Helia Group Limited · ASX:HLI
Helia — Genworth Mortgage Insurance Australia — Q1 2015 Earnings Presentation
20 slides from Helia's earnings presentation, Apr 29, 2015
Slide 1: Genworth Mortgage Insurance Australia 1Q 2015 Financial results presentation
Genworth Mortgage Insurance Australia 1Q 2015 Financial results presentation 29 April 2015 ©2015 Genworth Mortgage Insurance Australia Limited. All rights reserved.
Slide 2: Disclaimer
Disclaimer This presentation contains general information in summary form which is current as at 31 March 2015, unless otherwise stated. It may present financial information on both a statutory basis (prepared in accordance with Australian accounting standards which comply with International Financi
Slide 3: Overview of 1Q 2015 financial performance
Overview of 1Q 2015 financial performance Underlying Net Profit After Tax (NPAT1) for 1Q15 of $69.7m Reported NPAT for 1Q15 of $89.5m and includes $19.8m of post tax mark-to-market gains New Insurance Written (NIW) for 1Q15 of $7.2bn compared to $8.7bn for the pcp Gross Written Premium (GWP)
Slide 4: 1Q 2015 income statement
1Q 2015 income statement (A$ millions) Pro Forma 1Q14 Actual 1Q15 Change Gross written premium 159.7 127.7 (20.0%) Movement in unearned premium (32.6) 3.0 (109.2%) Gross earned premium 127.1 130.7 2.9% Outwards reinsurance expense (18.9) (19.9) 5.6% Net earned premium 108.2 110.8 2.4% Net claims inc
Slide 5: Residential mortgage lending market
Residential mortgage lending market Investment vs. Owner Occupied (APRA statistic) Investment vs. Owner Occupied1 (GMA) $ bn, % $bn, % 37.1% 34.8% 33.9% 32.1% 32.8% 31.1% 32.7% 28.8% 26.8% 24.6% 25.1% 24.2% 23.8% 124.9 21.5% 104.8 75.6 84.0 81.3 77.7 68.2 14.6 10.2 196.3 211.6 9.5 9.1 186.7 7.7 6.6
Slide 6: Residential mortgage lending market
Residential mortgage lending market HLVR Penetration $ bn, % Loans approved LVR<60% Loans approved LVR 60%-80% Loans approved LVR 80%-90% Loans approved LVR>90% HLVR Loans (% of New Residential Loan Approvals) 36.9% 34.0% 34.3% 34.0% 33.7% 33.3% 30.5% 41.4 41.9 71.9 46.2 37.3 25.8 30.7 60.5 41.3 43.
Slide 7: New insurance written
New insurance written NIW 1 by original LVR2 band (quarterly) NIW 1 by product type (quarterly) $ billions, % $ billions, % 9.8 9.1 9.8 8.7 8.6 9.1 8.7 8.6 26.6% 29.7% 7.2 0.3% 7.2 34.2% 30.9% 28.7% 48.1% 98.9% 99.2% 54.9% 98.5% 98.7% 48.9% 51.4% 99.1% 57.2% 25.2% 16.9% 17.7% 15.4% 14.1% 1Q14 2Q14 3
Slide 8: Insurance in force
Insurance in force Insurance in force (IIF)1 by original LVR2 band as at 31 IIF1 by product type, as at 31 December 2014 and 31 March 2015 December 2014 and 31 March 2015 Total IIF $316 billion as at 31 March 2015 % 89% 89% 30% 30% 29% 29% 16% 16% 9% 9% 8% 8% 6% 6% 2% 2% 6% 6% 3% 3% 1% 1% 1% 1% <60%
Slide 9: Gross written premium
Gross written premium GWP and flow average price (GWP/NIW 1) Flow business – GWP walk $ millions, % $ millions 1.84% 1.80% 1.80% 1.79% (3.0) 1.77% (1.0) (28.0) 159.7 159.7 157.5 163.1 127.7 153.9 127.7 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 Avg. price Volume LVR mix 1Q15 GWP Average Premium Avg Premium <80%
Slide 10: Delinquency development
Delinquency development Favourable performance post 2009 • The 2008 Book Year was affected by the economic downturn experienced across Australia and heightened stress experienced among self- employed borrowers particularly in Queensland • The 2010 to 2014 Book Years are performing favourably relativ
Slide 11: Net incurred claims
Net incurred claims Average paid claim1 Average reserve per delinquency2 $’000 $’000 65.1 60.5 62.5 58.6 49.6 46.6 44.4 45.0 43.3 41.7 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15 Composition of net incurred claims (A$ millions) 1Q14 2Q14 3Q14 4Q14 1Q15 Number of paid claims (#) 462 419 350 314
Slide 12: Balance sheet and unearned premium reserve
Balance sheet and unearned premium reserve Strong stable balance sheet with $4.1bn in Cash and Investments and $1.36bn in UPR (A$ in millions) 31 Dec 14 31 Mar 15 Unearned premium by book year as at 31 March 2015 Assets Total UPR $1.36bn Cash and cash equivalents 88.6 187.5 2008 2009 1% 3% Investmen
Slide 13: Insurance ratio analysis
Insurance ratio analysis Expenses Combined ratio1 $ millions, % $ millions, % 51.2% 52.6% 41.3% 47.8% 41.6% 27.9% 27.3% 25.3% 26.3% 26.3% 30.3 29.5 30.3 30.8 18.7 17.6 17.3 17.5 15.3 27.4 25.6 24.0 28.0 12.1 12.0 11.9 13.0 12.8 17.3 17.7 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15 Acq. costs U
Slide 14: 1Q 2015 regulatory capital position
1Q 2015 regulatory capital position Level 21 (A$ in millions) 31 Dec 14 31 Mar 15 Capital Base Common Equity Tier 1 Capital 2,742.1 2,640.0 Tier 2 Capital 112.0 98.0 Regulatory Capital Base 2,854.1 2,738.0 Capital Requirement Probable Maximum Loss (‘PML’) 2,586.5 2,580.2 Net premiums liability deduc
Slide 15: Genworth Australia 2015 financial outlook
Genworth Australia 2015 financial outlook Key financial measures – FY 2015 guidance Net earned premium growth Up to 5% Full Year Loss ratio 25.0% to 30.0% Dividend Payout Ratio 50-70% Full year outlook is subject to market conditions and unforeseen circumstances or economic events 1Q 2015 RESULTS PR
Slide 16: Supplementary Slides
Supplementary Slides
Slide 17: Income statement reconciliation – 1Q 2015
Income statement reconciliation – 1Q 2015 Reconciling to the USGAAP figures reported by Genworth Financial, Inc. USGAAP AU Adjustments USGAAP AU Add Back: Non USGAAP AU Total GMA Segment Segment Results in Controlling Segment Results Results + (a) (b) (c) (d) Adjust. Group USD Interest (NCI) + NCI N
Slide 18: Quarterly financial information
Quarterly financial information Statement of comprehensive income (A$ in millions) Pro forma 1Q14 Actual 2Q14 Actual 3Q14 Actual 4Q14 Actual 1Q15 Gross written premium 159.7 153.9 157.5 163.1 127.7 Movement in unearned premium (32.6) (25.0) (26.6) (29.4) 3.0 Gross earned premium 127.1 128.9 130.9 13
Slide 19: Quarterly financial information
Quarterly financial information Financial ratios1 Pro forma 1Q14 Actual 2Q14 Actual 3Q14 Actual 4Q14 Actual 1Q15 Loss ratio 15.9% 23.2% 21.4% 15.3% 16.6% Expense ratio 25.3% 27.9% 26.3% 26.3% 27.3% Combined Ratio 41.3% 51.2% 47.8% 41.6% 43.9% Insurance Margin 67.9% 64.4% 60.4% 70.2% 67.0% Effective
Slide 20: Delinquency development
Delinquency development Quarterly delinquency roll and delinquency composition Delinquency Roll 1Q14 2Q14 3Q14 4Q14 1Q15 Opening balance 4,980 5,070 5,405 5,300 4,953 New delinquencies 2,689 2,913 2,734 2,357 2,679 Cures (2,137) (2,159) (2,489) (2,390) (1,974) Paid claims (462) (419) (350) (314) (28
Genworth Mortgage Insurance Australia — Q1 2015 Earnings Presentation on 6ix