Second Quarter 2021
Earnings Summary
August 4, 2021
©2021 Genworth Financial, Inc. All rights reserved.
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," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will" or words of similar meaning & include, but are not limited to, statements regarding the outlook for future business and financial performance of Genworth Financial, Inc. (Genworth) and its consolidated subsidiaries , a potential minority IPO of Enact Holdings, Inc. (Enact Holdings), future reductions of debt, potential dividends or share repurchases, and future strategic investments. Forward-looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks, including those discussed at the end of this presentation, as well as in the risk factor section of Genworth's Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission (SEC) on February 26, 2021. Genworth undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise. For information regarding forward-looking statements, see the Appendix.
Non-GAAP1 And Other Items
All financial results are as of June 30, 2021 unless otherwise noted. For additional information, please see Genworth's second quarter 2021 earnings release and financial supplement posted at genworth.com.
For important information regarding the use of non-GAAP and selected operating performance measures, see the Appendix.
Unless otherwise noted, all references in this presentation to net income (loss), net income (loss) per share, adjusted operating income (loss) and adjusted operating income (loss) per share should be read as net income (loss) available to Genworth's common stockholders, net income (loss) available to Genworth's common stockholders per diluted share, adjusted operating income (loss) available to Genworth's common stockholders and adjusted operating income (loss) available to Genworth's common stockholders per diluted share, respectively.
1 U.S. Generally Accepted Accounting Principles
Genworth 2Q21 Earnings Presentation - August 4, 2021 | 1 |
Key Themes For The 2nd Quarter Of 2021
Financial Performance
Genworth Net Income Of $240MM, Or $0.47 Per Diluted Share, And Adjusted Operating Income1 Of $194MM, Or $0.38 Per Diluted Share
Continued Progress On Company's Strategic Objectives With Strong Second Quarter Earnings, Preparations For An Initial Public Offering Of Minority Interest In Enact2 And Holding Company Debt Reduction
Enact Adjusted Operating Income Of $135MM From Favorable Loss Performance Driven By Lower New Delinquencies
Enact PMIERs3 Sufficiency Ratio Estimated At 165%, $1,941MM Above Published Requirements
U.S. Life Insurance Segment Adjusted Operating Income Of $71MM Driven By LTC4 Results Benefitting From In Force Rate Actions And Net Investment Income
Continued Progress Toward LTC Multi-Year Rate Action Plan (MYRAP) With $49MM Incremental Annual Rate Increases Approved In Second Quarter, With An Estimated Net Present Value Of Approximately $300MM
Holding Company Cash And Liquid Assets Of $842MM, Including $19MM Restricted
September 2021 Debt Redemption Of $513MM Completed Subsequent To Quarter-End
1 Non-GAAP Measure, See Appendix For Additional Information; 2 Formerly Known As U.S. Mortgage Insurance; 3 Private Mortgage Insurer Eligibility Requirements; 4 Long Term Care
Genworth 2Q21 Earnings Presentation - August 4, 2021 | 2 |
2Q21 Results Summary - Genworth Consolidated
Adjusted Operating Income (Loss) ($MM)
Enact: $135MM | 2Q21 | 1Q21 | 2Q202 | ||||||||
New Delinquencies Continued To Decline, Down 32% From | 194 | 168 | (23) | ||||||||
The Prior Quarter | |||||||||||
U.S. Life Insurance: $71MM | |||||||||||
LTC Results Include Larger Benefit From In Force Rate | 135 | ||||||||||
Actions, Including Policyholder Elections Related To A Legal | |||||||||||
126 | |||||||||||
Settlement, And Favorable Investment Income, Partially Offset | |||||||||||
By Lower Claim Terminations | |||||||||||
Life Mortality Favorable Versus Prior Quarter And Unfavorable | |||||||||||
Versus Prior Year; Lower Term Universal Life (TUL) Reserve | |||||||||||
Growth And Term DAC1 Amortization Versus Prior Year | 71 | 62 | |||||||||
Fixed Annuity Impacted By Unfavorable Mortality And Decline | 24 | ||||||||||
In Interest Rates | 15 | 12 | |||||||||
(27) | (32) | (5) | |||||||||
(39) | |||||||||||
Runoff: $15MM | |||||||||||
Variable Annuity Results Driven By Equity Market | (3) | ||||||||||
Performance And Interest Rates | |||||||||||
Corporate & Other: $(27)MM | Enact | U.S. Life | Runoff | Corp/Other | |||||||
Net Income | Net Income | Net Loss3 | |||||||||
Lower Interest Expense | |||||||||||
240 | 187 | (441) | |||||||||
- Deferred Acquisition Costs; 2 Results Re-Presented For Genworth Australia MI Sale Completed March 2021; 3 Net Loss Includes After-Tax Loss Of $516MM For AXA Settlement In Discontinued Operations
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Enact Segment - Primary Insurance In Force (IIF)
Primary IIF | By Origination Year | |||||
($B) | ||||||
2Q21 | 2Q20 | |||||
217210
38%
197
23%
13% | ||||||||
6% | 6% | 5% | 4% | |||||
3% | 2% | |||||||
2Q21 | 1Q21 | 2Q20 | 2021 2020 2019 2018 | 2017 2016 2015 | 2009 - 2008 & | |||
2014 Prior | ||||||||
Portfolio Up 10% Versus Prior Year Driven By | <10% Concentration In 2015 & Prior Books | |||||||
Historically Large 2020 And 2021 Books Partially | ||||||||
Offset By Lower Persistency | 4% In 2005-2008 Books |
Concentration Shift Driven By 2020 & 2021 New Insurance
Written (NIW) And High Lapse
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Genworth Financial Inc. published this content on 04 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2021 12:15:14 UTC.