Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Investor Day (November 2013)
38 slides from Sagen MI Canada's investor day presentation, Nov 18, 2013
Slide 1: Investor Day
©2013 Google ©2013 Google Investor Day Genworth MI Canada, Inc. November 18, 2013 Actionable Strategies for 2014 Genworth MI Canada Inc. (TSX:MIC) Actionable Strategies for 2014
Slide 2: Welcome
Welcome Genworth MI Canada Inc. Investor Day Samantha November 18, 2013 Cheung Vice VP, Investor President, Investor RelationsRelations Actionable Strategies for 2014 Genworth MI Canada Inc. (TSX:MIC) 1 Actionable Strategies for 2014
Slide 3: Forward-looking and non-IFRS statements
©2013 Google Forward-looking and non-IFRS statements This presentation includes certain forward-looking statements. These forward-looking statements include, but are not limited to, statements with respect to the Company’s future operating and financial results, expectations regarding premiums writt
Slide 4: Agenda
©2013 Google ©2013 Google Agenda PANEL 1: Driving Core Growth PANEL 2: Proactively Mitigating Risk PANEL 3: Sustaining Profitability Actionable Strategies for 2014 Genworth MI Canada Inc. (TSX:MIC) 2 Actionable Strategies for 2014
Slide 5: Panel members
INTRO PANEL PANEL 1 MEMBERS Moderator Stuart Debbie Susan Lisa Levings McPherson Noonan Trudell PANEL 2 Robert Craig Jamie Kirby Sweeney Woods Brian Hurley PANEL 3 Chairman, Chief Executive Officer Rick Winsor Philip Barnett Macdonell Mayers Genworth MI Canada Inc. (TSX:MIC) 3 Actionable Strategies
Slide 6: Panel 1: Driving Core Growth
PANEL 1 DRIVING CORE GROWTH Moderator Brian Stuart Debbie Susan Lisa Hurley Levings McPherson Noonan Trudell Chairman, Chief Senior Vice Senior Vice Vice President, Vice-President, Executive Officer President, Chief President, Sales Operations Business Operating and Marketing Development Officer Gen
Slide 7: Genworth Served Market
Genworth Served Market PANEL 1 DRIVING Average CORE Average Average home price gross debt GROWTH income servicing Genworth Market % Variance Genworth Genworth Vancouver $454K $784K -42% $103K 28% GTA $417K $526K -21% $101K 28% Calgary $387K $439K -12% $107K 25% Montreal $303K $325K -7% $83K 26% Stua
Slide 8: Average High Ratio Borrower ~95% LTV
Average High Ratio Borrower ~ 95% LTV PANEL 1 Attributes Observations DRIVING CORE GROWTH 2007 Q3 2013 Credit Score 713 729 16 point increase in credit score Total Debt Stable debt ratios despite prices 34% 33% Service Ratio Refinance 13% 0% 100% purchase transactions Amortization 32 25 25 y
Slide 9: Delivering Value Beyond Mortgage Insurance
Delivering Value Beyond Mortgage Insurance PANEL 1 DRIVING Key Stakeholders CORE GROWTH Branches, Specialists, Mortgage Risk and C-Suite Underwriting Business Line Treasury Centres Underwriting Operations Sales Risk Sr. Leadership Debbie Genworth Team Support McPherson Senior Vice President, Sales a
Slide 10: Panel 1 Takeaways
©2013 Google PANEL 1 TAKEAWAYS DRIVING CORE GROWTH The first-time buyer market will continue to drive demand for mortgage insurance We strategically add value to our lenders We have the momentum to drive core growth Genworth MI Canada Inc. (TSX:MIC) 8 Actionable Strategies for 2014
Slide 11: Panel 1 Open Q&A
PANEL 1 OPEN Q&A Moderator Brian Stuart Debbie Susan Lisa Hurley Levings McPherson Noonan Trudell Chairman, Chief Senior Vice Senior Vice Vice President, Vice-President, Executive Officer President, Chief President, Sales Operations Business Operating and Marketing Development Officer Genworth MI Ca
Slide 12: Panel 2: Proactively Mitigating Risk
PANEL 2 PROACTIVELY MITIGATING RISK Moderator Brian Robert Craig Jamie Hurley Kirby Sweeney Woods Chairman, Chief Vice President, Senior Vice Regional Risk Executive Officer Loss Mitigation President, Chief Manager and Risk Officer Investigations Genworth MI Canada Inc. (TSX:MIC) 10 Actionable Strat
Slide 13: Risk Management Framework
Risk Management Framework PANEL 2 Risk Framework Key Focus Areas PROACTIVELY MITIGATING RISK Macro-economic environment Identify and assess key Housing market trends performance risks Regional risk factors Underwriting guidelines/policy Manage and control Risk limits and triggers quality o
Slide 14: Housing Risk Scorecard
Housing Risk Scorecard PANEL 2 Acceptable PROACTIVELY Watch Areas MITIGATING Monitoring RISK Risk Key Risks Assessment / Actions Level Increased scrutiny on new projects Toronto Condos Oversupply Rental Market remains tight Increased attention on income / Toronto Single qualifying Affordability Fami
Slide 15: Delinquency Cycle – Integration is Key
Delinquency Cycle – Integration is Key PANEL 2 PROACTIVELY MITIGATING RISK Objecti Assessment Foreclosure & Sale Recovery 1 – 3 Months 4 – 18 Months 18 + Months ves Prevent Engage Recover Awareness/education Shortfall sales Third parties Homeowner Asset management Borrowers assistance pr
Slide 16: Panel 2 Takeaways
©2013 Google PANEL 2 TAKEAWAYS PROACTIVELY MITIGATING RISK Our comprehensive risk framework helps us stay ahead of emerging risks Our insurance portfolio quality continues to be strong Our loss mitigation strategy is a key differentiator Genworth MI Canada Inc. (TSX:MIC) 14 Actionable Strategi
Slide 17: Panel 2 Open Q&A
PANEL 2 OPEN Q&A Moderator Brian Robert Craig Jamie Hurley Kirby Sweeney Woods Chairman, Chief Vice President, Senior Vice Regional Risk Executive Officer Loss Mitigation President, Chief Manager and Risk Officer Investigations Genworth MI Canada Inc. (TSX:MIC) 15 Actionable Strategies for 2014
Slide 18: Panel 3: Sustaining Profitability
PANEL 3 SUSTAINING PROFITABILITY Moderator Brian Rick Winsor Philip Hurley Barnett Macdonell Mayers Chairman, Chief Vice President, Senior Vice Senior Vice Executive Officer Investments President, President, Chief General Counsel Financial Officer and Secretary Genworth MI Canada Inc. (TSX:MIC) 16 A
Slide 19: Genworth Served Market Trends
Genworth Served Market Trends PANEL 3 SUSTAINING 720 726 727 727 730 733 Average Credit Score PROFITABILITY Improving quality “A” quality borrower only 08 09 10 11 12 Q3 2013 ($000’s) Average Home Price 256 266 284 296 301 302 Modest price increase for balance 2013 for first-time buyer segment
Slide 20: Multiple Top Line Growth Levers
Multiple Top Line Growth Levers PANEL 3 SUSTAINING Gross Premiums Written ($MM) PROFITABILITY Total 374 564 545 560 382 9 Months Portfolio 16 19 77 Insurance 4 54 Flow 549 525 483 370 329 2009 2010 2011 2012 Q3 2013 Philip Mayers Growth Levers Larger high loan-to-value market Senior Vice President
Slide 21: Underwriting Profits
Underwriting Profits PANEL 3 ($MM) SUSTAINING Premiums Earned 610 621 612 589 431 PROFITABILITY 9 Months Expenses 103 91 101 105 256 206 225 80 Losses on Claims 194 111 Underwriting 312 287 291 263 240 Profit 2009¹ 2010 2011 2012 Q3 2013 Loss Ratio 42% 33% 37% 33% 26% Philip Notes: Amounts may not t
Slide 22: Earnings Profile
Earnings Profile PANEL 3 ($MM) SUSTAINING Operating Income 307 343 318 339 264 9 Months PROFITABILITY Investment Income (After Tax) 118 125 120 110 89 Underwriting 225 188 208 214 Profit (After Tax) 174 2009 2010 2011 2012 Q3 2013 Loss Ratio 42% 33% 37% 33% 26% Operating EPS $2.671 $3.01 $3.08 $3.43
Slide 23: Fixed Income - $4.9 Billion
Fixed Income - $4.9 Billion (As at Sept 30, 2013) PANEL 3 MIC vs. Bond Universe & Peers MIC Corporate Distribution SUSTAINING 2% PROFITABILITY 1% 8% 3% EMD 30% 12% 40% 37% Corporate 31% 48% Provincials 20% 34% 39% 18% Federal 37% 29% MIC DEX Peers 11% Total Return Financials Energy 3.8% (1.6)% 0% Q3
Slide 24: Equities Portfolio - $219 Million
Equities Portfolio - $219 Million (as at Sept 30, 2013) PANEL 3 Portfolio Size Total Returns SUSTAINING (9 months ended Sept 30, 2013) PROFITABILITY (Including dividends) ($MM) 328 313 251 8.70% 219 5.31% Q4 2012 Q1 2013 Q2 2013 Q3 2013 MIC TSX Rick Focus on high quality dividend paying stocks...
Slide 25: Fixed Income Portfolio Performance
Fixed Income Portfolio Performance PANEL 3 6.5% SUSTAINING PROFITABILITY 6.0% 5.5% 5.0% Genworth Return (% p.a.) 4.5% Median 4.0% 3.5% 3.0% Rick 2.5% Barnett 1.6% 2.1% 2.6% 3.1% 3.6% 4.1% Standard Deviation Vice President, Source: Q2 2013 Survey of large property & casualty insurers conducted by PCI
Slide 26: Regulatory Capital
Regulatory Capital PANEL 3 SUSTAINING Total MCT1 188% 199% 213% 210% 216% 218% PROFITABILITY 51% 40% 43% 39% MIC Guarantee Fund 216% 218% 162% 170% 149% 156% MIC Base Philip 2009 2010 2011 2012 Q2 2013 Q3 2013 Mayers 1. Adjusted for Guarantee Fund which was deducted from regulatory capital available
Slide 27: MIC Capital Management Objectives
MIC Capital Management Objectives PANEL 3 SUSTAINING PROFITABILITY Maintain Strong Ongoing Access Claim Paying to Capital Markets Ability Staggered debt “AA” rating for Capital Capital maturities Leverage <20% insurance co. Strength Flexibility Stress testing New capital test for 2015 Capi
Slide 28: Ideal Mortgage Insurance Market
Ideal Mortgage Insurance Market PANEL 3 Principle Benefit to Canadians SUSTAINING PROFITABILITY Disciplined Insurers act as second set of eyes underwriting Current Environment Rigorous claims process Clear industry-wide standards and shared accountability Well capitalized, prudent risk management, r
Slide 29: Panel 3 Takeaways
©2013 Google PANEL 3 TAKEAWAYS SUSTAINING PROFITABILITY Mortgage insurance is an essential element of Canada’s housing finance system Several levers for core growth Active investment portfolio management Balancing capital strength, flexibility and efficiency Well positioned to deliver sust
Slide 30: Panel 3 Open Q&A
PANEL 3 OPEN Q&A Moderator Brian Rick Winsor Philip Hurley Barnett Macdonell Mayers Chairman, Chief Vice President, Senior Vice Senior Vice Executive Officer Investments President, President, Chief General Counsel Financial Officer and Secretary Genworth MI Canada Inc. (TSX:MIC) 28 Actionable Strate
Slide 31: Wrap-up
©2013 Google ©2013 Google Wrap-up Actionable Strategies for 2014 Genworth MI Canada Inc. (TSX:MIC) 29 Actionable Strategies for 2014
Slide 32: Biographies
©2013 Google BIOGRAPHIES Brian led the establishment of Stuart Levings is a qualified Genworth into the Canadian Chartered Accountant with over marketplace in 1994 and later 15 years of professional led it through its initial public experience in a variety of offering in 2009. He has more industry s
Slide 33: Biographies
©2013 Google BIOGRAPHIES Debbie is responsible for Susan is responsible for developing and executing sales developing and executing the and marketing strategies, customer experience strategies including key initiatives such as within the Canadian underwriting customer segmentation and sales and call
Slide 34: Biographies
©2013 Google BIOGRAPHIES Lisa is responsible for managing Robert is responsible for Claims key mortgage lender management, Default relationships at a national level to Management, Quality Assurance, develop mutually beneficial Appraisal Management and our strategies and resolve customer Special Inve
Slide 35: Biographies
©2013 Google BIOGRAPHIES Craig has more than 17 years of In his role as a Regional Risk professional experience in the Manager, Jamie provides mortgage and banking industry. constant analysis of the impacts Since joining the Company in of the economy on different 1998, he has held senior segments of
Slide 36: Biographies
©2013 Google BIOGRAPHIES Rick joined Genworth Canada in Winsor is responsible for all of 2008 after a career of over 20 the Company’s legal and years of capital markets trading compliance matters, as well as and investment experience. Prior government relations. Winsor to joining the company, Rick w
Slide 37: Biographies
©2013 Google BIOGRAPHIES Philip became Chief Financial Samantha joined the Company in Officer of the Company in 2009. 2009 at the time of the IPO to He has over 20 years of finance establish and lead the Investor and general management Relations platform. Prior to this, experience in financial servi
Slide 38: Investor Day
©2013 Google Investor Day 2013 Actionable Strategies for 2014 CONTACT: Samantha Cheung, Vice President, Investor Relations 905 287 5482 Samantha.Cheung@genworth.com Genworth MI Canada Inc. (TSX:MIC) Actionable Strategies for 2014