Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Q2 2018 Earnings Presentation
14 slides from Sagen MI Canada's earnings presentation, Jul 31, 2018
Slide 1: Second Quarter 2018 Results
Second Quarter 2018 Results July 31st, 2018 Q2 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: 2Q18 financial results
2Q18 financial results $MM except loss ratio, Q2 Q1 Q2 Op. ROE, Op. EPS & 2018 2018 2017 Q/Q Y/Y Q2 key highlights MCT ratio Premiums written $172 $115 $170 +49% +1% • Total premiums written increased modestly Y/Y largely Premiums earned $171 $171 $168 Flat +2% due to a higher avg. transactional pre
Slide 4: Our environment today
Our environment today Risk Assessment Key observations ▪ Sound economic environment; GDP forecast growth of 2.0%1 in 2018 and 2.2%1 in 2019 Economic ▪ Unemployment rate near record low; rising wages in most provinces ▪ BoC overnight rate increased to 1.5%; potential for more increases in 2H18 / 2019
Slide 5: Regional risk assessment
Regional risk assessment Quarterly Snapshot TOR VAN MTL CGY CANADA Q2’18 Q/Q Teranet HPI 1 2.7% 1.9% 1.3% 0.9% 2.2% Jun‘18 UE Rate 1 6.3% 4.3% 6.0% 7.7% 5.9% GDP 2018 Forecast 2 2.4% 2.9% 2.2% 2.9% 2.0% High Denotes change from Q1’18 Size of circle reflects regional GTA total risk-in-force Key Indic
Slide 6: Top line
Top line New insurance written ($ billions) Premiums written ($ millions) Transactional Portfolio Transactional Portfolio $13.4 $602 $18.2 $0.9 $0.8 Q4 Q4 $4.5 $1.1 $157 $60 Q3 $5.6 Q3 $195 $7 $7.9 $276 $6 $8 $10.5 Q2 $5.0 $4.8 Q2 $161 $166 $2.2 $38 $11 $1.1 $5 Q1 $3.0 $3.2 $1.2 Q1 $89 $109 $6 2017
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 $332 $332 $328 $324 $323 $322 $317 $315 $304 $301 $296 $284 749 10% 1.0% 727 2% 0.3% '10 '11 '12 '13 '14 '15 '16 Q1'17 Q2'17 Q3'17
Slide 8: Strong financial performance
Strong financial performance $MM except EPS & BVPS Q2’18 Q1’18 Q2’17 Q2 highlights Transactional premiums written $166 $109 $161 • Transactional premiums written higher by 3% Portfolio premiums written 5 6 8 Y/Y, primarily due to 8% higher average premium rate Total premiums written $172 $115 $170 •
Slide 9: Delinquency trends
Delinquency trends Delinquencies outstanding New delinquencies, net of cures, by region 365 Q/Q Total 1,809 337 346 360 ∆ 1,759 1,718 1,723 1,742 25 58 45 -13 Prairies1 205 53 205 224 246 241 Atlantic 204 70 78 67 -11 214 226 229 80 230 Quebec 446 Total 155 73 -7 427 374 368 100 51 80 370 Prairies1
Slide 10: Solid underwriting profitability
Solid underwriting profitability Underwriting profitability ($ millions) Highlights Premiums earned $168 $170 $171 $171 $171 Losses on claims 6 15 22 23 25 Expenses 31 34 • Flat-to-modest Y/Y increase in premiums earned 34 32 33 expected for 2018; after growing by 6% in 2017, on an annual basis Net
Slide 11: Investments contribute steady income
Investments contribute steady income Total investments and net derivative assets ($6.5B1) Interest rate hedge program Investments: $6.4B Interest rate swaps Forward curve5 Notional (C$B) $3.5 14% Floating rate5 1.80% - 1.90% Federals Duration: 3.9 years Fixed rate5 1.17% Book yield: 3.2%2 Spread 0.6
Slide 12: Capital management
Capital management Regulatory capital as at Jun. 30th, 2018 (by category, $ billions unless otherwise noted)* Highlights ~4.3 ~4.3 ~0.5 ~0.5 Strong capital position with MCT ratio of Capital in excess of 150% ~170% and holding company cash and 0.5 0.5 Operational Risk liquid investments of $133 mill
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 Q2 2018 Results Genworth MI Canada Inc. 14