Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Genworth MI Canada — Q4 2010 Earnings Presentation
20 slides from Sagen MI Canada's earnings presentation, Feb 2, 2011
Slide 1: Q4 2010 and Year End Results
Genworth MI Canada Inc. Q4 2010 and Year End Results February 2, 2011
Slide 2: Agenda
Agenda Business Strategy Financial Review Operational Review and Outlook Question and Answer Genworth MI Canada Inc. 2 Q4 2010 February 2, 2011
Slide 3: Forward-Looking and Non-GAAP Statements
Forward-Looking and Non-GAAP 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 written, capital e
Slide 4: Business Review
Business Review BRIAN HURLEY CHAIRMAN AND CEO Genworth MI Canada Inc. 4 Q4 2010 February 2, 2011
Slide 5: Delivering on all key measures
Delivering on all key measures Full Year Q4 2010 2010 Net premiums written $134 MM $552 MM Net operating income $84 MM $343 MM Loss ratio 32% 33% Return on equity 14% 14% Operating earnings per share (diluted) $0.79 $3.01 Genworth MI Canada Inc. 5 Q4 2010 February 2, 2011
Slide 6: Market environment in 2010
Market environment in 2010 • Balanced housing market • Modest home price appreciation • Regional influences on delinquencies • Lower unemployment Genworth MI Canada Inc. 6 Q4 2010 February 2, 2011
Slide 7: Strategy delivered strong results in 2010
Strategy delivered strong results in 2010 Strategic Priorities 2010 Accomplishments Premium growth Net premiums growth of 53% Prudent risk management Loss ratio of 33% Investment portfolio returns enhancement Repositioned investment portfolio Capital flexibility More efficient capital structure Divi
Slide 8: Financial Review
Financial Review PHIL MAYERS CHIEF FINANCIAL OFFICER Genworth MI Canada Inc. 8 Q4 2010 February 2, 2011
Slide 9: Fourth quarter performance
Fourth quarter performance $ MM (except per share amounts) Q4 2010 Q3 2010 Net Premiums Written $ 134 $ 166 Premiums Earned 156 155 Losses on Claims (50) (47) Underwriting Income 77 82 Investment Income (excl. gains / losses) 44 45 Net Operating Income $ 84 $92 Operating EPS (diluted) $ 0.79 $0.81 O
Slide 10: Strong top line growth
Strong top line growth Net Premiums Written ($MM) 53% $552 • Low mortgage rates 134 • Improving economy $360 166 110 • Better market penetration 104 157 82 64 94 2009 2010 Q1 Q2 Q3 Q4 53% higher net premiums written Genworth MI Canada Inc. 10 Q4 2010 February 2, 2011
Slide 11: Solid underwriting performance
Solid underwriting performance 2010 Premiums Earned vs. Losses Combined Ratio ($MM) (%) 55% 55% $621 50% 47% 47% 33% Loss Ratio 16 17 156 18 15 17 155 154 $206 39 38 50 32 30 32 47 156 49 59 Premiums Earned Losses Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 Q2 Q3 Q4 •Size of recent books impacting premium
Slide 12: Balancing yield and quality in investments
Balancing yield and quality in investments Portfolio Market Value $5.0 B $5.1 B • Challenges 2% 1% 1%̶ Low rate environment Common Equity ̶ Short portfolio duration 46% Preferred Shares 45% Corporates • Opportunities Provincial 13% 12% ̶ Diversify asset classes − Preferred shares Federal 22% 19% − D
Slide 13: Strong capital position with flexibility
Strong capital position with flexibility Capital Base (MM) • Generating excess capital 422 − In-force profitability − Large 2006 to 2008 books consuming less capital 2,643 2,589 • Capital management priorities Q4 2009 Q4 2010 − Investing for growth Shareholders' Equity Debt Outstanding − Returning c
Slide 14: IFRS update
IFRS update • Limited financial impact of conversion to IFRS − $39,000 decline in opening shareholders’ equity at Jan. 1, 2010 • Key IFRS conversion milestones achieved − 2010 comparative financial results under IFRS − Interim IFRS financial statements template • On track to report Q1 2011 results u
Slide 15: Operational Review
Operational Review PETER VUKANOVICH PRESIDENT AND COO Genworth MI Canada Inc. 15 Q4 2010 February 2, 2011
Slide 16: Operational highlights
Operational highlights Growth • Increased business with all lender segments • Enhanced service experience • Continued focus on training and education initiatives • Improved visibility through branding initiatives Focused on exceeding customer needs Genworth MI Canada Inc. 16 Q4 2010 February 2, 2011
Slide 17: Operational highlights
Operational highlights Risk and Loss Mitigation • Improved housing market analytics • Enhanced collateral valuation capabilities • Completed 1,400 workouts • Proactively managing foreclosed properties Focused on minimizing losses and keeping families in homes Genworth MI Canada Inc. 17 Q4 2010 Febru
Slide 18: Mortgage portfolio performance
Mortgage portfolio performance Insurance Stabilizing Delinquency Rate In-force 31 Dec 2010 30 Sept 2010 30 Jun 2010 31 Dec 2010 Ontario 0.18% 0.17% 0.19% 46% BC 0.30% 0.27% 0.26% 16% Alberta 0.62% 0.58% 0.57% 16% Quebec 0.23% 0.21% 0.24% 15% Other 0.17% 0.19% 0.17% 7% Canada 0.26% 0.25% 0.26% Season
Slide 19: Our focus for 2011
Our focus for 2011 Focus on customer service as a driver for organic growth Actively mitigate losses on claims Prudently enhance investment portfolio yield Operate with efficient capital structure Focus on growth and returns Genworth MI Canada Inc. 19 Q4 2010 February 2, 2011
Slide 20: Question and Answer
Question and Answer SAMANTHA CHEUNG For further info: VP INVESTOR RELATIONS 905 287 5482 samantha.cheung@genworth.com www.genworth.ca Genworth MI Canada Inc. 20 Q4 2010 February 2, 2011