Helia Group Limited · ASX:HLI

Helia — Genworth Mortgage Insurance Australia — Q1 2016 Earnings Presentation

20 slides from Helia's earnings presentation, Apr 29, 2016

  1. Slide 1: 1Q 2016 Financial results presentation

    Genworth Mortgage Insurance Australia 1Q 2016 Financial results presentation 29 April 2016 © 2016 Genworth Mortgage Insurance Australia Limited. All rights reserved.

  2. Slide 2: Disclaimer

    Disclaimer This presentation contains general information in summary form which is current as at 31 March 2016, unless otherwise stated. It may present financial information on both a statutory basis (prepared in accordance with Australian accounting standards which comply with International Financi

  3. Slide 3: 1Q16 financial results summary

    1Q16 financial results summary Resilient earnings performance (A$ millions) 1Q15 1Q16 Change  Net earned premium increased. %  Underlying NPAT reflects good underwriting performance. Gross written premium 127.7 85.0 (33.4%)  Reported NPAT includes mark-to-market movement on investment portfolio.

  4. Slide 4: Residential mortgage lending market

    Residential mortgage lending market Originations and HLVR Penetration $ billions 37% 34% 34% 33% 33% 31% 28% 24% 372 337 37 302 41 53 262 256 42 240 242 53 219 46 37 26 31 57 41 43 47 50 49 2 199 40 162 124 102 99 98 105 74 65 71 68 63 65 79 81 83 2008 2009 2010 2011 2012 2013 2014 2015 Loans approv

  5. Slide 5: Macroeconomic conditions

    Macroeconomic conditions Delinquency rates by geography Unemployment rates by geography (seasonally adjusted) Change Change State 1Q15 1Q16 State Mar 15 Mar 16 (basis points) (basis points) New South Wales 0.29% 0.29% - New South Wales 6.0% 5.3% (70) bps Victoria 0.32% 0.35% 3 bps Victoria 6.2% 5.7%

  6. Slide 6: 1Q 2016 income statement

    1Q 2016 income statement (A$ millions) 1Q15 1Q16 Change Gross written premium 127.7 85.0 (33.4%) Movement in unearned premium 3.0 47.0 N/A Gross earned premium 130.7 132.0 1.0% Outwards reinsurance expense (19.9) (18.5) (7.0%) Net earned premium 110.8 113.5 2.4% Net claims incurred (18.4) (30.7) 66.

  7. Slide 7: New insurance written

    New insurance written NIW 1 by original LVR2 band NIW 1 by product type $ bn, % $ bn, % 87% 86% 85% 85% NIW by product type 82% 10.5 10.5 8.5 23% 8.5 7.2 7.2 20% 6.4 6.4 6.2 6.2 29% 44% 22% 17% 99.4% 49% 99.2% 50% 99.1% 57% 56% 99.0% 99.3% 33% 31% 33% 14% 22% 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15

  8. Slide 8: Gross written premium

    Gross written premium GWP and average price of flow business (GWP/NIW 1) GWP walk $ millions, % $ millions 127.7 (4.2) (17.3) 2.0% 1.77% 1.78% (21.2) 1.53% 1.57% 157.6 85.0 1.5% 1.42% 127.7 124.7 1.0% 97.5 85.0 0.5% 0.0% 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 Product price Volume LVR mix 1Q16 2 GWP (includin

  9. Slide 9: Net incurred claims

    Net incurred claims (A$ millions unless otherwise stated) 1Q15 2Q15 3Q15 4Q15 1Q16 Number of paid claims (#) 280 288 325 291 280 Average paid claim1 ($’000) 62.5 66.9 65.9 71.0 65.8 Claims paid1 17.5 19.3 21.4 20.6 18.4 Movement in borrower recovery receivable on paid claims (9.6) 0.7 0.5 (3.4) 0.1

  10. Slide 10: 1Q 2016 regulatory capital position

    1Q 2016 regulatory capital position Pro Forma Level 21 (A$ in millions) 31 Dec 15 31 Mar 16 31 Mar 16 Capital Base Common Equity Tier 1 Capital 2,351.2 2,298.5 2,096.5 Tier 2 Capital 249.6 249.6 249.6 Regulatory Capital Base 2,600.8 2,548.1 2,346.1 Capital Requirement Probable Maximum Loss (‘PML’) 2

  11. Slide 11: 2016 outlook

    2016 outlook Dynamic mortgage market continuing to impact new business volumes  Outlook for the Australian residential mortgage market is supported by sound fundamentals, especially stable unemployment rates and accommodative monetary policy setting.  House price appreciation in 2016 expected to m

  12. Slide 12: Supplementary Slides

    Supplementary Slides

  13. Slide 13: Residential mortgage lending market

    Residential mortgage lending market Investment vs. Owner Occupied (APRA statistics) Investment vs. Owner Occupied1 (GMA) $bn, % $bn, % 30% 39% 27% 37% 35% 24% 25% 34% 33% 23% 23% 31% 32% 21% 29% 20% 20% 138 132 105 12.5 8.7 76 84 8.6 81 78 6.7 8.0 68 8.4 6.2 5.2 234 33.0 187 197 205 29.2 26.5 26.4 2

  14. Slide 14: New Insurance Written & Insurance in force

    New Insurance Written & Insurance in force Insurance in force (IIF)1 by original LVR2 band, as at 31 IIF1 by product type, as at 31 March 2016 March 2016 Total IIF $xx billion as at 31 March 2016 Total IIF $322bn Home Buyer 95.01%+ Business Plus, 3% Other, 1% 60.01-70% Select, 1% 2% 6% <60% Low Doc,

  15. Slide 15: Insurance ratio analysis

    Insurance ratio analysis Expenses Combined ratio $ millions, % $ millions, % 59.2% 43.9% 53.4% 50.5% 27.3% 26.0% 25.7% 25.7% 43.5% 23.4% 73.4 61.4 30.3 31.9 30.9 57.3 29.9 52.2 26.6 48.7 31.9 29.9 26.6 17.5 16.9 17.1 17.0 14.5 30.3 30.9 41.5 14.8 13.9 31.5 30.7 12.8 13.0 12.1 18.4 21.3 1Q15 2Q15 3Q1

  16. Slide 16: Quarterly financial information

    Quarterly financial information Statement of comprehensive income (A$ in millions) 1Q15 2Q15 3Q15 4Q15 1Q16 Gross written premium 127.7 157.7 124.7 97.5 85.0 Movement in unearned premium 3.0 (22.7) 19.2 42.5 47.0 Gross earned premium 130.7 135.0 143.9 140.0 132.0 Outwards reinsurance expense (19.9)

  17. Slide 17: Balance sheet and unearned premium reserve

    Balance sheet and unearned premium reserve Strong balance sheet with $3.9bn in Cash and Investments and $1.27bn in UPR (A$ in millions) 31 Dec 15 31 Mar 16 Unearned premium by book year as at 31 March 2016 Assets Total UPR $1.27bn Cash and cash equivalents 78.1 71.4 Investments 1 3,882.4 3,802.4 1%

  18. Slide 18: Delinquency development

    Delinquency development Favourable performance post 2009 1.40% 2005 2006 2007 1.20% 2008 2009 2010 2011 1.00% 2012 2013 2014 Delinquency Rate (%) 0.80% 2015 2016 0.60% 0.47% 0.38% 0.42% 0.40% 0.40% 0.40% 0.30% 0.23% 0.29% 0.19% 0.20% 0.13% 0% 0.04% 0.00% 103 109 115 121 127 133 139 145 151 43 49 55

  19. Slide 19: Delinquency development

    Delinquency development Delinquency Roll 1Q15 2Q15 3Q15 4Q15 1Q16 Opening balance 4,953 5,378 5,900 5,804 5,552 New delinquencies 2,679 3,103 2,782 2,401 2,697 Cures (1,974) (2,293) (2,553) (2,362) (2,080) Paid claims (280) (288) (325) (291) (280) Closing delinquencies 5,378 5,900 5,804 5,552 5,889

  20. Slide 20: Income statement reconciliation – 1Q 2016

    Income statement reconciliation – 1Q 2016 Reconciling to the USGAAP figures reported by Genworth Financial, Inc. Add Back: Non USGAAP AU Adjustments USGAAP AU USGAAP AU Total GMA Controlling Segment Segment Results Segment Interest Results + (a) (b) (c) (d) (e) Adjust. Group in USD Results + NCI (NC

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