Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Investor Presentation (May 2011)
12 slides from Sagen MI Canada's investor presentation, May 27, 2011
Slide 1: Investor Update
Genworth MI Canada Inc. Investor Update
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
Slide 3: Housing market dynamics
Housing market dynamics • Balanced housing market • Modest overall home price appreciation • Improved job growth underpins sustainable demand • Typical delinquency seasonality Genworth MI Canada Inc. 3 Investor Presentation – May 2011
Slide 4: First quarter performance
First quarter performance $ MM (except per share Q1 2011 Q4 2010 Q1 2010 amounts) Net Premiums Written $ 101 $ 134 $ 94 Premiums Earned 155 156 156 Losses on Claims (59) (50) (59) Underwriting Income 71 77 71 Investment Income (excl. gains / 43 44 45 losses) Net Operating Income $ 78 $ 84 $ 81 Opera
Slide 5: Top line performance
Top line performance Net Premiums Written ($MM) Q1 • Slower housing market … seasonal effects • Solid housing affordability driven by attractive mortgage rates • Better market penetration 101 94 7% higher net premiums written (YoY) 2010 2011 Genworth MI Canada Inc. 5 Investor Presentation – May 2011
Slide 6: Strong capital position with flexibility
Strong capital position with flexibility Capital Base (MM) 422 422 • Capital management priorities − Strong capital flexibility 2,589 2,621 − Investing for growth − Quarterly common dividends − ROE focused Q4 2010 Q1 2011 Shareholders' Equity Debt Outstanding 2010 Q1 2011 Leverage1 14% 14% ROE 14% 1
Slide 7: Underwriting performance
Underwriting performance Premiums Earned and Losses on Claims ($MM) Premiums Losses 156 156 155 59 59 50 Q1’ 10 Q1'10 Q4’10 Q4'10 Q1’11 Q1 '11 Loss Ratio 38% 32% 38% Expense Ratio 16% 18% 17% Combined ratio 55% 50% 55% Maintaining strong risk discipline and loss mitigation focus Genworth MI Canada I
Slide 8: Stable overall delinquency rate
Stable overall delinquency rate Mortgage insurance portfolio Insurance delinquency rate in-force 31 March 31 March 31 Dec 2010 30 Sept 2010 2011 2011 Ontario 0.18% 0.18% 0.17% 46% BC 0.31% 0.30% 0.27% 16% Alberta 0.59% 0.62% 0.58% 16% Quebec 0.26% 0.23% 0.21% 15% Other 0.19% 0.17% 0.19% 7% Canada 0.
Slide 9: Effective risk in-force
Effective risk in-force Insurance In-Force Estimated Risk In-Force Original Effective LTV LTV $245B $33B (at 100% frequency) 91% 2010 $23.6B 91% 2010 91% 2009 $16.1 B 84% 2009 92% 2008 $24.2 B 80% $95.3 B x 35% severity 2008 91% 2007 $31.4 B 79% 2007 89% 2006 66% 90% 46% Accumulated equity from 2005
Slide 10: Embedded value in unearned premiums
Embedded value in unearned premiums Earnings Curve by Origination Year 20% 15% 10% $1.8 billion unearned premiums 5% 0% 2011 2010 2009 2008 2007 2006 <=2005 Origination Year NPW - $ MM $101 $552 $360 $706 $984 $595 UPR - $ MM 86 543 296 354 314 120 135 60% combined ratio represents ~$500 MM NI or ~$
Slide 11: Investment portfolio adds income stability
Investment portfolio adds income stability • Primarily fixed income Preferred,2% Common, 3% Guar. Fund, 13% • 96% of fixed income rated ‘A’ or better Corporates,46 % Cash, 6% • Duration of 3.7 years1 • Book yield1 of 4.3% as at Total - $5.1B General Fund March 31, 2011 Federal,17% - $4.5B Every 10 b
Slide 12: Key takeaways
Key takeaways Balanced housing market Disciplined business execution with proven track record Strong financial foundation with capital efficient focus Consistent profitability Genworth MI Canada Inc. 12 Investor Presentation – May 2011
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