Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Q4 2016 Earnings Presentation
16 slides from Sagen MI Canada's earnings presentation, Feb 7, 2017
Slide 1: Fourth Quarter 2016 Results
Fourth Quarter 2016 Results February 7th, 2017 Q4 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: 2016 financial results
2016 financial results $MM except ROE, EPS & Q4 Q/Q Y/Y FY Y/Y Key highlights 2016 2016 MCT Fourth quarter highlights: Premiums • Loss ratio of 18%, down 5% Y/Y $171 -23% -20% $760 -6% written • NOI of $105 MM, up 11% Y/Y, EPS of $1.14, up 12% Y/Y Loss ratio 18% -7% -5% 22% +1 pt Net Operating Full
Slide 4: Our environment today
Our environment today Key takeaways Risk Assessment GDP growth projection supportive in 2017 (Canada 2.1%; US 2.2%)1 Economic Oil prices stabilizing in the $50 to $60 per barrel range in 2017 Housing risk in Toronto and Vancouver remains elevated Government changes contributing to soft landi
Slide 5: Top line
Top line New insurance written ($ billions) Premiums written ($ millions) Transactional Portfolio Transactional Portfolio $41.9 $705 $140 $4.9 $619 $22 $6.5 Q4 $181 $104 $25.7 $149 $22 $25.2 $21.2 $32 Q4 $6.2 $9.6 Q3 $236 $201 $5.1 $25.9 $24 $78 Q3 $8.3 $6.9 $6.1 Q2 $183 $170 $22 Q2 $6.8 $5.8 $4.1 Q
Slide 6: High portfolio quality
High portfolio quality Credit score1 Median home price2 (In ‘$000s) Stacked risk factors3 % Score <660 (R) Avg score (L) 2.0% $298 $295 $291 16% 1.6% $280 $275 $270 751 $255 $240 $232 $225 1.2% 0.8% 716 3% 0.4% 0.0% '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 2010
Slide 7: Delinquency trends
Delinquency trends Delinquencies outstanding New delinquencies, net of cures, by region 2,070 QoQ 2,034 2,027 568 1,961 ∆ Total 1,829 Total 487 38 493 162 201 203 436 -57 189 Prairies1 33 92 33 Prairies1 132 222 211 235 204 212 Atlantic 352 66 33 - Atlantic 82 504 521 138 93 77 +11 656 578 52 Quebec
Slide 8: Solid financial performance
Solid financial performance $MM except EPS & BVPS Q4’16 Q3’16 Q4’15 Q4 highlights Transactional premiums written $149 $201 $181 • Transactional premiums written lower by Portfolio premiums written 22 22 32 17% Y/Y, due to lower NIW • Premiums earned increased Y/Y by $13 Total premiums written $171 $
Slide 9: Announced price increases
Announced price increases Transactional price by LTV Previous pricing (prior to March 17th, 2017) (price in basis points)1 New pricing (effective March 17th, 2017) 450 Average 400 Premium Rate2 +11% 350 ~+14% 300 +29% 250 330 +56% to 200 400 335 +92% 360 bps 310 293 150 280 bps +127% 240 240 100 180
Slide 10: Solid underwriting profitability
Solid underwriting profitability Underwriting profitability ($ millions) Highlights Premiums earned $151 $154 $158 $162 $164 • Higher level of premiums written in last three 29 years driving trend of increased premiums 32 41 Losses on claims 35 37 earned…nine consecutive quarters of Q/Q 33 Expenses
Slide 11: Investments contribute steady income
Investments contribute steady income Total Invested Assets ($6.2B portfolio1) Net Investment Income ($ millions)6 $176 16% $169 Federals Duration: 3.8 years Book yield: 3.2%2 $46 Provincials Q4 $44 Investment grade 32% Invested assets corporates3 (C$ millions, unless noted) Preferred shares Net $6.2
Slide 12: Capital management
Capital management Regulatory capital as at December 31st, 2016 (by category, $ millions unless otherwise noted) Highlights Capital in 3,827 excess of 150% Capital in excess of 220% 397 Strong capital position as we transition Operational Risk to new capital framework for 2017 572 Market Risk1 358 •
Slide 13: 2017 outlook
2017 outlook Smaller MI market size could lead to moderate decline in premiums written despite rate increases Premiums earned expected to modestly increase in 2017 due to large recent books of business Estimated 25% to 35% loss ratio range for 2017 Investment income expected to be modestly higher in
Slide 14: Strategic priorities
Strategic priorities 1 2 3 4 5 Invest in Continue to Leverage our Maintain an Explore a process exercise prudent strong efficient capital private innovation to risk government structure to mortgage drive prudent management relations ensure capital insurance market share and proactive strategy to str
Slide 15: 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 Q4 2016 Results Genworth MI Canada Inc. 15
Slide 16: 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 Q4 2016 Results Genworth MI Canada Inc. 16