Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Q2 2010 Earnings Presentation
21 slides from Sagen MI Canada's earnings presentation, Jul 30, 2010
Slide 1: Second Quarter 2010 Results
Second Quarter 2010 Results July 30, 2010
Slide 2: Agenda
Agenda • Business Strategy And Outlook • Financial Review • Operational Highlights • Question And Answer Session 1
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
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: Business Update
Business Update Brian Hurley, Chairman and CEO
Slide 6: Second Quarter 2010 Results
Second Quarter 2010 Results Fourth Sequential Quarterly Increase In Net Income $5.5 Billion Assets and $2.8 Billion Shareholders’ Equity Solid Operating Results Net Operating Income $86 MM Operating EPS (diluted) $0.73 ROE (operating) 13% Key Business Objectives Return to Mid-teen ROE
Slide 7: Solid Housing Fundamentals
Solid Housing Fundamentals Improving Employment Levels Strong Consumer Confidence Low Mortgage Interest Rates Moderating Home Prices Strong First Time Home Buyer Demand 6
Slide 8: Business Highlights
Business Highlights Solid Top Line Focused Risk Management Capital Efficiency Strong Financials Positioned for Growth 7
Slide 9: Driving Capital Efficiency
Driving Capital Efficiency Executing On Capital Management Plan 9 Added ~ 10% Leverage With $275 MM Debenture Issue 9 Announced Substantial Issuer Bid Up To $325 MM Internal Minimum Capital Target Ratio To 145% Sufficient Capital For Growth And Stress Scenarios 8
Slide 10: Financial Highlights
Financial Highlights Philip Mayers, CFO
Slide 11: Q2 2010 Financial Results
Q2 2010 Financial Results Q2’ 10 Q1’ 10 Net Premiums Written $157 $94 Premiums Earned 154 156 Losses On Claims 49 59 Underwriting Income 81 71 Investment Income1 42 45 Net Operating Income $86 $81 1 Excludes investment gains and losses 10
Slide 12: Improving Combined Ratio
Improving Combined Ratio 62% 57% 55% 55% 54% 15% 46% 15% 47% 13% 16% 17% Expense 15% 15% Ratio 33% 14% 46% 42% Loss 41% 39% 38% 32% Ratio 31% 19% 1 '07 '08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 1 Including impact of changes to the premiums recognition curve, loss ratio and expense ratio would have bee
Slide 13: Proven Track Record of Profitability
Proven Track Record of Profitability Net Operating Income $ Millions $86 $771 $81 $75 $771 $70 $30 $29 $31 Investment $29 $32 $30 $50 $56 $45 $46 $48 Underwriting $40 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 ROE 14%1 12% 12% 12%1 13% 13% 1Excluding earnings curve adjustment in Q1 2009 and excludes favora
Slide 14: High Quality Investment Portfolio
High Quality Investment Portfolio $5.2 Billion Portfolio Investment Management Asset Backed & Other 5% Conservative And Balanced Approach Corporates 42% Fixed Income And Preferred Shares Provincials 13% 99% In Securities Rated A Or Better Federal Government 18% Balancing Yield And Quality Cash
Slide 15: Strongly Capitalized
Strongly Capitalized 160% 154% 149% 150% 150% 147% 140% 140% OSFI Minimum 130% Supervisory MCT Requirement 120% 110% 100% 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 Book Value $21.151 $21.95 $22.401 $22.85 $23.56 Per Share (Diluted) 1 Includes Accumulated Other Comprehensive Income 14
Slide 16: Operational Highlights
Operational Highlights Peter Vukanovich, President and COO
Slide 17: Operational Highlights
Operational Highlights Enhanced Customer Experience Driving Volume Continued Diversification Of Lender Base Improved Visibility Through Spring Campaign Expanded Loss Mitigation Strategy 97% Customer Satisfaction Rating 16
Slide 18: Overall Quality of Service
Overall Quality of Service % Rating Excellent or Very Good 100% 97% 96% 95% 92% 90% 90% 89% 88% 85% 80% Q2 08 Q3 08 Q1 09 Q3 09 Q4 09 Q2 10 Q2 – 2010 Lender Satisfaction Report based on Users of Genworth services Source: Altitude Marketing Research Inc. (June 2010)
Slide 19: Mortgage Portfolio Performance
Mortgage Portfolio Performance Insurance in Force 06/30/10 Delinquency Rate 30-Jun-10 31-Mar-10 31-Dec-09 Ontario 48% 0.19% 0.23% 0.23% BC 16% 0.26% 0.25% 0.25% Alberta 15% 0.57% 0.55% 0.54% Quebec 14% 0.24% 0.30% 0.29% Other 7% 0.17% 0.17% 0.19% Canada 0.26% 0.28% 0.28% Delinquencies Trending Lower
Slide 20: Outlook
Outlook Normalizing Housing Market Well Positioned For Growing Market Position Proactive Risk Management Solid Balance Sheet Supports Growth 19
Slide 21: Question and Answer Session
Question and Answer Session July 30, 2010 For further information: Samantha Cheung, VP Investor Relations 905-287-5482 samantha.cheung@genworth.com www.genworth.ca