Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Q3 2019 Earnings Presentation
16 slides from Sagen MI Canada's earnings presentation, Oct 29, 2019
Slide 1: Third Quarter 2019 Results
Third Quarter 2019 Results October 29th, 2019 Q3 2019 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: 3Q19 financial results
3Q19 financial results $MM except loss ratio, Op. ROE, Op. EPS & Q3 Q2 Q3 Q/Q Y/Y Q3 key highlights MICAT/MCT ratio 2019 2019 2018 Premiums written $218 $195 $196 +12% +11% • Total premiums written increased Y/Y by 11% primarily Premiums earned $171 $169 $169 +1% +1% due to increased transactional i
Slide 4: Our environment today
Our environment today Risk Assessment Denotes change from Q2’19 Key observations ! Resilient Canadian economy. GDP forecast1 for 2019 at 1.3%, growth expected to pick up to 1.9% in 2020 Economic ! Slowing global growth driven by trade conflicts, geopolitical tensions & uncertainty ! BoC overnight ra
Slide 5: Regional risk assessment
Regional risk assessment Quarterly Snapshot TOR VAN MTL CGY CANADA Q3’19 Q/Q Teranet HPI 1 3.0% -2.0% 3.5% 1.2% 1.7% Q3‘19 UE Rate 1 5.8% 4.6% 5.5% 7.1% 5.6% High Denotes change from Q2’19 Size of circle reflects regional total risk-in-force Key Indicators GTA riskRisk ! Overvaluation Ontario ! Affo
Slide 6: Top line
Top line New insurance written ($ billions) Premiums written ($ millions) Transactional Portfolio Transactional Portfolio $619 $17.8 $500 $14.3 Q4 $151 YTD Q4 $4.3 YTD $4.7 $4.2 YTD $213 Q3 $5.5 $6.1 Q3 $192 $1.3 $19 $1.1 $20 YTD $468 $5 $13.4 $0.8 $6 Q2 $4.8 $5.3 $2.4 Q2 $166 $187 $4 $1.1 $3.1 $8 $
Slide 7: Strong portfolio quality
Strong portfolio quality Credit score1 Average home price2 Stacked risk factors3 (In ‘$000s) % Score <660 Avg score $350 $349 $342 $341 $336 $331 $327 $324 $323 $322 $315 $304 $301 $296 $284 748 9.8% 1.0% 727 2.7% 0.1% '10 '11 '12 '13 '14 '16 '17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 '15 '10 '11
Slide 8: Strong financial performance
Strong financial performance $MM except EPS & BVPS Q3’19 Q2’19 Q3’18 Q3 highlights Transactional premiums written $213 $187 $192 • Transactional premiums written were higher Portfolio premiums written 6 8 4 by 10% Y/Y, driven by increased housing market activity and ongoing market share Total premiu
Slide 9: Delinquency trends
Delinquency trends Outstanding delinquencies New delinquencies, net of cures, by region 405 Q/Q Total 1,695 1,760 1,761 373 ∆ 1,701 Total 1,684 328 59 Prairies1 258 242 326 48 14 247 244 240 Prairies1 Atlantic 215 221 42 52 73 281 69 206 192 199 21 Atlantic 47 46 34 326 275 295 54 Quebec 349 347 48
Slide 10: Solid underwriting profitability
Solid underwriting profitability Underwriting profitability ($ millions) Highlights Premiums earned $169 $169 $169 $169 $171 • Full year 2019 premiums earned are expected to 23 be flat to modestly lower Y/Y due to relatively Losses on claims 30 25 26 31 smaller recent books Expenses 32 33 34 32 33 •
Slide 11: Investments contribute steady income
Investments contribute steady income Total investments and net derivative assets ($6.7B1) Interest rate hedge program Investments: $6.7B Interest rate swaps Forward curve5 Notional (C$B) $3.5 13% Floating rate5 1.75% - 2.00% Federals Duration: 3.6 years Fixed rate5 1.17% Book yield: 3.2%2 Spread ~0.
Slide 12: Capital management
Capital management Regulatory capital as at September 30th, 2019 (by category, $ millions unless otherwise noted)* Highlights MICAT ! Strong capital position with MICAT ratio of Sep. 30th, 2019 Jun. 30th, 2019 172% Capital available 4,351 4,420 ! Holding company cash and liquid investments of $226 m
Slide 13: Transition of services
Transition of services Planning underway to transition services currently outsourced to Genworth Financial Services ! Finance (including treasury, investment management, tax and accounting) provided by and related services Genworth ! Human resources, employee benefits and related services, Financial
Slide 14: Key strategic priorities
Key strategic priorities 1 2 3 4 5 Drive market Continue to Develop Right-size Influence key share growth exercise prudent innovative our capital government by leveraging risk product levels to stakeholders to advanced management solutions to drive focus on first analytics and and proactive enhance
Slide 15: Investor day 2019
Investor day 2019 Please join us for an interactive discussion with senior leaders from Genworth MI Canada to gain insights on the current dynamics, trends and strategies impacting our business. THURSDAY, DECEMBER 5, 2019 9:00 AM - 10:00 AM Registration & Hot Breakfast 10:00 AM – 11:30 AM Executive
Slide 16: Investor Relations
Aaron Williams, CPA, CA Vice President, Finance/Investor Relations 905.287.5504 aaron.williams@genworth.com Investor Relations investor.genworthmicanada.ca investor@genworth.com Q3 2019 Results Genworth MI Canada Inc. 16