Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Q2 2016 Earnings Presentation
13 slides from Sagen MI Canada's earnings presentation, Aug 3, 2016
Slide 1: Second Quarter 2016 Results
Second Quarter 2016 Results August 3rd, 2016 Q2 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: Q2 2016 financial results
Q2 2016 financial results $MM except ROE, EPS & Q2 Q1 Q2 Q/Q Y/Y Q2 key highlights 2016 2016 2015 MCT Premiums $249 $117 $205 +113% +21% • Premiums written increased Q/Q due to portfolio written insurance volumes and seasonality Loss ratio 21% 24% 17% -3 pts +4 pts • Loss ratio of 21%, driven by typ
Slide 4: 2016 market drivers
2016 market drivers Macroeconomic environment • Slow growth environment with GDP growth of 1.3% in 2016, Expectations for full year 20162 Alberta National and 2.2% in 20171 Unemployment rate 8% to 8.5% 7.1% to 7.6% • Average oil price expected to remain in the $40 to $50 range Home price appreciatio
Slide 5: Top line
Top line New insurance written ($ billions) Net premiums written ($ millions) Transactional Portfolio Transactional Portfolio $30.4 $705 $104 $96 $25.2 $25.7 Q4 $181 $32 Q4 $6.2 $9.6 $25.9 Q3 $236 $24 $78 Q3 $8.3 $270 $6.1 $9.2 $22 Q2 $6.8 $4.1 Q2 $183 $170 $5.8 $5.9 $4.5 $26 $18 Q1 $3.9 $3.4 Q1 $10
Slide 6: Portfolio quality improving
Portfolio quality improving Credit score Median home price (In ‘$000s) Average gross debt service ratio (%) % Score <660 (R) Avg score (L) 754 16% $301 $295 $291 $288 $280 $275 $270 $255 $240 $232 $225 25% 25% 24% 24% 24% 24% 24% 24% 23% 23% 22% 716 3% '07 '08 '09 '10 '11 '12 '13 '14 '15 Q1'16 Q2'16
Slide 7: Delinquency trends
Delinquency trends Outstanding delinquencies New delinquencies, net of cures, by region 2,034 568 1,961 1,829 162 38 Total 1,666 1,715 189 487 QoQ 132 222 440 33 92 ∆ 113 212 Prairies1 97 204 26 Atlantic 198 Total 82 191 352 -216 319 76 138 656 578 Prairies1 52 624 2 +14 Quebec 579 578 Atlantic 58 1
Slide 8: Solid financial performance
Solid financial performance $MM except EPS & BVPS Q2’16 Q1’16 Q2’15 Q2 highlights Transactional premiums written $170 $99 $183 • Transactional premiums written lower by Portfolio premiums written 78 18 22 7% Y/Y, primarily due to a decline in volume partially offset by a higher average Total premium
Slide 9: Solid underwriting profitability
Solid underwriting profitability Underwriting profitability ($ millions) Highlights Premiums earned $144 $148 $151 $154 $158 • Single up-front premium model provides visibility 33 into future premiums earned Losses on claims 25 31 35 37 • Six consecutive quarters of Q/Q increases… 30 Expenses 29 28
Slide 10: Investments contribute steady income
Investments contribute steady income Total Invested Assets ($6.1B portfolio1) Net Investment Income ($ millions) $169 Federals 16% Q4 $44 Duration: 3.7 years Book yield: 3.1%1 Provincials 34% Investment grade Invested assets corporates2 (C$ millions, unless noted) Preferred shares Q3 $42 Net $6.1B $
Slide 11: Capital management
Capital management Regulatory capital at 220% MCT holding target (by risk category, $ millions) Highlights 3,636 3,698 • New regulatory framework targeted Capital in 206 excess of 220% 217 for Jan. 1, 2017 implementation: 582 Operational Risk 570 • Base requirement incorporates Market Risk1 436 424
Slide 12: 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 Q2 2016 Results Genworth MI Canada Inc. 12
Slide 13: 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 Q2 2016 Results Genworth MI Canada Inc. 13