Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Q3 2016 Earnings Presentation
15 slides from Sagen MI Canada's earnings presentation, Nov 4, 2016
Slide 1: Third Quarter 2016 Results
Third Quarter 2016 Results November 4th, 2016 Q3 2016 Results Genworth MI Canada Inc. 1
Slide 2: Forward-looking and non-IFRS statements
Forward-looking and non-IFRS statements Public communications, including oral or written communications such as this document, relating to Genworth MI Canada Inc. (the “Company”, “Genworth Canada” or “MIC”) often contain certain forward-looking statements. These forward-looking statements include, b
Slide 3: Q3 2016 financial results
Q3 2016 financial results $MM except ROE, EPS & Q3 Q2 Q3 Q/Q Y/Y Q3 key highlights 2016 2016 2015 MCT • Increased quarterly dividend by 5% to $0.44 per common Premiums share $223 $249 $260 -10% -14% written • Premiums written decreased Q/Q due to lower portfolio Loss ratio 25% 21% 21% +4 pts +4 pts
Slide 4: Top line
Top line New insurance written ($ billions) Premiums written ($ millions) Transactional Portfolio Transactional Portfolio $37.0 $705 $118 $6.5 $104 $25.2 $25.7 Q4 $181 $22 $470 $32 Q4 $6.2 $9.6 $16.1 Q3 $236 $201 $25.9 $24 $78 Q3 $8.3 $6.1 $6.9 Q2 $183 $170 $22 Q2 $6.8 $4.1 $5.8 $5.9 $4.5 Q1 $104 $9
Slide 5: New mortgage rules
New mortgage rules NEW MORTGAGE RULES DRIVE HIGHER QUALITY BUT SMALLER MARKET SIZE High Loan-to-Value Low Loan-to-Value Effective October 17, 2016, for Effective November 30, 2016, for new originations: new originations: Product Product • GDS/TDS of 39% & 44% calculated using greater of contract Low
Slide 6: High portfolio quality
High portfolio quality Credit score Median home price (In ‘$000s) Gross debt service ratio distribution (%) % Score <660 (R) Avg score (L) <=35 >35 to <=39 >39 to <=41 >41 to <=43 >43 16% 752 $297 $295 7 $291 9 10 11 $280 16% $275 $270 $255 $240 13 $232 $225 91 90 89 71 716 3% YTD '16 YTD '16 '07 '0
Slide 7: Delinquency trends
Delinquency trends Delinquencies outstanding New delinquencies, net of cures, by region 2,034 2,027 568 QoQ 1,961 ∆ 38 1,829 162 201 493 +141 Total 1,715 189 487 132 222 211 Total 440 33 92 33 -19 Prairies1 113 212 204 Prairies1 26 66 +7 Atlantic 198 82 76 352 504 Atlantic 138 656 93 +30 578 624 52
Slide 8: Solid financial performance
Solid financial performance $MM except EPS & BVPS Q3’16 Q2’16 Q3’15 Q3 highlights Transactional premiums written $201 $170 $236 • Transactional premiums written lower by 15% Y/Y, primarily due to lower volumes, Portfolio premiums written 22 78 24 partially offset by a higher average premium rate Tot
Slide 9: Solid underwriting profitability
Solid underwriting profitability Underwriting profitability ($ millions) Highlights Premiums earned $148 $151 $154 $158 $162 • Single up-front premium model provides visibility 32 41 into future premiums earned: Losses on claims 31 35 37 • Eight consecutive quarters of Q/Q Expenses 30 28 27 28 33 in
Slide 10: Investments contribute steady income
Investments contribute steady income Total Invested Assets ($6.2B portfolio1) Net Investment Income ($ millions)5 $169 16% Federals Duration: 3.8 years Q4 $44 $130 Provincials Book yield: 3.2%1 Investment grade 32% Invested assets corporates2 (C$ millions, unless noted) Q3 $42 $44 Preferred shares $
Slide 11: Capital management
Capital management Regulatory capital as at September 30th, 2016 (by category, $ millions unless otherwise noted) Highlights Capital in Increased dividend by 5% to $0.44 per 3,762 excess of common share 150% Capital in excess of 220% 262 New Capital framework expected to be Operational Risk 584 effe
Slide 12: Overview of new capital framework
Overview of new capital framework Total Assets Required = Base Supplemental Premium Requirement Requirement Liabilities More Risk Sensitive Based Triggered When Price to • Unearned Premiums on: Income Metric Exceeds Reserve • Outstanding Balance OSFI Prescribed • Reserve for Incurred But • Modified
Slide 13: New capital framework LTV illustration
New capital framework LTV illustration Total Asset Requirement by LTV (New vs. current framework, by LTV, 730 credit score at issue; $300k mortgage) Highlights • Premium rate increases likely in 2017 in response to higher capital levels from proposed base and supplementary requirement Table above ba
Slide 14: Key takeaways
Key takeaways Keen focus on risk management Proven Balanced approach to writing new business business model has positioned MIC for Proactive loss mitigation future programs performance Investing in our customer experience strategy Q3 2016 Results Genworth MI Canada Inc. 14
Slide 15: Investor Relations
Jonathan A. Pinto, MBA, LL.M Vice President, Investor Relations 905.287.5482 jonathan.pinto@genworth.com Investor Relations investor.genworthmicanada.ca investor@genworth.com Q3 2016 Results Genworth MI Canada Inc. 15