Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Q3 2018 Earnings Presentation
14 slides from Sagen MI Canada's earnings presentation, Oct 30, 2018
Slide 1: Third Quarter 2018 Results
Third Quarter 2018 Results October 30th, 2018 Q3 2018 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: 3Q18 financial results
3Q18 financial results $MM except loss ratio, Q3 Q2 Q3 Op. ROE, Op. EPS & 2018 2018 2017 Q/Q Y/Y Q3 key highlights MCT ratio Premiums written $196 $172 $202 +14% -3% • Total premiums written decreased modestly Y/Y largely Premiums earned $169 $171 $170 -1% Flat due to a smaller transactional market
Slide 4: Our environment today
Our environment today Risk Assessment Key observations ▪ Sound economic environment; GDP forecast growth of 2.1%1 in ‘18 & 2.1%1 in ‘19 ▪ Unemployment rate near record low; rising wages in most provinces Economic ▪ BoC overnight rate increased to 1.75% in October; 3-4 more expected in 2019 ▪ USMCA a
Slide 5: Regional risk assessment
Regional risk assessment Quarterly Snapshot TOR VAN MTL CGY CANADA Q3’18 Q/Q Teranet HPI 1 2.2% 0.9% 2.8% 0.3% 1.9% Q3‘18 UE Rate 1 6.1% 4.5% 6.1% 8.2% 5.9% High Denotes change from Q2’18 Size of circle reflects regional total risk-in-force Key Indicators GVA GTA riskRisk ▪ Overvaluation Pacific ▪ A
Slide 6: Top line
Top line New insurance written ($ billions) Premiums written ($ millions) Transactional Portfolio Transactional Portfolio $13.4 $602 $18.2 $0.9 $0.8 Q4 Q4 $4.5 $1.1 $157 $468 $13.4 $60 Q3 $5.6 $5.5 Q3 $195 $192 $7 $6 $8 $10.5 Q2 $5.0 $4.8 $3.1 Q2 $161 $166 $0.8 $38 $15 $1.1 $5 $4 Q1 $3.0 $3.2 $1.2 Q
Slide 7: Strong portfolio quality
Strong portfolio quality Credit score1 Average home price2 Stacked risk factors3 (In ‘$000s) % Score <660 Avg score Q2 reflects typical increase in QC business mix $342 $336 $332 $332 $328 $324 $323 $322 $317 $315 $304 $301 $296 $284 748 9.8% 1.0% 727 0.4% 2.4% '10 '11 '12 '13 '14 '15 '16 Q1'17 Q2'1
Slide 8: Strong financial performance
Strong financial performance $MM except EPS & BVPS Q3’18 Q2’18 Q3’17 Year-to-date performance Transactional premiums written $192 $166 $195 Q3’18 Q3’17 % ($MM) YTD YTD change Portfolio premiums written 4 5 6 Net income $371 $396 -6% Net operating income $358 $345 +4% Total premiums written $196 $172
Slide 9: Delinquency trends
Delinquency trends Outstanding delinquencies New delinquencies, net of cures, by region 365 Q/Q 346 360 ∆ Total 1,759 1,742 Total 337 1,718 1,723 1,695 58 328 Prairies1 25 45 53 Prairies1 205 224 246 241 42 -3 247 Atlantic 70 67 Atlantic 214 78 47 -20 226 230 229 206 80 Quebec 427 374 368 73 370 349
Slide 10: Solid underwriting profitability
Solid underwriting profitability Underwriting profitability ($ millions) Highlights Premiums earned $170 $171 $171 $171 $169 Losses on claims 23 15 22 25 23 34 • Flat-to-modest Y/Y increase expected for the full Expenses 34 32 33 32 year in premiums earned; after growing by 6% in 2017 Net underwriti
Slide 11: Investments contribute steady income
Investments contribute steady income Total investments and net derivative assets ($6.6B1) Interest rate hedge program Investments: $6.4B Interest rate swaps Forward curve5 Notional (C$B) $3.5 13% Floating rate5 2.00% - 2.20% Federals Duration: 3.7 years Fixed rate5 1.17% Book yield: 3.2%2 Spread ~0.
Slide 12: Capital management
Capital management Regulatory capital as at Sept. 30th, 2018 (by category, $ millions unless otherwise noted)* Highlights Current MCT Sept. 30, 2018 Jun. 30, 2018 ▪ Strong capital position with MCT ratio of Capital available 4,356 4,316 ~171% and holding company cash and liquid investments of $101 m
Slide 13: Strategic priorities for 2018
Strategic priorities for 2018 1 2 3 4 Invest in Continue to Leverage our Maintain an process exercise prudent data and efficient capital innovation and risk mortgage structure to technology to management expertise to ensure capital drive improved and proactive influence our strength while customer l
Slide 14: 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 Q3 2018 Results Genworth MI Canada Inc. 14