Sagen MI Canada Inc · TSX:MIC.PR.A

Sagen MI Canada — Genworth MI Canada — Q4 2014 Earnings Presentation

16 slides from Sagen MI Canada's earnings presentation, Feb 11, 2015

  1. Slide 1: Fourth Quarter 2014

    Genworth MI Canada Inc. Fourth Quarter 2014 February 11, 2015

  2. Slide 2: Forward-Looking and Non-IFRS Statements

    Forward-Looking and Non-IFRS Statements This presentation relating to Genworth MI Canada Inc. (the “Company”, “Genworth Canada” or “MIC”) includes certain forward-looking statements. These forward-looking statements include, but are not limited to, statements with respect to the Company’s future ope

  3. Slide 3: 2014 Financial Results

    2014 Financial Results Q4 2014 Q/Q 2014 Y/Y Full Year Highlights Premiums written $178 MM -18% $640 MM +25%  Strong top line growth of +25% Y/Y Loss ratio 26% +5 pts 20% -5 pts  Loss ratio of 20%, 5 points lower Y/Y Net Operating Income $84 MM -10% $366 MM +5%  Seasonal losses driving EPS perform

  4. Slide 4: High Quality Insurance Portfolio

    High Quality Insurance Portfolio 737 730 733 726 727 727 Highlights Average 720 716 Credit Score '07 '08 '09 '10 '11 '12 '13 '14  Credit score up 21 points since 2007  Average home price 29% below CREA ($000’s) national average price of $407K Average 296 301 304 315 Home Price 247 256 266 284  Gr

  5. Slide 5: Stable Delinquency Trend

    Stable Delinquency Trend Outstanding Delinquencies Highlights  Y/Y delinquency improvement reflects lower 1,830 1,860 Other 68 78 1,756 delinquencies in Ontario and BC 1,703 1,708 184 206 75 76 92 Atlantic 198 199 207  Improvement in delinquencies partially offset 482 527 by Alberta, Quebec and th

  6. Slide 6: Changing Economic Environment in 2015

    Changing Economic Environment in 2015 Market Dynamics Impact to Business  Unemployment rate likely modestly higher  Oil is anticipated to be in the $50-$65 and home prices modestly lower in oil USD range for 2015 producing regions (Alberta, Newfoundland, Saskatchewan)  2015 GDP outlook of 2.1% 

  7. Slide 7: Alberta exposure manageable

    Alberta exposure manageable Regional Dispersion Alberta Effective Loan-to-Value by Book Year 100 High LTV 13% 20% 90 5% 80 4% 14% 70 60 50 43% 40 Low LTV <=2009 2010 2011 2012 2013 2014 Estimated Alberta Atlantic Ontario outstanding balance of 7.6 6.8 2.5 3.1 3.3 4.0 4.8 B.C. Prairies Quebec insured

  8. Slide 8: Alberta Performance Drivers

    Alberta Performance Drivers Frequency Severity 8% (000) Average price Unemployment rate (UE) 500 7% 450 6% 400 5% 350 300 4% 250 3% 200 '07 '09 '11 '13 '15E 07 09 11 13 15E Source: Statistics Canada; ‘15E company forecast; exit rates Source: CREA; yearly averages; ‘15E company forecast  Modest job

  9. Slide 9: Improved Alberta Portfolio

    Improved Alberta Portfolio Market Dynamics 2014 vs. 2007 Underwriting standards  Better underwriting quality in recent years  Higher risk products eliminated prior to 2011 Portfolio quality  Stronger borrower profile – average credit score up 21 points in Alberta since 2007 Government policy acti

  10. Slide 10: Solid Financial Performance

    Solid Financial Performance $MM except EPS and BVPS Q4’14 Q3’14 Q4’13 Q4 Highlights Premiums written $178 $217 $129  Strong top line performance Premiums earned 143 140 142 continues Losses on claims 37 30 31  Loss ratio of 26% reflects typical Expenses 30 24 33 winter seasonality Underwriting inc

  11. Slide 11: Strong Premiums Written Growth

    Strong Premiums Written Growth Premiums Written Highlights ($millions)  Strong sales momentum in 2014 expected to continue into 2015 25% Premiums Written $640 ($millions) $640 $512 82 Low LTV +28% 178 $512 Q4 Low LTV 65 129 High LTV +25% Q3 217 557 Q2 161 High LTV 447 Q1 137 160 2013 2014 84 84 201

  12. Slide 12: Solid Underwriting Profitability

    Solid Underwriting Profitability Underwriting Profitability ($millions) Highlights Premiums earned $142 $141 $141 $140 $143 Losses on claims 31 28 17 30 37  Full year loss ratio of 20% 27 27 24 Expenses 33 30  Full year expense ratio of 19% in line with target Underwriting 97 78 86 87 profit 76 

  13. Slide 13: Investments Contribute Steady Income

    Investments Contribute Steady Income Highlights  Focus on high investment quality Common Equity Cash 3% 3%  Diversified portfolio with over 50% government securities and cash Corporates 43% Federal  Adjusting portfolio mix in light of low rate 34% environment Total $5.4 billion Portfolio Invested

  14. Slide 14: Strong Capital Position

    Strong Capital Position Minimum Capital Test Ratio (MCT) Highlights 229% 231%  Completed $75 million share repurchase in Q4 224% 225% 44%  Holding company cash and liquid securities of 46% 39% 40% $143 million  Focused on balancing capital strength, flexibility and efficiency 185% 185% 185% 185%

  15. Slide 15: Building on Growth Momentum

    Building on Growth Momentum  Prudently expand market share  Proactive risk management and loss mitigation  Strong government relations  Efficient capital structure  Adjacent opportunities  Employ and engage top talent Well-positioned and remain focused on strategic course Genworth MI Canada In

  16. Slide 16: Question and Answer

    Question and Answer Contact: Samantha Cheung Vice-President, Investor Relations 905.287.5482 samantha.cheung@genworth.com www.genworth.ca Genworth MI Canada Inc. 16 Q4 2014

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