Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — CIBC 8th Annual Eastern Institutional Investor Conference 2009
23 slides from Sagen MI Canada's conference presentation, Sep 22, 2009
Slide 1: CIBC 8th Annual Investor Conference
CIBC 8th Annual Investor Conference September 22, 2009 Brian Hurley Chairman and CEO
Slide 2: Overview
Overview September 22, 2009 Genworth MI Canada Inc.
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements that relate to the company’s current expectations and views of future events. These forward-looking statements may be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”, “aim”, “estimate”, “int
Slide 4: Non-GAAP Measures
Non-GAAP Measures To supplement its financial statements, the Company uses select non-GAAP financial measures. Non- GAAP measures used by the Company to analyze performance include underwriting ratios such as loss ratio, expense ratio and combined ratio as well as other performance measures such as
Slide 5: Genworth MI Canada
Genworth MI Canada • Leading private mortgage insurer established 1995 • Well positioned in a highly attractive mortgage market • Strong relationships with the largest mortgage originators • Over 12 consecutive years of profitable growth • Debt free balance sheet and high quality investment portfoli
Slide 6: Public Offering Highly Successful
Public Offering Highly Successful • Completed Initial Public Offering on July 7, 2009 • Public float of 44.7 MM shares • $19 at launch for $850 MM • Diversified ownership base • Current Market Cap $2.8 billion (as of September 17, 2009) Initial public offering significantly boosted financial flexibi
Slide 7: Business Highlights
Business Highlights • $217 billion total insurance in force that high quality and well-diversified • Total assets of $5.1 billion • 2008 Revenues of $518 mm • 2008 Net Operating Income $322 mm • 1H’09 Revenues of $301 mm1 • 1H’09 Net Operating Income of $146 mm1 • Shareholders’ Equity $2.3 billion 1
Slide 8: Genworth MI Operates in a Highly Attractive Mortgage Market
Genworth MI Operates in a Highly Attractive Mortgage Market 4 • High levels of homeownership 90 Day Delq Rates US vs CAN 3.5 Source: Canadian Bankers Association and Mortgage Bankers Association • Stable Canadian housing market 3 Delinquency Rate % 2.5 • Mandatory mortgage insurance 2 US peak delinq
Slide 9: Competitive Advantages
Competitive Advantages September 22, 2009
Slide 10: Our Competitive Strengths
Our Competitive Strengths • Established relationships with over 180 mortgage Strong Lender Relationships lenders and originators with over 10 years of history with each of top 10 lenders Best in Class Service • Fully integrated into lenders’ value chain driven by And Technology differentiated servic
Slide 11: Fully Integrated in Lender Value Chain
Fully Integrated in Lender Value Chain Strong and Customized Lender Service Best In Class Relationships Excellence Technology Big 5 Banks to ~90% customer Proprietary software regional lenders satisfaction1 • Tailored strategies geared to strengthen lender relationships • Dedicated customer service
Slide 12: Highly Predictive, Automated Underwriting Platform
Highly Predictive, Automated Underwriting Platform Electronic Mortgage Application Genworth MI Canada Proprietary Underwriting System • Point of Sale technology 9 Credit Evaluation 9 Property Valuation 9 Risk Rules Assessment 9 Proprietary Mortgage Scoring System • Rigorously applied criteria Referr
Slide 13: Comprehensive Risk Management
Comprehensive Risk Management Enterprise Risk Management Portfolio Analytics Quality Assurance Underwriting Guidelines Loss Mitigation Investment Policy & Loan-By-Loan Underwriting Regulatory Compliance Risk management key to minimizing losses and driving earnings; risk management program is adjuste
Slide 14: Market Environment Impacts Performance
Market Environment Impacts Performance September, 2009
Slide 15: Affordability and Confidence Improving Housing Market
Affordability and Confidence Improving Housing Market 1 20 2 .4 1 10 2 .3 CCI & Existing Sales & Completions Indexes 2 .2 Inverse of Housing Affordability Index 1 00 2 .1 90 2 .0 80 1 .9 70 1 .8 60 1 .7 50 1 .6 40 1 .5 Year 2006 2007 2 008 2009F 2010 F # o f S ales 483,770 518,369 434,352 43 2,600 4
Slide 16: Unemployment is Key Driver of Delinquencies
Unemployment is Key Driver of Delinquencies CBA Delinquency Rate vs. Unemployment Rate 0.70% 12.0% 11.0% 0.60% 10.0% 0.50% CBA Delinquency Rate (%) Unemployment Rate (%) 9.0% 0.40% 8.0% 0.30% 7.0% 0.20% 6.0% 0.10% 5.0% 0.00% 4.0% Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Slide 17: Financial Strength
Financial Strength September 22, 2009
Slide 18: Solid Financial Track Record
Solid Financial Track Record Net Premiums Earned and Inv. Income Q2 2009 Highlights 600 • Net premiums written: $82 MM Investment Income 500 Net U/W Income • Net premiums earned: $153 MM ($ • Combined ratio: 62% 400 millions) 200 148 • Net Operating Income: $69 MM 300 126 • Fully diluted EPS: $0.64
Slide 19: Investment Portfolio Contributes to Income
Investment Portfolio Contributes to Income Investment Portfolio (June 30, 2009) Well diversified Portfolio: Asset General Cash Backed/Other 10.3% Cash or Investments 5.6% Rated A or Higher 98% Guarantee Fund 13.4% Cash or Investments Rated AAA 46% Corporate Fixed Duration 3.3 Years Inc 43.2% Book Yi
Slide 20: Growth and Focus Moving Forward
Growth and Focus Moving Forward September 22, 2009
Slide 21: Our Long term Growth Strategy
Our Long term Growth Strategy… Overall goal is to achieve growth in operating net income and provide an attractive return to shareholders • Invest in customer service and our underwriting franchise • Continue to execute loss mitigation strategy • Focused government relations strategy • Maintain stro
Slide 22: Our Focus going Forward
Our Focus going Forward Top line growth Continued focus on RESULTS: risk management Continued Deepen our lender relationships Profitability Accelerated Growth Conservative approach to capital Deepen relationship with our Government Deliver attractive ROE to Shareholders 21
Slide 23: CIBC 8th Annual Investor Conference
CIBC 8th Annual Investor Conference September 22, 2009 For further information: Samantha Cheung, VP Investor Relations 905-287-5482 samantha.cheung@genworth.com www.genworth.ca
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