Genworth Financial Inc · NYSE:GNW
Genworth Financial — Q1 2022 Earnings Presentation
25 slides from Genworth Financial's earnings presentation, May 3, 2022
Slide 1: First Quarter 2022 Earnings Summary
First Quarter 2022 Earnings Summary May 3, 2022 ©2022 Genworth Financial, Inc. All rights reserved. ©2021 Genworth Financial, Inc. All rights reserved.
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation contains certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipa
Slide 3: Key Themes for the 1st Quarter of 2022
Key Themes for the 1st Quarter of 2022 Summary Highlights Announced $350mm share repurchase authorization, the first shareholder return program in over 13 years First quarter net income of $149mm, or $0.29 per diluted share, and adjusted operating income1 of $131mm, or $0.25 per diluted share Enact
Slide 4: Strategic Priorities
Strategic Priorities Reduce holding company Maximize value of Enact debt to ~$1b Achieve economic Return capital to breakeven/stabilize legacy LTC shareholders block Advance Global Care Solutions initiatives Genworth 1Q22 Earnings Presentation – May 3, 2022 3
Slide 5: 1Q22 Results Summary – Genworth Consolidated
1Q22 Results Summary – Genworth Consolidated Adjusted Operating Income (Loss) ($mm) Enact: $135mm1 1Q22 4Q21 1Q21 Continued insurance in-force growth, up 10% versus prior year 131 164 168 Lower losses from favorable reserve development U.S. Life Insurance: $(4)mm Lower variable investment income Ele
Slide 6: Enact Segment
Enact Segment Primary Insurance In-Force (IIF) Premiums ($b) ($mm) 234 237 252 232 227 210 1Q22 4Q21 1Q21 Primary NIW 18,823 21,441 24,934 Premiums were lower versus the prior quarter and prior year as in-force growth was offset by the continued lapse of older, higher-priced policies and lower s
Slide 7: Enact Segment
Enact Segment Benefits/Changes in Policy Reserves Sufficiency to Published PMIERs2,3,4 ($mm) ($mm) 55 (10) 6 176% 165% 159% 1Q22 4Q21 1Q21 2,261 2,003 1,764 Loss Ratio (4)% 3% 22% Primary Delqs (#) 22,571 24,820 41,332 Primary New Delqs (#) 8,724 8,282 10,053 1Q22 4Q21 1Q21 Primary Paid Claims (#) 1
Slide 8: U.S. Life Insurance Segment
U.S. Life Insurance Segment Highlights Adjusted Operating Income (Loss) LTC: $59mm ($mm) Lower net investment income from limited partnerships, bond calls 1Q22 4Q21 1Q21 and commercial mortgage loan prepayments Higher new claims severity and frequency, less favorable incurred (4) 41 62 but not repor
Slide 9: LTC Incidence & Mortality Trends
LTC Incidence & Mortality Trends1 Incidence # New Active Claim Counts (000's) New active claim counts remain below pre- 4.3 pandemic levels 4.1 4.0 4.0 4.1 3.5 3.6 3.4 3.8 3.5 • Higher new active claim counts versus prior 3.2 3.4 3.1 year as incidence trends towards historical levels • Higher pendin
Slide 10: In-Force Rate Action Highlights
In-Force Rate Action Highlights Estimated Impact to GAAP Adjusted Operating Income (Loss) from In-Force Rate Actions1 Estimated GAAP Adjusted 385 422 583 943 941 1,153 243 304 Operating Income from In-Force Rate Actions1 ($mm) 598 458 540 Premiums, Premium Tax, 191 380 Commissions, Other Expenses, N
Slide 11: Impact of IFA on Pre-Tax LTC Statutory Earnings
Impact of IFA on Pre-Tax LTC Statutory Earnings1,2 Statutory Pre-Tax LTC In-Force Rate Actions vs Pre-Tax LTC Earnings $mm LTC Statutory Pre-Tax $(714) $79 $394 $910 Earnings LTC Statutory Pre-Tax Earnings From In- 1,317 1,269 1,669 Force Rate Actions3,4 758 LTC Statutory Pre-Tax (875) (759) Earning
Slide 12: LTC In-Force Rate Actions: Policyholder Responses
LTC In-Force Rate Actions: Policyholder Responses Cumulative Policyholder Responses Since 20121,2 44.1% 45.3% 37.3% 31.5% 16.4% 17.5% 11.6% 23.3% 9.7% 18.6% 7.2% 12.7% 6.1% 25.7% 27.7% 27.8% NFO 4.6% 16.1% 21.8% 12.5% RBO 8.1% 2016 2017 2018 2019 2020 2021 YTD 2022 Paying Full 87.3% 81.4% 76.7% 68.5
Slide 13: U.S. Life Insurance Segment
U.S. Life Insurance Segment Highlights Adjusted Operating Income (Loss) LTC: $59mm ($mm) Lower net investment income from limited partnerships, bond calls 1Q22 4Q21 1Q21 and commercial mortgage loan prepayments Higher new claims severity and frequency, less favorable incurred (4) 41 62 but not repor
Slide 14: U.S. Life Insurance Statutory Capital
U.S. Life Insurance Statutory Capital1 Genworth Life Insurance Company Consolidated Statutory Capital2 Risk-Based Capital Ratio3 289% 199% 213% 229% 12/31/2018 12/31/2019 12/31/2020 12/31/2021 Statutory Metrics ($mm) 2018 2019 2020 2021 Capital & Surplus 1,871 2,180 2,123 2,937 Unassigned Surplus (2
Slide 15: Holding Company Cash & Liquid Assets
Holding Company Cash & Liquid Assets1 Cash & Liquid Assets Roll Forward ($mm) Variance (141) 356 2 (85) (11) (30) 64 (79) 215 2 12/31/2021 Debt Retirement AXA Payment Cash Taxes Interest Payments Hold Co. Net 3/31/2022 Other Items $85mm from debt retirement: $82mm principal retired and $3mm net prem
Slide 16: Appendix
Appendix Genworth 1Q22 Earnings Presentation – May 3, 2022 15
Slide 17: Total Genworth Financial, Inc.’s Stockholders’ Equity (U.S. GAAP)
Total Genworth Financial, Inc.’s Stockholders’ Equity (U.S. GAAP) ($mm) 1Q22 4Q21 3Q21 2Q21 1Q21 Enact1 3,320 3,344 3,446 4,111 3,955 U.S. Life Insurance 10,106 10,970 11,617 11,296 10,698 LTC2 7,234 7,624 7,487 7,394 7,104 Life Insurance2 2,489 2,833 3,529 3,287 2,983 Fixed Annuities2 383 513 601 6
Slide 18: Individual LTC In-Force Policy Information
Individual LTC In-Force1 Policy Information Pre PCS PCS I PCS II Choice I2 Choice II PC Flex MFMP3 PC Flex II PC Flex III Total Issue Years 1974-1994 1994-1997 1997-2001 2001-2007 2003-2011 2011-2014 2009-2013 2013-2017 2014+ 1974+ Annual Premium ($mm)4 42 114 350 617 1,055 227 92 67 35 2,598 In For
Slide 19: Holding Company Debt Maturity Ladder
Holding Company Debt Maturity Ladder $82mm in open market repurchases completed in 1Q22 (Feb ‘24 debt tranche) Genworth 1Q22 Earnings Presentation – May 3, 2022 18
Slide 20: Use of Non-GAAP Measures
Use of Non-GAAP Measures This presentation includes the non-GAAP financial measures entitled "adjusted operating income (loss)" and "adjusted operating income (loss) per share." Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The chief operating decision
Slide 21: Use of Non-GAAP Measures
Use of Non-GAAP Measures In the fourth quarter of 2021, the company recorded a pre-tax loss of $92 million as a result of ceding certain term life insurance policies as part of a life block transaction. The company recorded a pre-tax expense of $5 million and $21 million in the fourth and first quar
Slide 22: Definition of Selected Operating Performance Measures
Definition of Selected Operating Performance Measures The company taxes its businesses at the U.S. corporate federal income tax rate of 21 percent. Each segment is then adjusted to reflect the unique tax attributes of that segment such as permanent differences between U.S. GAAP and tax law. The diff
Slide 23: Reconciliation of Net Income to Adjusted Operating Income
Reconciliation of Net Income to Adjusted Operating Income ($MM) 2022 2021 1Q 4Q 1Q NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS $ 149 $ 163 $ 187 Add: net income from continuing operations attributable to noncontrolling interests 30 29 - Add: net income from discontinued op
Slide 24: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans,"
Slide 25: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements • risks relating to economic, market and political conditions including: downturns and volatility in global economies and equity and credit markets, including as a result of inflation and supply chain disruptions, continued labor shortages and oth