Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Q1 2018 Earnings Presentation
14 slides from Sagen MI Canada's earnings presentation, May 1, 2018
Slide 1: First Quarter 2018 Results
First Quarter 2018 Results May 1st, 2018 Q1 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: 1Q18 financial results
1Q18 financial results $MM except ROE, Q1 Q4 Q1 EPS & MCT 2018 2017 2017 Q/Q Y/Y Q1 key highlights Premiums written $115 $164 $127 -30% -9% • Total premiums written decreased Y/Y largely due to lower portfolio insurance premiums; however transactional Premiums earned $171 $171 $167 Flat +2% premiums
Slide 4: Our environment today
Our environment today Key observations Risk Assessment Sound economic environment; GDP forecast growth of 2.0%1 in 2018 and 2.1%1 in 2019 Economic Unemployment rate at record low; rising wages in most provinces Modest increase in interest rates expected in 2H’18 Monitoring NAFTA renegotiatio
Slide 5: Housing risk: regional risk assessment
Regional risk assessment Quarterly Snapshot TOR VAN MTL CGY CANADA Q1’18 Q/Q Teranet HPI1 -0.6% 2.4% 0.3% -1.2% 0.2% March ‘18 UE Rate1 5.8% 4.0% 6.1% 8.2% 5.8% GDP 2018 Forecast2 2.4% 2.7% 2.1% 2.5% 2.0%3 High Denotes change from Q4’17 Size of circle reflects regional GTA total risk-in-force Key In
Slide 6: Top line
Top line New insurance written ($ billions) Premiums written ($ millions) Transactional Portfolio Transactional Portfolio $13.4 $603 $18.2 $0.9 $0.8 Q4 Q4 $4.5 $1.1 $157 $60 Q3 $5.6 Q3 $195 $7 $6 $8 $10.5 Q2 $5.0 Q2 $161 $38 $6 Q1 $3.0 $3.2 $1.1 Q1 $89 $109 2017 2018 2017 2018 2017 2018 2017 2018 Av
Slide 7: Strong portfolio quality
Strong portfolio quality Credit score1 Average home price2 Stacked risk factors3 (In ‘$000s) % Score <660 Avg score $342 $332 $332 $330 $328 $327 $326 $322 $317 $315 $315 $304 $301 $296 $284 746 10% 1.0% 727 2.6% 0.4% '10 '11 '12 '13 '14 '15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 '10
Slide 8: Strong financial performance
Strong financial performance $MM except EPS & BVPS Q1’18 Q4’17 Q1’17 Q1 highlights Transactional premiums written $109 $157 $89 • Transactional premiums written higher by 22% Y/Y, primarily due to higher average Portfolio premiums written 6 7 38 premium rate Total premiums written $115 $164 $127 • P
Slide 9: Delinquency trends
Delinquency trends Delinquencies outstanding New delinquencies, net of cures, by region Total 2,082 491 Total 1,809 1,759 50 Q/Q Prairies1 212 1,718 1,723 Prairies1 365 ∆ Atlantic 259 205 205 101 337 346 224 246 Atlantic 58 +5 204 214 25 53 Quebec 517 226 230 109 70 78 -2 446 427 Quebec 80 374 370 1
Slide 10: Solid underwriting profitability
Solid underwriting profitability Underwriting profitability ($ millions) Highlights Premiums earned $167 $168 $170 $171 $171 • Flat-to-modest Y/Y increase in premiums earned 6 15 expected for 2018; after growing by 6% in 2017, 23 22 Losses on claims 26 on an annual basis 31 34 32 34 Expenses 34 • Tr
Slide 11: Investments contribute steady income
Investments contribute steady income Total investments and net derivative assets ($6.5B1) Interest rate hedge program Investments: $6.3B Interest rate swaps 2018 forward curve5 Notional (C$B) $3.5 14% Floating rate5 1.67% Federals Duration: 3.9 years Fixed rate5 1.17% Book yield: 3.2%2 Spread 0.50%
Slide 12: Capital management
Capital management Regulatory capital as at Mar. 31st, 2018 (by category, $ billions unless otherwise noted)* Highlights ~4.2 ~4.3 ~0.5 Strong capital position with MCT ratio of Capital in excess of 150% ~0.5 ~170% Operational Risk 0.5 0.5 Market Risk1 0.2 0.2 Holding company cash and liquid investm
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 Q1 2018 Results Genworth MI Canada Inc. 14