Sagen MI Canada Inc · TSX:MIC.PR.A

Sagen MI Canada — Genworth MI Canada — Investor Presentation (May 2010)

23 slides from Sagen MI Canada's investor presentation, May 13, 2010

  1. Slide 1: Genworth MI Canada Inc.

    Genworth MI Canada Inc. Peter Vukanovich President and Chief Operating Officer May 13, 2010

  2. Slide 2: Agenda

    Agenda ƒ Company Overview ƒ Risk Management ƒ Financial Overview ƒ Outlook 1

  3. Slide 3: Forward-Looking Statements

    Forward-Looking 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 expenditure pl

  4. 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

  5. Slide 5: The Homeownership Company

    The Homeownership Company ƒ Help Canadians Purchase a Home with <20% Down ƒ Work With Lenders, Mortgage Brokers, Builders ƒ Help Borrowers During Difficult Financial Times ƒ Helped Over 1 million Canadians Since 1995 ƒ 265 Employees Across Canada Leading Private Mortgage Insurer in Canada 4

  6. Slide 6: Understanding Mortgage Insurance

    Understanding Mortgage Insurance ƒ Required For >= 80% Loan To Value ƒ Single Upfront Premium ƒ Protects Lenders Against Borrower Default ƒ Lenders Benefit From Capital Relief, Risk Transfer, and Funding Flexibility ƒ Government Supports Private MI Competition Facilitates Safety and Soundness of Fin

  7. Slide 7: Housing Market Is Strong

    Housing Market Is Strong ƒ Major Part Of the Economy ƒ 2/3 Of Canadians Own A Home ƒ Approximately 40% Of Mortgages Are Insured MLS Home Sales in Canada Units 550,000 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 2005 2006 2007 2008 2009 2010 YTD Source: Canadian Real Estat

  8. Slide 8: Borrower Profile

    Borrower Profile INSERT PICTURE Criteria Genworth Market Stats Property Price $273,000 $342,000 Household Income $85,000 $74,000 Note: Genworth Averages based on 2009 and YTD 2010 data, Market Stats from Manifold Data Mining Inc. Target Market - First Time Homebuyers With Strong Credit Profile 7

  9. Slide 9: Key Trends

    Key Trends ƒ Stabilizing Unemployment ƒ Low Mortgage Interest Rates Strong Housing ƒ Normalizing Home Prices Market ƒ Rising Consumer Confidence ƒ New Mortgage Rules Positive Housing Fundamentals Are Positive for Mortgage Insurance 8

  10. Slide 10: Competitive Strengths – Customer Centricity

    Competitive Strengths – Customer Centricity Solid Lender Best In Class Service Relationships & Technology Risk Collaborative Management Culture Financial Strength 9

  11. 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

  12. Slide 12: Risk Management – Our Foundation

    Risk Management – Our Foundation Enterprise Risk Management Portfolio Analytics Quality Assurance Underwriting Guidelines Loss Mitigation Investment Policy & Loan-by-Loan Underwriting Regulatory Compliance 11

  13. Slide 13: Fundamentals of Underwriting

    Fundamentals of Underwriting Credit Profile Debt Service ƒ Credit Score ƒ Income Level ƒ Credit Age ƒ Interest Rate ƒ Payment History ƒ Amortization Sound Risk Property Judgment Product ƒ Property Location ƒ Loan to Value ƒ Property Value ƒ Self Employed ƒ Sales History ƒ Salaried 12

  14. Slide 14: Well Diversified Portfolio

    Well Diversified Portfolio High LTV Insurance In-Force Segmentation Book Year Original Loan to Value 2010 (3%) >95% (5%) <=80% (6%) 2009 (9%) 2008 (14%) >90-95% Prior to 2007 >80-90% (49%) (40%) (56%) 2007 (18%) ~56% Of Business Written Prior To 2007 > 89% Between 80% - 95% LTV Total High LTV Insura

  15. Slide 15: Mortgage Portfolio Performance

    Mortgage Portfolio Performance $229B Insurance in Force 03/31/10 Delinquency Rate 30-Sept-09 31-Dec-09 31-Mar-10 Ontario 47% 0.25% 0.23% 0.23% BC 16% 0.23% 0.25% 0.25% Alberta 15% 0.50% 0.54% 0.55% Quebec 14% 0.29% 0.29% 0.30% Other 8% 0.19% 0.19% 0.17% Total Delinquency 0.28% 0.28% 0.28% Delinquenc

  16. Slide 16: Combined Ratio

    Combined Ratio Loss Ratios Are Improving… 15% Expense 17% Ratio 15% 28% 14% 22% 20% Loss 42% 38% Ratio 31% 19% 12% 12% 14% '04 '05 '06 '07 '08 '09 * Q1'10 1 Point Loss Ratio Improvement ~ $4 MM After Tax Impact 15

  17. Slide 17: Strong Financials

    Strong Financials Solid Operating Results Q1 10 2009 Net Premiums Earned $156 MM $610 MM Net Operating Income $81 MM $307 MM Operating EPS (Diluted) $0.69 $2.67 ROE 13% 13% Strong Balance Sheet $5.1 Billion In Assets $2.7 Billion In Shareholders’ Equity $1.9 Billion in Unearned Premiums Represents F

  18. Slide 18: Good Visibility into Future Revenues

    Good Visibility into Future Revenues Unearned premium reserve of $1.9 billion Recognized as earned premium principally over 5 years – Actuarially-developed earnings curve – Matches expected loss development pattern Matched Premiums and Losses Premiums Losses ~90% of Unearned Premium Expected To Be E

  19. Slide 19: Operating Income Trend

    Operating Income Trend Operating $85 $81 Tax Rate Income $77 $75 $8 $70 Reduction $29 $31 Investment $29 $32 $30 Income Underwriting $45 $46 $48 $50 Income $40 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Operating (1) (2) $77 $70 $75 $77 $81 Income Operating (2) $0.69 $0.63 $0.63 $0.66 $0.69 EPS ROE 14% 12% 12% 1

  20. Slide 20: Investment Portfolio Contributes To Income

    Investment Portfolio Contributes To Income Asset Backed & Other 6% • $4.85 Billion Portfolio Corporates 45% • Portfolio Duration Of 3.6 Years Provincials 14% • Book Yield of 4.4% (March 31, 2010) Federal Government 21% Cash 2% • $157 MM Cash Reinvestment Guarantee Fund 12% Mar. 31, 2010 High Quality

  21. Slide 21: Capital Update

    Capital Update ƒ Solid Capital Foundation 9 Capacity For Growth 9 Capital Available For Stress Scenarios ƒ Drive Capital Efficiency 9 Add ~10% Leverage 9 Return Of Capital Greater Capital Efficiency And Higher Return On Equity 20

  22. Slide 22: Leading Private Canadian MI Platform

    Leading Private Canadian MI Platform Highly Attractive Mortgage Market Long Standing Relationships with the Largest Lenders Diversified by Lender, Geography and Year Proactive Risk Management Platform is a Strength Strong Balance Sheet Provides Flexibility Well-Positioned To Deliver Strong Returns 2

  23. Slide 23: Genworth MI Canada Inc. Questions?

    Genworth MI Canada Inc. Questions? For further information: Samantha Cheung, VP Investor Relations 905-287-5482 samantha.cheung@genworth.com www.genworth.ca 22

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