Sagen MI Canada Inc · TSX:MIC.PR.A

Sagen MI Canada — Genworth MI Canada — Scotia Capital Financial Summit 2013

17 slides from Sagen MI Canada's conference presentation, Sep 5, 2013

  1. Slide 1: Scotia Capital Financial Summit 2013

    Scotia Capital Financial Summit 2013 Brian Hurley, Chairman and CEO Genworth MI Canada Inc. (TSX:MIC) 1 September 5, 2013

  2. Slide 2: Forward-looking and non-IFRS statements

    Forward-looking and non-IFRS statements This presentation includes certain forward-looking statements. These forward-looking statements include, but are not limited to, statements with respect to the Company’s future operating and financial results, expectations regarding premiums written, capital e

  3. Slide 3: Agenda

    Agenda Business overview Market Environment Insurance Portfolio Characteristics Our Performance Our Outlook and Strategic Priorities Genworth MI Canada Inc. (TSX:MIC) 3 September 5, 2013

  4. Slide 4: Our business

    Our business 1 2 Mortgage Insurance Mortgage Application Application and Premium Homebuyer Mortgage Lender Mortgage Insurer Originates mortgages 4 Mortgage Loan 3 Insurance Contract  Mortgage insurance required for loans > 80% loan-to-value (LTV)  Borrower paid premium  Lender receives protection

  5. Slide 5: Mortgage originations outlook

    Mortgage originations outlook Housing Resales and  High loan-to-value borrowers Completions are ~30% of the market (units in thousands) Resales Completions  Mortgage rule changes 641 634 633 636 636 impacting housing demand 176 187 176 181 193  Low interest rates help with 465 447 457 455 443 aff

  6. Slide 6: Housing market trends

    Housing market trends Housing Affordability Supply vs. Demand 60 80.0% 55 Affordability Index 60.0% 50 Balanced Market 40.0% 45 Good 40 20.0% Standard 2 Storey House Sales to New Listings Ratio Source: RBC Economics Source: Canada Real Estate Association  Flat home prices and low  Stable employmen

  7. Slide 7: Served market trends

    Served market trends Average credit score 720 726 727 727 730 732  Improving quality  “A” quality borrowers only 08 09 10 11 12 1H'13 Average home price  Flat home price outlook for the 266 284 296 301 298 balance of 2013 for first-time 256 08 09 10 11 12 1H'13 homebuyer segment Average gross deb

  8. Slide 8: Borrower characteristics H1 2013

    Borrower characteristics H1 2013 71% Property type  Key served market – families buying 8% 12% 9% suburban detached home Detached Semi-det Condo Row  72% between the ages of 25-44 Apt.  Limited exposure to condos Purchase price 55% 34%  Strong marketability for properties in 3% 8% the $100K - $5

  9. Slide 9: Well-diversified insurance portfolio

    Well-diversified insurance portfolio Credit score dispersion Regional dispersion 100% 80% 17% 25% 60% 74% 74% 75% 40% 12% 35% 20% 18% 18% 17% 9% 9% 11% 8% 0% 2011 2012 H1 2013 <660 660 - 669 >=700 Alberta Other BC Ontario Quebec % based on high loan-to-value new insurance written H1 2013 Driving imp

  10. Slide 10: Performance drivers

    Performance drivers Frequency Severity Unemployment Rate (UE) Average Price ($000s) 10% 400 9% 350 8% 7% 300 6% 5% 250 4% 200 '07 '08 '09 '10 '11 '12 '13F '14F 07 08 09 10 11 12 13F 14F  Modest job growth over forecast period  Housing market cooling  UE rate moderating towards historical  Home p

  11. Slide 11: Broad based improvement in delinquencies

    Broad based improvement in delinquencies Number of delinquencies & Insurance Delinquency rate in-force June 30 March 31 June 30 June 30 2013 2013 2012 2013 Ontario 453 533 649 46% BC 318 337 395 15% Alberta 301 337 551 16% Quebec 451 507 587 14% Other 255 249 226 9% Total 1,778 1,963 2,408 100% Deli

  12. Slide 12: Regulatory environment

    Regulatory environment Regulatory focus Impact OSFI now responsible for all  Consistent application of rules and regulations mortgage insurance providers  More clarity, transparency and insight B-20 guidelines  Lender focus… expect specific MI guidelines Defined mortgage eligibility rules  Stron

  13. Slide 13: Solid first half 2013

    Solid first half 2013 1H 2013 1H 2012  Net premiums written $221 MM $256 MM  Underwriting profits $156 $141  Investment income $108 $90  Net operating income $173 $155  Operating EPS (diluted) $1.75 $1.56  Operating return on equity 12% 12%  Book value/share (diluted, with AOCI) $30.94 $27.88

  14. Slide 14: $5.3 B investment portfolio adds to stability

    $5.3 B investment portfolio adds to stability  Balanced high quality portfolio Cash • 50% federal & provincial bonds 5% Common Equity • 41% corporate bonds 5% • 95% of bonds ‘A’ or higher Federal  $193 million positive mark-to-market Total 37% $5.3 billion $ Billion Portfolio Assets (MV) $5.3 Corp

  15. Slide 15: Solid business outlook

    Solid business outlook  Balanced housing market dynamics  Continued focus on high-quality loans  Proactive loss mitigation strategy  Differentiated customer service  Active government relations efforts  Balanced investment portfolio Well-positioned to maintain track record of profitability Gen

  16. Slide 16: Our strategic priorities

    Our strategic priorities Drive positive and powerful customer experience Ensure high quality portfolio with rigorous underwriting Strengthen market positioning Strengthen government relations Ensure solid financial foundation Attract and retain top talent Genworth MI Canada Inc. (TSX:MIC) 16 Septemb

  17. Slide 17: Contact: Samantha Cheung

    Contact: Samantha Cheung VP Investor Relations 905.287.5482 samantha.cheung@genworth.com www.genworth.ca Genworth MI Canada Inc. (TSX:MIC) 17 September 5, 2013

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