary Delqs (#) 19,051 19,492 18,065 Primary New Delqs (#) 10,461 11,395 9,205 Primary Paid Claims (#) 160 17
Slide 8: Proactively Managing LTC Insurance Risk
Proactively Managing LTC Insurance 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 $29.2B in estimated net present value achieved
Slide 9: LTC In-Force Rate Action Progress
LTC In-Force Rate Action Progress Approvals & Filings Cumulative Policyholder Responses since 2012 Approved Filings 2022 2023 1H23 1H24 50.9% 55.2% State Filings Approved 139 117 61 48 37.3% 44.1% 45.5% 16.4% 18.0% 22.0% 25.6% Impacted In-Force Premium ($M) 1,143 697 378 460 NFO 11.6% Weighted Avera
Slide 10: 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 ($M) 394 910 257 79 67 257 1,669 1,585 Earnings From In-Force Rate Actions4 1,482 1,269 534 416 489 907 Premiums, Premium Tax, Commissions, Other 585 378 150 263 721 216 Expenses, Net 198 254 757 84
Slide 11: U.S. Life Statutory Results
U.S. Life1 Statutory Results Statutory Pre-Tax Income2,3 ($M) Capital & Surplus2 ($B) and RBC Ratio2 $258 319% 314% $171 293% 3.6 3.5 $63 3.2 2Q24 1Q24 2Q23 Long-Term Care Insurance 106 151 (71) Life Insurance 9 (18) 26 Fixed Annuities 18 17 14 2Q24 1Q24 2Q23 Variable Annuities 38 108 94 Capital & S
Slide 12: Investment Portfolio Holdings
Investment Portfolio Holdings1 Composition of Portfolio Fixed Maturities by Sector Fixed Maturity Securities Sector Fair Value ($B) % Of Total $60.3B Government & Municipal 6.4 15% Residential & Commercial MBS3 2.2 5% Other Asset-Backed Securities 2.2 5% Fixed Maturities Corporate Bond Holdings: Fix
Slide 13: Holding Company Cash & Liquid Assets
Holding Company Cash & Liquid Assets1 ($M) 52 (36) 63 (19) (10) (22) 253 2812 3/31/2024 Enact capital Intercompany Share Debt service Debt retirement Other items 6/30/2024 returns tax payments repurchases $63M in capital returns from Enact received in 2Q24 ‒ $24M from quarterly dividend and $39M in
Slide 14: Capital Allocation & Shareholder Returns
Capital Allocation & Shareholder Returns Capital Allocation Priorities Invest in long-term growth Share Repurchase Program — Targeting $35M investment to the CareScout services business in 2024; invested approximately $30M in 2023 — CareScout Quality Network (CQN), a network of long-term care Incept
Slide 15: Appendix
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Slide 16: LTC Claims Trends by Product – Statutory
LTC Claims Trends by Product – Statutory LTC Direct Paid Claims by Product ($M) Paid claims on newer products continue to increase as policyholders approach peak claim age, as claims on the older 2,484 products past peak claim age decline 105 Flex, MFMP, & 2,196 2,244 Group 72 2,098 86 380 Lower cla
Slide 17: LTC In-Force Policy Information
LTC In-Force1 Policy Information 17 1 In-force data as of June 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 Includes
Slide 18: 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 19: Reconciliation of Net Income to Adjusted Operating Income (Unaudited)
Reconciliation of Net Income to Adjusted Operating Income (Unaudited) ($M) 2024 2023 2Q 1Q 2Q NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS $ 76 $ 139 $ 137 Add: net income attributable to noncontrolling interests 34 30 31 NET INCOME 110 169 168 Less: income (loss) from disc
Slide 20: 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 21: 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