Sagen MI Canada Inc · TSX:MIC.PR.A

Sagen MI Canada — Genworth MI Canada — Debt Investor Presentation (June 2013)

17 slides from Sagen MI Canada's debt investor presentation, Jun 13, 2013

  1. Slide 1: BMO Fixed Income Conference

    PHILIP MAYERS, CFO BMO Fixed Income Conference June 13, 2013 Genworth MI Canada Inc. 1 June, 2013

  2. Slide 2: Forward-looking and non-IFRS statements

    Forward-­‐looking and non-­‐IFRS statements This presenta8on includes certain forward-­‐looking statements. These forward-­‐looking statements include, but are not limited to, statements with respect to the Company’s future opera8ng and financial results, expecta8ons regarding premiums wriDen, capita

  3. Slide 3: Leading private mortgage insurer

    Leading private mortgage insurer § Providing residen8al mortgage insurance since 1995 § ADrac8ve mortgage market § Proven track record of success § Long standing rela8onships with the Canadian lenders § High quality and diversified insurance por\olio § Proac8ve risk management pla\orm § High q

  4. Slide 4: Solid Q1 2013 results

    Solid Q1 2013 results $ MM Q1 2013 Full Year 2012 UnderwriNng Results Premiums wriDen $84 $560 Loss ra8o 31% 33% Underwri8ng income (pre-­‐tax) $74 $291 Profitability Net opera8ng income 1 $ 85 $339 Shareholders’ Equity (Incl. AOCI) $3,104 $3,037 Opera8ng Return on equity 12% 13% Debt Outstanding $42

  5. Slide 5: Risk management framework

    Risk management framework Risk Framework Key Focus Areas § Unemployment rate Assessment of § Home prices macro-economic environment § Housing market trends § Underwriting fundamentals Disciplined approach to § Risk-based collateral adjudication new business origination § Avoid risk concentrati

  6. Slide 6: Performance drivers

    Performance drivers Frequency Severity Unemployment Rate (UE, right axis) Average Price ($000s) and Mortgage Arrears (left axis) 400 1.0% 12% 350 0.8% Unemployment 10% 300 0.5% 8% 0.3% 6% 250 Mortgage arrears 0.0% 4% 200 89 91 93 95 97 01 03 05 07 09 11 07 08 09 10 11 12 13F Sources: Source: Canadia

  7. Slide 7: Canada housing market

    Canada housing market Average Sales Price National (CAD $000s) Ontario Alberta 700 Quebec Pacific § Low rates and healthy employment 600 levels con8nues to support market § Balanced market keeping prices 500 rela8vely flat 400 § Market adap8ng to lower but sustainable level of housing ac8vity 300

  8. Slide 8: Mortgage originations outlook

    Mortgage origina8ons outlook Housing Resales and Completions (units in thousands) § Goal of homeownership a strong Resales Completions influencing factor § Mortgage rule changes impac8ng 176 187 176 180 179 demand § New to Canada a key component to growth 466 448 459 454 441 § Affordability suppor

  9. Slide 9: Served market trends

    Served market trends Average credit score 720 726 727 727 730 731 § Improving quality § “A” quality borrowers only 08 09 10 11 12 Q1'13 Average home price § First-­‐8me borrower segment 296 301 307 § Modest increase in home prices 256 266 284 § Flat home price outlook for the balance of 08 09 1

  10. Slide 10: Delinquency trends

    Delinquency trends Number of Reported Delinquencies 25% Decline YoY 2623 2408 § Lower number of delinquencies 2183 2153 reflect improving employment trend Other 1963 Quebec § Declining trend in all regions Alberta § Alberta down by 48% YoY BC § Ontario down by 21% YoY Ontario § Quebec down by 18

  11. Slide 11: Premiums cover losses during stress

    Premiums cover losses during stress Stress Scenario 2011 Book Example Full Cycle Scenario (Early 90’s recession) New Insurance in Force $22 B $22 B Claim Severity 27% 35% Gross Exposure $6 B $8 B Claim Frequency 3% 6% Loss Exposure $181 MM $480 MM Premiums Written $514 MM $514 MM Loss Ratio 35% 92%

  12. Slide 12: Strategic priorities

    Strategic priori8es § Con8nue to strengthen market posi8on § Proac8ve risk management § Maintain strong government rela8ons § Rigorous capital management § Drive posi8ve and powerful customer experience § ADract, retain and engage top talent Focused on strong business execuNon Genworth MI Cana

  13. Slide 13: Underwriting performance scorecard

    Underwri8ng performance scorecard Premiums Written Premiums Earned $MM 552 533 550 359 610 621 612 536 514 473 589 355 `2009 `2010 `2011 `2012 `2009 `2010 `2011 `2012 HLTV Portfolio Insurance Combined Ratio Underwriting Profit 14 17 311 287 291 17 18 257 42 33 37 33 `2009 `2010 `2011 `2012 `2009 `20

  14. Slide 14: Underwriting performance scorecard

    Underwri8ng performance scorecard Earnings Curve Premiums Earned 20% 18% 16% 14% Q4 12% 10% 8% 610 621 612 6% 589 4% 2% 0% `20091 `2010 `2011 `2012 1 2 3 4 5 6 7 1. Excludes $100 MM impact of change to the premium recognition curve in 2009 § Single upfront premium results in significant unearned pre

  15. Slide 15: Investment portfolio remains high quality

    Investment por\olio remains high quality $ Billion Por]olio Assets (MV) $5.3 Pre-­‐tax yield1 3.7 % § Balanced high quality por\olio Dura8on Cash 3.6 years • 49% federal & provincial bonds 5% Common Equity • 40% corporate bonds 6% • 96% of bonds ‘A’ or higher Federal § $324 million posi8ve mark-­‐

  16. Slide 16: Strong capital position with flexibility

    Strong capital posi8on with flexibility § Focused on maintaining strong credit Minimum Capital Test RaNo ra8ngs DBRS S&P Senior unsecured AA (low) A- 210% 216% debentures stable stable 170% 25% 31% 162% 156% Buffer 11% 17% 25% § Modest leverage with staggered debt Internal 145% 185% 185% maturi8es 1

  17. Slide 17: Strategic priorities remain the same

    Strategic priori8es remain the same! Disciplined execuNon Proven business model Solid financial foundaNon Profitability remains a key focus Genworth MI Canada Inc. 17 June, 2013

Genworth MI Canada — Debt Investor Presentation (June 2013) on 6ix