RICHMOND, Va., Nov. 2, 2017 /PRNewswire/ --
- Strong Insurance In Force Growth, Loss Ratio, And Capital
Levels For U.S. Mortgage Insurance (MI)
- U.S. MI's PMIERs1 Sufficiency Ratio At 122 Percent,
In Excess Of $500 Million Above
Requirements
- Strong Loss Ratio And Capital Levels For Canada MI
- Annual Review of Long Term Care Insurance (LTC) Claims
Reserve Completed. No Significant Adjustments As Aggregate
LTC Claim Experience In Line with Expectations. Loss
Recognition And Cash Flow Testing Will Be Completed With The Fourth
Quarter Financial Close
- Net Income2 Included $40
Million Of Net Investment Gains, Net Of Taxes And Other
Adjustments, Primarily Related To Fixed Income Exchanges And
Derivative Gains
- Holding Company Cash And Liquid Assets Of Approximately
$830 Million
Genworth Financial, Inc. (NYSE: GNW) today reported results for
the quarter ended September 30, 2017.
The company reported net income of $107
million, or $0.21 per diluted
share, in the third quarter of 2017, compared with a net loss of
$380 million, or $0.76 per diluted share, in the third quarter of
2016. The adjusted operating income3 for the third
quarter of 2017 was $76 million, or
$0.15 per diluted share, compared
with an adjusted operating loss of $405
million, or $0.81 per diluted
share, in the third quarter of 2016.
Strategic Update
Genworth and China Oceanwide Holdings Group Co., Ltd.
(Oceanwide) continue to work towards satisfying the closing
conditions of their previously announced proposed transaction as
soon as possible.
With respect to the state regulatory review process, the
companies made progress and announced during and since the end of
the third quarter the following regulatory approvals:
- Virginia State Corporation Commission, Bureau of Insurance
- North Carolina Department of Insurance
- South Carolina Department of Insurance
- Vermont Insurance Division
Genworth and Oceanwide recently announced the withdrawal of
their joint voluntary notice with the Committee on Foreign
Investment in the United States
(CFIUS), with the intent to refile with additional mitigation
approaches. The parties are actively engaged in developing these
approaches, including the potential involvement of a U.S.
third-party service provider, and anticipate refiling a new joint
notice with CFIUS as soon as the terms of the additional mitigation
approaches are determined. Genworth and Oceanwide are fully
committed to developing an acceptable solution with CFIUS; however,
there can be no assurance that CFIUS will ultimately agree to clear
a transaction between Genworth and Oceanwide on terms acceptable to
the parties or at all.
In addition to clearance by CFIUS, the closing of the proposed
transaction remains subject to the receipt of required regulatory
approvals in the U.S., China, and
other international jurisdictions and other closing conditions.
Genworth and Oceanwide continue to be actively engaged with the
relevant regulators regarding the pending applications.
Genworth and Oceanwide are also discussing an additional waiver
of each party's right to terminate the merger agreement beyond the
November 30, 2017 deadline, and will
make a final decision regarding the deadline in the coming
weeks. Genworth and Oceanwide remain committed to satisfying
the closing conditions under the merger agreement as soon as
possible.
Separately, Genworth is currently reviewing potential
refinancing options to address upcoming debt maturities in the
event the transaction with Oceanwide cannot be completed in a
timely manner or at all. Genworth could also utilize holding
company cash and/or pursue potential asset sales to address
upcoming debt maturities in the event the transaction with
Oceanwide cannot be completed. Genworth is also evaluating options
to insulate its U.S. mortgage insurance business from additional
ratings pressure, including a potential partial sale, in the event
the transaction with Oceanwide cannot be completed.
"Genworth remains committed to the transaction with Oceanwide,
as it continues to represent the most value for all of our
stakeholders," said Tom McInerney,
president and CEO of Genworth. "While we are focused on completing
this transaction, we do have other alternatives we would turn to in
order to address our upcoming maturities and insulate our U.S.
mortgage insurance business from ratings pressure if
necessary."
LU Zhiqiang, chairman of Oceanwide, added: "Oceanwide continues
to work diligently with Genworth towards closing the transaction as
soon as possible. This transaction provides Oceanwide with
the opportunity to bring best practices from the U.S. long term
care and mortgage insurance markets to China, where we will continue to expand our
insurance capabilities."
Financial Performance
Consolidated Net
Income (Loss) &
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Adjusted Operating
Income (Loss)
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Three months ended
September 30
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(Unaudited)
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2017
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2016
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Per
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Per
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diluted
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diluted
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Total
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(Amounts in
millions, except per share)
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Total
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share
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Total
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share
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%
change
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Net Income (loss)
available to Genworth's common stockholders
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$
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107
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$
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0.21
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$
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(380)
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$
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(0.76)
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128%
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Adjusted operating
income (loss)
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$
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76
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$
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0.15
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$
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(405)
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$
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(0.81)
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119%
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Weighted-average
diluted share4
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501.6
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498.3
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Three months ended
September 30
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(Unaudited)
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2017
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2016
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Book value per
share
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$
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26.19
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$
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29.84
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Book value per share,
excluding accumulated other comprehensive income (loss)
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$
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20.10
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$
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19.40
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Net income in the third quarter of 2017 benefited from net
investment gains, net of taxes and other adjustments, of
$40 million in the quarter. The
gains were primarily related to offers to exchange fixed income
securities and improvement in the value of Canada MI interest rate
swaps. The net loss in the third quarter of 2016 benefited
from net investment gains, net of taxes and other adjustments, of
$12 million.
Net investment income was $797
million in the quarter, down from $801 million in the prior quarter and
$805 million in the prior year.
Net investment income continues to reflect variability in
prepayment speed adjustments related to residential mortgage-backed
securities and other variable investment income. The reported yield
and the core yield3 for the quarter were 4.52 percent
and 4.45 percent, respectively.
Adjusted operating income (loss) results by business line are
summarized in the table below:
Adjusted Operating
Income (Loss)
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(Amounts in
millions)
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Q3
17
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Q2
17
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Q3
16
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U.S. Mortgage
Insurance
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$
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73
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$
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91
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$
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67
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Canada Mortgage
Insurance
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37
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41
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36
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Australia Mortgage
Insurance
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12
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12
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14
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U.S. Life
Insurance
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(1)
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39
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(207)
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Runoff
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13
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11
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12
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Corporate and
Other
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(58)
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(43)
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(327)
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Total Adjusted
Operating Income (Loss)
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$
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76
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$
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151
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$
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(405)
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Adjusted operating income (loss) represents income (loss) from
continuing operations excluding net investment gains (losses),
gains (losses) on the sale of businesses, gains (losses) on the
early extinguishment of debt, gains (losses) on insurance block
transactions, restructuring costs and other adjustments, net of
taxes. A reconciliation of net income (loss) to adjusted operating
income (loss) of segments and Corporate and Other activities is
included at the end of this press release.
Unless specifically noted in the discussion of results for the
MI businesses in Canada and
Australia, references to
percentage changes exclude the impact of translating foreign
denominated activity into U.S. dollars (foreign exchange).
Percentage changes, which include the impact of foreign exchange,
are found in a table at the end of this press release.
U.S. Mortgage Insurance
Operating
Metrics
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(Dollar amounts in
millions)
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Q3
17
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Q2
17
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Q3
16
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Adjusted operating
income
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$
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73
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$
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91
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$
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67
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New insurance
written
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Primary
Flow
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$
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11,300
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$
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9,800
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$
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12,800
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Loss ratio
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20%
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2%
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21%
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U.S. MI reported adjusted operating income of $73 million, compared with $91 million in the prior quarter and $67 million in the prior year. The loss
ratio in the current quarter was 20 percent, up 18 points
sequentially and down one point from the prior year. The
company made a favorable reserve adjustment in the prior quarter of
$10 million after-tax primarily
associated with lower expected claim rates on existing
delinquencies, which benefited the loss ratio by eight
points. The company also made a favorable reserve adjustment
of $6 million after-tax in the third
quarter of 2016 associated with lower expected claim rates on early
stage delinquencies, partially offset by higher claim severity on
late stage delinquencies. This adjustment benefited the loss
ratio by six points in the third quarter of 2016.
Flow new insurance written (NIW) of $11.3
billion increased 15 percent from the prior quarter from a
seasonally larger purchase originations market, but decreased 12
percent versus the prior year from a decline in market share and
smaller mortgage insurance market. During the third quarter
of 2017, the company's concentration of single premium flow NIW was
higher than the prior quarter and prior year as it continues its
selective participation in this market. U.S. MI's flow
insurance in force increased 11 percent in the third quarter of
2017 versus the third quarter of 2016 driven primarily by strong
NIW and persistency.
Canada Mortgage Insurance
Operating
Metrics
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(Dollar amounts in
millions)
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Q3
17
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Q2
17
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Q3
16
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Adjusted operating
income
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$
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37
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$
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41
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$
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36
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New insurance
written
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Flow
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$
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4,400
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$
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3,700
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$
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5,300
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Bulk
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$
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600
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$
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800
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$
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5,100
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Loss ratio
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14%
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4%
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24%
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Canada MI reported adjusted operating income of $37 million versus $41
million in the prior quarter and $36
million in the prior year. The loss ratio in the quarter was
14 percent, up 10 points sequentially primarily from the
normalization of cure activity in the current quarter. The
loss ratio was down 10 points compared to the prior year from a
decrease in new delinquencies, net of cures, reflecting the ongoing
housing market strength and underlying economic
conditions.
Flow NIW was up 14 percent5 sequentially
primarily from a seasonally larger originations market and down 17
percent5 from the prior year primarily from a smaller
market size from regulatory changes introduced in late 2016.
Effective March 17, 2017, Canada MI
increased its flow mortgage insurance premium rates for new insured
mortgages by approximately 20 percent to reflect the updated
regulatory capital framework that came into effect on January 1, 2017. Bulk NIW decreased versus
the prior year as a result of regulatory changes introduced in 2016
and 2017.
Australia Mortgage Insurance
Operating
Metrics
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(Dollar amounts in
millions)
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Q3
17
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Q2
17
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Q3
16
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Adjusted operating
income
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$
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12
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$
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12
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$
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14
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New insurance
written
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Flow
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$
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3,700
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$
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4,100
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$
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4,600
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Bulk
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$
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600
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$
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600
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$
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—
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Loss ratio
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37%
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34%
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42%
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Australia MI reported adjusted operating income of $12 million, compared with $12 million in the prior quarter and $14 million in the prior year. The loss
ratio in the quarter was 37 percent, up three points sequentially
and down five points from the prior year. Results in the
second quarter of 2017 reflected non-reinsurance recoveries on paid
claims which favorably impacted the loss ratio by eight
points. Without the impact of these recoveries, the loss
ratio would have been lower sequentially from seasonally lower new
delinquencies, net of cures. The company is currently
reviewing its premium earning pattern, and anticipates that this
review will be completed during the fourth quarter.
Flow NIW was down 12 percent5 sequentially and down
24 percent5 from the prior year primarily from lower
market penetration attributable to a change in customer mix.
U.S. Life Insurance
Operating
Metrics
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(Amounts in
millions)
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Q3
17
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Q2
17
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Q3
16
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Adjusted operating
income (loss)
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Long Term Care
Insurance
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$
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(5)
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$
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33
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$
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(270)
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Life
Insurance
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(9)
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(1)
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48
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Fixed
Annuities
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13
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7
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15
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Total U.S. Life
Insurance
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$
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(1)
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$
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39
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$
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(207)
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Sales
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Long Term Care
Insurance
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Individual
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$
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2
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$
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2
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$
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2
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Group
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1
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1
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3
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Life
Insurance
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Universal
Life
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1
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—
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1
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Fixed
Annuities
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3
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1
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1
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Long Term Care Insurance
LTC reported an
adjusted operating loss of $5
million, compared with adjusted operating income of
$33 million in the prior quarter and
an adjusted operating loss of $270
million in the prior year. Compared to the prior quarter,
results reflected less favorable existing claim terminations,
higher benefit payments, and less favorable new claim
experience. Results in the prior quarter were also favorably
impacted by reserve corrections, net of profits followed by losses
reserves, associated with recorded initial claim dates of
$13 million after-tax. Results
in the prior year reflected updated LTC claim assumptions, which
increased reserves by approximately $435
million pre-tax and resulted in an after-tax charge to
earnings of $283 million.
Given that experience in aggregate that was analyzed in this
year's claim reserves review was in line with expectations, the
company made no significant adjustments in the current quarter to
its assumptions and methodologies related to its LTC claim
reserves. In the fourth quarter of 2017, the company will
perform loss recognition and cash flow testing for its LTC
products. As part of the annual testing, we will review
assumptions for incidence and interest rates, among other
assumptions. Results of the LTC annual testing as well as
assumption reviews and testing for life insurance and annuities
will be part of our fourth quarter earnings disclosures.
Life Insurance
Life insurance reported an
adjusted operating loss of $9
million, compared with an adjusted operating loss of
$1 million in the prior quarter and
adjusted operating income of $48
million in the prior year. Compared to the prior quarter,
results reflected unfavorable mortality. Results versus the
prior year reflected the impacts of higher reserve and higher
amortization of deferred acquisition costs (DAC) as a result of the
fourth quarter of 2016 assumption review and unfavorable mortality.
Results versus the prior year also reflected higher DAC
amortization from higher lapses, compared to original assumptions,
primarily associated with large 15-year and 20-year term life
insurance blocks entering their post-level premium periods.
We anticipate this trend to continue and DAC amortization to
increase further as large blocks reach the end of their level
premium periods through 2020. Results in the current quarter
included an unfavorable impact of $15
million after-tax from model refinements. Results in
the prior quarter included a negative impact of $14 million after-tax, which was the net effect
of a charge from model corrections related to updating mortality
tables for term conversion policies that was partially offset by a
net favorable refinement related to reinsurance rates.
Fixed Annuities
Fixed annuities reported
adjusted operating income of $13
million, compared with $7
million in the prior quarter and $15
million in the prior year. Results in the quarter
included a $6 million after-tax
charge from loss recognition testing associated with continued low
interest rates on the single premium immediate annuity block
compared to a $10 million charge in
the prior quarter and a $4 million
charge in the prior year. Results varied from the prior year
due to lower net investment spread from lower customer account
balances and lower variable investment income. Prior year
results included an $8 million
after-tax unfavorable correction related to state guaranty
funds.
Runoff
Runoff reported adjusted operating income of
$13 million compared with
$11 million in the prior quarter and
$12 million in the prior year
reflecting continued strong equity market performance supporting
our variable annuity business. Results in the prior quarter
reflected unfavorable mortality in the corporate-owned life
insurance (COLI) products.
Corporate And Other
Corporate and Other reported an
adjusted operating loss of $58
million, compared with $43
million in the prior quarter and $327
million in the prior year. Results in the current
quarter include unfavorable tax charges of $7 million related to changes and corrections to
prior period tax returns. Prior year results reflected
$265 million of deferred tax
charges.
Capital & Liquidity
Genworth maintains the following capital positions in its
operating subsidiaries:
Key Capital &
Liquidity Metrics
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(Dollar amounts in
millions)
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Q3
17
|
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Q2
17
|
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Q3
16
|
U.S.
MI
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Consolidated
Risk-To-Capital Ratio6
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12.8:1
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13.0:1
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15.0:1
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Genworth Mortgage
Insurance Corporation Risk-To-Capital Ratio6
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12.9:1
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13.1:1
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15.0:1
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Private Mortgage
Insurer Eligibility Requirements (PMIERs) Sufficiency
Ratio7
|
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122
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%
|
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122
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%
|
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|
117
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%
|
Canada
MI
|
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Minimum Capital Test
(MCT) Ratio6
|
|
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165
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%
|
|
|
167
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%
|
|
|
237
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%
|
Australia
MI
|
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|
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Prescribed Capital
Amount (PCA) Ratio6
|
|
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184
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%
|
|
|
181
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%
|
|
|
155
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%
|
U.S. Life Insurance
Companies
|
|
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Consolidated
Risk-Based Capital (RBC) Ratio6
|
|
|
320
|
%
|
|
|
331
|
%
|
|
|
340
|
%
|
Holding Company
Cash8 and Liquid Assets9
|
|
$
|
829
|
|
|
$
|
858
|
|
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$
|
1,165
|
|
Key Points
- U.S. MI's PMIERs sufficiency ratio remained at 122 percent as
an increase in operating cash flows was offset by higher required
assets associated with new business;
- Canada MI's MCT ratio as of September
30, 2017 is estimated to be 165 percent, above the
regulatory minimum requirement of 150 percent and within a target
range of 160 to 165 percent;
- Australia MI's capital levels improved sequentially to 184
percent which is above the target range of 132 to 144 percent;
- U.S. life insurance companies consolidated RBC ratio is lower
due to the reduction in covariance benefit associated with the
completion effective July 1, 2017 of
the remaining internal reinsurance transactions required under the
Oceanwide merger agreement. These transactions contributed to
approximately 15 points of the decline;
- The holding company ended the quarter with $829 million of cash and liquid assets,
representing a buffer of approximately $420
million in excess of restricted cash and liquid assets and
one and a half times annual debt service; and
- $175 million of holding company
cash is committed to facilitate the separation and isolation of the
LTC business.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 insurance
holding company committed to helping families achieve the dream of
homeownership and address the financial challenges of aging through
its leadership positions in mortgage insurance and long term care
insurance. Headquartered in Richmond, Virginia, Genworth traces its roots
back to 1871 and became a public company in 2004. For more
information, visit genworth.com.
From time to time, Genworth releases important information via
postings on its corporate website. Accordingly, investors and other
interested parties are encouraged to enroll to receive automatic
email alerts and Really Simple Syndication (RSS) feeds regarding
new postings. Enrollment information is found under the "Investors"
section of genworth.com. From time to time, Genworth's
publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth
Mortgage Insurance Australia Limited, separately release financial
and other information about their operations. This information can
be found at http://genworth.ca and
http://www.genworth.com.au.
Financial Supplement Information
This press release,
third quarter 2017 financial supplement and earnings presentation
are now posted on the company's website. Investors are encouraged
to review these materials. Due to the pending sale to China
Oceanwide, the company does not plan to host an earnings call.
Use of Non-GAAP Measures
This press release 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 maker
evaluates segment performance and allocates resources on the basis
of adjusted operating income (loss). The company defines adjusted
operating income (loss) as income (loss) from continuing operations
excluding the after-tax effects of income attributable to
noncontrolling interests, net investment gains (losses), goodwill
impairments, gains (losses) on the sale of businesses, gains
(losses) on the early extinguishment of debt, gains (losses) on
insurance block transactions, restructuring costs and infrequent or
unusual non-operating items. Gains (losses) on insurance block
transactions are defined as gains (losses) on the early
extinguishment of non-recourse funding obligations, early
termination fees for other financing restructuring and/or resulting
gains (losses) on reinsurance restructuring for certain blocks of
business. The company excludes net investment gains (losses) and
infrequent or unusual non-operating items because the company does
not consider them to be related to the operating performance of the
company's segments and Corporate and Other activities. A component
of the company's net investment gains (losses) is the result of
impairments, the size and timing of which can vary significantly
depending on market credit cycles. In addition, the size and timing
of other investment gains (losses) can be subject to the company's
discretion and are influenced by market opportunities, as well as
asset-liability matching considerations. Goodwill impairments,
gains (losses) on the sale of businesses, gains (losses) on the
early extinguishment of debt, gains (losses) on insurance block
transactions and restructuring costs are also excluded from
adjusted operating income (loss) because, in the company's opinion,
they are not indicative of overall operating trends. Infrequent or
unusual non-operating items are also excluded from adjusted
operating income (loss) if, in the company's opinion, they are not
indicative of overall operating trends.
While some of these items may be significant components of net
income (loss) available to Genworth's common stockholders in
accordance with GAAP, the company believes that adjusted operating
income (loss) and measures that are derived from or incorporate
adjusted operating income (loss), including adjusted operating
income (loss) per share on a basic and diluted basis, are
appropriate measures that are useful to investors because they
identify the income (loss) attributable to the ongoing operations
of the business. Management also uses adjusted operating income
(loss) as a basis for determining awards and compensation for
senior management and to evaluate performance on a basis comparable
to that used by analysts. However, the items excluded from adjusted
operating income (loss) have occurred in the past and could, and in
some cases will, recur in the future. Adjusted operating income
(loss) and adjusted operating income (loss) per share on a basic
and diluted basis are not substitutes for net income (loss)
available to Genworth's common stockholders or net income (loss)
available to Genworth's common stockholders per share on a basic
and diluted basis determined in accordance with GAAP. In addition,
the company's definition of adjusted operating income (loss) may
differ from the definitions used by other companies.
Adjustments to reconcile net income (loss) attributable to
Genworth's common stockholders and adjusted operating income (loss)
assume a 35 percent tax rate (unless otherwise indicated) and are
net of the portion attributable to noncontrolling interests. Net
investment gains (losses) are also adjusted for deferred
acquisition cost (DAC) and other intangible amortization and
certain benefit reserves.
In the third quarters of 2017 and 2016, the company recorded a
pre-tax expense of $1 million and
$2 million, respectively, related to
restructuring costs as part of an expense reduction plan as the
company evaluates and appropriately sizes its organizational needs
and expenses.
There were no infrequent or unusual items excluded from adjusted
operating income (loss) during the periods presented.
The tables at the end of this press release provide a
reconciliation of net income (loss) available to Genworth's common
stockholders to adjusted operating income (loss) for the three
months ended September 30, 2017 and
2016, as well as for the three months ended June 30, 2017, and reflect adjusted operating
income (loss) as determined in accordance with accounting guidance
related to segment reporting.
This press release includes the non-GAAP financial measure
entitled "core yield" as a measure of investment yield. The company
defines core yield as the investment yield adjusted for items that
do not reflect the underlying performance of the investment
portfolio. Management believes that analysis of core yield enhances
understanding of the investment yield of the company. However, core
yield is not a substitute for investment yield determined in
accordance with GAAP. In addition, the company's definition of core
yield may differ from the definitions used by other companies. A
reconciliation of core yield to reported GAAP yield is included in
this appendix.
Definition of Selected Operating Performance
Measures
The company reports selected operating performance
measures including "sales" and "insurance in force" or "risk in
force" which are commonly used in the insurance industry as
measures of operating performance.
Management regularly monitors and reports sales metrics as a
measure of volume of new and renewal business generated in a
period. Sales refer to: (1) new insurance written for mortgage
insurance; (2) annualized first-year premiums for long term care
and term life insurance products; (3) annualized first-year
deposits plus five percent of excess deposits for universal and
term universal life insurance products; (4) 10 percent of premium
deposits for linked-benefits products; and (5) new and additional
premiums/deposits for fixed annuities. Sales do not include renewal
premiums on policies or contracts written during prior periods. The
company considers new insurance written, annualized first-year
premiums/deposits, premium equivalents and new premiums/deposits to
be a measure of the company's operating performance because they
represent a measure of new sales of insurance policies or contracts
during a specified period, rather than a measure of the company's
revenues or profitability during that period.
Management also regularly monitors and reports a loss ratio for
the company's businesses. For the mortgage insurance businesses,
the loss ratio is the ratio of incurred losses and loss adjustment
expenses to net earned premiums. For the long term care insurance
business, the loss ratio is the ratio of benefits and other changes
in reserves less tabular interest on reserves less loss adjustment
expenses to net earned premiums. The company considers the loss
ratio to be a measure of underwriting performance in these
businesses and helps to enhance the understanding of the operating
performance of the businesses.
An assumed tax rate of 35 percent is utilized in certain
adjustments to adjusted operating income (loss) and in the
explanation of specific variances of operating performance and
investment results.
These operating performance measures enable the company to
compare its operating performance across periods without regard to
revenues or profitability related to policies or contracts sold in
prior periods or from investments or other sources.
Cautionary Note Regarding Forward-Looking
Statements
This press release 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," "believes,"
"seeks," "estimates," "will" or words of similar meaning and
include, but are not limited to, statements regarding the outlook
for the company's future business and financial performance.
Examples of forward-looking statements include statements we make
relating to the China Oceanwide transaction. 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 from those in the
forward-looking statements due to global political, economic,
business, competitive, market, regulatory and other factors and
risks, including, but not limited to, the following:
- risks related to the proposed transaction with China
Oceanwide Holdings Group Co., Ltd. (Oceanwide) including: the
company's inability to complete the transaction in a timely manner
or at all; the parties' inability to obtain regulatory approvals,
including from the Committee on Foreign Investment in the United States ("CFIUS"), or the
possibility that such regulatory approvals may further delay the
transaction or will not be received prior to November 30, 2017 (and either or both of the
parties may not be willing to further waive their end date
termination rights beyond November 30,
2017) or that materially burdensome or adverse regulatory
conditions may be imposed or undesirable measures may be required
in connection with any such regulatory approvals including any
mitigation approaches that may be necessary to obtain CFIUS
approval (including conditions or measures that either or both of
the parties may be unwilling to accept or undertake, as
applicable); existing and potential legal proceedings may be
instituted against the company in connection with the transaction
that may delay the transaction, make it more costly or ultimately
preclude it; the risk that the proposed transaction disrupts the
company's current plans and operations as a result of the
consummation of the transaction; certain restrictions during the
pendency of the transaction that may impact the company's ability
to pursue certain business opportunities or strategic transactions;
continued availability of capital and financing to the company
before, or in the absence of, the consummation of the transaction;
further rating agency actions and downgrades in the company's debt
or financial strength ratings; changes in applicable laws or
regulations; the company's ability to recognize the anticipated
benefits of the transaction; the amount of the costs, fees,
expenses and other charges related to the transaction; the risks
related to diverting management's attention from the company's
ongoing business operations; the merger agreement may be terminated
in circumstances that would require the company to pay Oceanwide a
fee; the company's ability to attract, recruit, retain and motivate
current and prospective employees may be adversely affected; and
disruptions and uncertainty relating to the transaction, whether or
not it is completed, may harm the company's relationships with its
employees, customers, distributors, vendors or other business
partners, and may result in a negative impact on the company's
business;
- strategic risks in the event the proposed transaction with
Oceanwide is not consummated including: the company's inability
to successfully execute alternative strategic plans to effectively
address its current business challenges (including with respect to
the restructuring of its U.S. life insurance businesses, debt
obligations, including our debt maturing in May 2018, cost savings, ratings and capital); the
company's ability to continue to sell long-term care insurance
policies; our inability to attract buyers for any businesses or
other assets it may seek to sell, or securities it may seek to
issue, in each case, in a timely manner and on anticipated terms;
failure to obtain any required regulatory, stockholder and/or
noteholder approvals or consents for such alternative strategic
plans, or the company's challenges changing or being more costly or
difficult to successfully address than currently anticipated or the
benefits achieved being less than anticipated; inability to achieve
anticipated cost-savings in a timely manner; adverse tax or
accounting charges; and inability to increase the capital needed in
the company's businesses in a timely manner and on anticipated
terms, including through improved business performance, reinsurance
or similar transactions, asset sales, securities offerings or
otherwise, in each case as and when required;
- risks relating to estimates, assumptions and valuations
including: risks related to the impact of the company's annual
review of assumptions and methodologies related to its margin
reviews in the fourth quarter of 2017, including risks that
additional information obtained in finalizing its margin review in
the fourth quarter of 2017 or other changes to assumptions or
methodologies materially affect the impact on margins; inadequate
reserves and the need to increase reserves (including as a result
of any changes the company may make to its assumptions,
methodologies or otherwise in connection with periodic or other
reviews); inaccurate models; deviations from the company's
estimates and actuarial assumptions or other reasons in its long
term care insurance, life insurance and/or annuity businesses;
accelerated amortization of deferred acquisition costs ("DAC") and
present value of future profits ("PVFP") (including as a result of
any changes the company may make to its assumptions, methodologies
or otherwise in connection with periodic or other reviews,
including reviews the company expects to carry out in the fourth
quarter of 2017); adverse impact on the company's financial results
as a result of projected profits followed by projected losses (as
is currently the case with its long term care insurance business);
adverse impact on the company's results of operations, including
its loss ratio as a result of its annual review of the premium
earnings pattern for its mortgage insurance business in
Australia (which the company
expects to carry out in the fourth quarter of 2017); and changes in
valuation of fixed maturity, equity and trading securities;
- risks relating to economic, market and political
conditions including: downturns and volatility in global
economies and equity and credit markets; interest rates and changes
in rates (particularly given the historically low interest rate
environment) have adversely impacted, and may continue to
materially adversely impact, the company's business and
profitability; deterioration in economic conditions or a decline in
home prices that adversely affect the company's loss experience in
mortgage insurance; political and economic instability or changes
in government policies; and fluctuations in foreign currency
exchange rates and international securities markets;
- regulatory and legal risks including: extensive
regulation of the company's businesses and changes in applicable
laws and regulations (including changes to tax laws and
regulations); litigation and regulatory investigations or other
actions; dependence on dividends and other distributions from the
company's subsidiaries (particularly its international
subsidiaries) and the inability of any subsidiaries to pay
dividends or make other distributions to the company, including as
a result of the performance of its subsidiaries and insurance,
regulatory or corporate law restrictions; adverse change in
regulatory requirements, including risk-based capital; changes in
regulations adversely affecting the company's international
operations; inability to maintain the private mortgage
insurer eligibility requirements (PMIERs); inability of the
company's U.S. mortgage insurance subsidiaries to meet minimum
statutory capital requirements and hazardous financial condition
standards; the influence of Federal National Mortgage Association
(Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac)
and a small number of large mortgage lenders on the U.S. mortgage
insurance market and adverse changes to the role or structure of
Fannie Mae and Freddie Mac; adverse changes in regulations
affecting the company's mortgage insurance businesses; inability to
continue to implement actions to mitigate the impact of statutory
reserve requirements; impact of additional regulations pursuant to
the Dodd-Frank Wall Street Reform and Consumer Protection Act; and
changes in accounting and reporting standards;
- liquidity, financial strength ratings, credit and
counterparty risks including: insufficient internal sources to
meet liquidity needs and limited or no access to capital (including
the company's ability to obtain financing under a credit
facility); future adverse rating agency actions, including with
respect to rating downgrades or potential downgrades or being put
on review for potential downgrade, all of which could have adverse
implications for the company, including with respect to key
business relationships, product offerings, business results of
operations, financial condition and capital needs, strategic plans,
collateral obligations and availability and terms of hedging,
reinsurance and borrowings; defaults by counterparties to
reinsurance arrangements or derivative instruments; defaults or
other events impacting the value of the company's fixed maturity
securities portfolio; and defaults on the company's commercial
mortgage loans or the mortgage loans underlying its investments in
commercial mortgage-backed securities and volatility in
performance;
- operational risks including: inability to retain,
attract and motivate qualified employees or senior management;
ineffective or inadequate risk management in identifying,
controlling or mitigating risks; reliance on, and loss of, key
customer or distribution relationships; availability, affordability
and adequacy of reinsurance to protect the company against losses;
competition; competition in the company's mortgage insurance
businesses from government and government-owned and
government-sponsored enterprises (GSEs) offering mortgage
insurance; the design and effectiveness of our disclosure controls
and procedures and internal control over financial reporting may
not prevent all errors, misstatements or misrepresentations; and
failure or any compromise of the security of the company's computer
systems, disaster recovery systems and business continuity plans
and failures to safeguard, or breaches of, its confidential
information;
- insurance and product-related risks including: the
company's inability to increase sufficiently, and in a timely
manner, premiums on in force long term care insurance policies
and/or reduce in force benefits, and charge higher premiums on new
policies, in each case, as currently anticipated and as may be
required from time to time in the future (including as a result of
the company's failure to obtain any necessary regulatory approvals
or unwillingness or inability of policyholders to pay increased
premiums), including to offset any impact on the company's margins
in connection with its margin reviews in the fourth quarter of
2017; the company's inability to reflect future premium increases
and other management actions in its margin calculation as
anticipated, including in connection with its margin reviews in the
fourth quarter of 2017; failure to sufficiently increase new sales
for the company's long term care insurance products; inability to
realize anticipated benefits of the company's rescissions,
curtailments, loan modifications or other similar programs in its
mortgage insurance businesses; premiums for the significant portion
of the company's mortgage insurance risk in force with high
loan-to-value ratios may not be sufficient to compensate the
company for the greater risks associated with those policies;
decreases in the volume of high loan-to-value mortgage originations
or increases in mortgage insurance cancellations; increases in the
use of alternatives to private mortgage insurance and reductions in
the level of coverage selected; potential liabilities in connection
with the company's U.S. contract underwriting services; and medical
advances, such as genetic research and diagnostic imaging, and
related legislation that impact policyholder behavior in ways
adverse to the company;
- other risks including: occurrence of natural or man-made
disasters or a pandemic; impairments of or valuation allowances
against the company's deferred tax assets; the possibility that in
certain circumstances the company will be obligated to make
payments to General Electric Company (GE) under the tax matters
agreement with GE even if its corresponding tax savings are never
realized and payments could be accelerated in the event of certain
changes in control; and provisions of the company's certificate of
incorporation and bylaws and the tax matters agreement with GE may
discourage takeover attempts and business combinations that
stockholders might consider in their best interests; and
- risks relating to the company's common stock including:
the continued suspension of payment of dividends; and stock price
fluctuations.
The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
Condensed
Consolidated Statements of Income (Loss)
|
(Amounts in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
|
September
30,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Revenues:
|
|
|
|
|
|
|
|
Premiums
|
|
$
|
1,135
|
|
$
|
1,108
|
|
Net investment
income
|
|
|
797
|
|
|
805
|
|
Net investment gains
(losses)
|
|
|
85
|
|
|
20
|
|
Policy fees and other
income
|
|
|
198
|
|
|
217
|
|
|
Total
revenues
|
|
|
2,215
|
|
|
2,150
|
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
Benefits and other
changes in policy reserves
|
|
|
1,344
|
|
|
1,662
|
|
Interest
credited
|
|
|
164
|
|
|
173
|
|
Acquisition and
operating expenses, net of deferrals
|
|
|
265
|
|
|
269
|
|
Amortization of
deferred acquisition costs and intangibles
|
|
|
83
|
|
|
94
|
|
Interest
expense
|
|
|
73
|
|
|
77
|
|
|
Total benefits and
expenses
|
|
|
1,929
|
|
|
2,275
|
|
Income (loss) from
continuing operations before income taxes
|
|
|
286
|
|
|
(125)
|
|
Provision for income
taxes
|
|
|
102
|
|
|
222
|
|
Income (loss) from
continuing operations
|
|
|
184
|
|
|
(347)
|
|
Income (loss) from
discontinued operations, net of taxes
|
|
|
(9)
|
|
|
15
|
|
Net income (loss)
|
|
|
175
|
|
|
(332)
|
|
Less: net income
attributable to noncontrolling interests
|
|
|
68
|
|
|
48
|
|
Net income (loss)
available to Genworth Financial, Inc.'s common
stockholders
|
|
$
|
107
|
|
$
|
(380)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations available to Genworth Financial, Inc.'s
|
|
|
|
|
|
|
|
|
common stockholders
per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.23
|
|
$
|
(0.79)
|
|
|
|
Diluted
|
|
$
|
0.23
|
|
$
|
(0.79)
|
|
Net income (loss)
available to Genworth Financial, Inc.'s common
stockholders
|
|
|
|
|
|
|
|
|
per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.21
|
|
$
|
(0.76)
|
|
|
|
Diluted
|
|
$
|
0.21
|
|
$
|
(0.76)
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
499.1
|
|
|
498.3
|
|
|
|
Diluted4
|
|
|
501.6
|
|
|
498.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income (Loss) to Adjusted Operating Income
(Loss)
|
(Amounts in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
Three
|
|
|
|
|
|
months
ended
|
|
months
ended
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
Net income (loss)
available to Genworth Financial, Inc.'s common
stockholders
|
|
$
|
107
|
|
$
|
(380)
|
|
$
|
202
|
Add: net income
attributable to noncontrolling interests
|
|
|
68
|
|
|
48
|
|
|
69
|
Net income
(loss)
|
|
|
175
|
|
|
(332)
|
|
|
271
|
Income (loss) from
discontinued operations, net of taxes
|
|
|
(9)
|
|
|
15
|
|
|
—
|
Income (loss) from
continuing operations
|
|
|
184
|
|
|
(347)
|
|
|
271
|
Less: income from
continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
|
noncontrolling
interests
|
|
|
68
|
|
|
48
|
|
|
69
|
Income (loss) from
continuing operations available to Genworth Financial,
Inc.'s
|
|
|
|
|
|
|
|
|
|
|
common
stockholders
|
|
|
116
|
|
|
(395)
|
|
|
202
|
Adjustments to income
(loss) from continuing operations available to
Genworth
|
|
|
|
|
|
|
|
|
|
|
Financial, Inc.'s
common stockholders:
|
|
|
|
|
|
|
|
|
|
Net investment
(gains) losses, net
|
|
|
(62)
|
|
|
(18)
|
|
|
(79)
|
Expenses related to
restructuring
|
|
|
1
|
|
|
2
|
|
|
—
|
Taxes on
adjustments
|
|
|
21
|
|
|
6
|
|
|
28
|
Adjusted operating
income (loss)
|
|
$
|
76
|
|
$
|
(405)
|
|
$
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss):
|
|
|
|
|
|
|
|
|
|
U.S. Mortgage
Insurance segment
|
|
$
|
73
|
|
$
|
67
|
|
$
|
91
|
Canada Mortgage
Insurance segment
|
|
|
37
|
|
|
36
|
|
|
41
|
Australia Mortgage
Insurance segment
|
|
|
12
|
|
|
14
|
|
|
12
|
U.S. Life Insurance
segment:
|
|
|
|
|
|
|
|
|
|
|
Long Term Care
Insurance
|
|
|
(5)
|
|
|
(270)
|
|
|
33
|
|
Life
Insurance
|
|
|
(9)
|
|
|
48
|
|
|
(1)
|
|
Fixed
Annuities
|
|
|
13
|
|
|
15
|
|
|
7
|
|
Total U.S. Life
Insurance segment
|
|
|
(1)
|
|
|
(207)
|
|
|
39
|
Runoff
segment
|
|
|
13
|
|
|
12
|
|
|
11
|
Corporate and
Other
|
|
|
(58)
|
|
|
(327)
|
|
|
(43)
|
Adjusted operating
income (loss)
|
|
$
|
76
|
|
$
|
(405)
|
|
$
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to Genworth Financial, Inc.'s common stockholders
|
|
|
|
|
|
|
|
|
|
|
per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.21
|
|
$
|
(0.76)
|
|
$
|
0.40
|
|
|
Diluted
|
|
$
|
0.21
|
|
$
|
(0.76)
|
|
$
|
0.40
|
Adjusted operating
income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.15
|
|
$
|
(0.81)
|
|
$
|
0.30
|
|
|
Diluted
|
|
$
|
0.15
|
|
$
|
(0.81)
|
|
$
|
0.30
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
499.1
|
|
|
498.3
|
|
|
499.0
|
|
|
Diluted4
|
|
|
501.6
|
|
|
498.3
|
|
|
501.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
(Amounts in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
Assets
|
|
|
|
|
|
Cash, cash
equivalents and invested assets
|
|
$
|
76,579
|
|
$
|
75,012
|
|
Deferred acquisition
costs
|
|
|
2,342
|
|
|
3,571
|
|
Intangible assets and
goodwill
|
|
|
315
|
|
|
348
|
|
Reinsurance
recoverable
|
|
|
17,553
|
|
|
17,755
|
|
Deferred tax and
other assets
|
|
|
576
|
|
|
673
|
|
Separate account
assets
|
|
|
7,264
|
|
|
7,299
|
|
|
|
|
Total
assets
|
|
$
|
104,629
|
|
$
|
104,658
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Future policy
benefits
|
|
$
|
38,022
|
|
$
|
37,063
|
|
|
Policyholder account
balances
|
|
|
24,531
|
|
|
25,662
|
|
|
Liability for policy
and contract claims
|
|
|
9,384
|
|
|
9,256
|
|
|
Unearned
premiums
|
|
|
3,512
|
|
|
3,378
|
|
|
Deferred tax and
other liabilities
|
|
|
2,236
|
|
|
2,969
|
|
|
Borrowings related to
securitization entities
|
|
|
59
|
|
|
74
|
|
|
Non-recourse funding
obligations
|
|
|
310
|
|
|
310
|
|
|
Long-term
borrowings
|
|
|
4,224
|
|
|
4,180
|
|
|
Separate account
liabilities
|
|
|
7,264
|
|
|
7,299
|
|
|
|
|
Total
liabilities
|
|
|
89,542
|
|
|
90,191
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
1
|
|
|
1
|
|
|
Additional paid-in
capital
|
|
|
11,973
|
|
|
11,962
|
|
|
Accumulated other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
Net unrealized
investment gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains
(losses) on securities not other-than-temporarily
impaired
|
|
|
1,098
|
|
|
1,253
|
|
|
|
|
|
Net unrealized gains
(losses) on other-than-temporarily impaired securities
|
|
|
10
|
|
|
9
|
|
|
|
|
Net unrealized
investment gains (losses)
|
|
|
1,108
|
|
|
1,262
|
|
|
|
|
Derivatives
qualifying as hedges
|
|
|
2,052
|
|
|
2,085
|
|
|
|
|
Foreign currency
translation and other adjustments
|
|
|
(125)
|
|
|
(253)
|
|
|
Total accumulated
other comprehensive income (loss)
|
|
|
3,035
|
|
|
3,094
|
|
|
Retained
earnings
|
|
|
760
|
|
|
287
|
|
|
Treasury stock, at
cost
|
|
|
(2,700)
|
|
|
(2,700)
|
|
|
|
|
Total Genworth
Financial, Inc.'s stockholders' equity
|
|
|
13,069
|
|
|
12,644
|
|
|
Noncontrolling
interests
|
|
|
2,018
|
|
|
1,823
|
|
|
|
|
Total
equity
|
|
|
15,087
|
|
|
14,467
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
104,629
|
|
$
|
104,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of Foreign
Exchange on Flow New Insurance Written10
Three months ended
September 30, 2017
|
|
|
Percentages
|
|
|
Percentages
|
|
|
|
Including
Foreign
|
|
|
Excluding
Foreign
|
|
|
|
Exchange
|
|
|
Exchange11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada Mortgage
Insurance (MI):
|
|
|
|
|
|
|
Flow new insurance
written
|
|
(17)
|
%
|
|
(17)
|
%
|
Flow new insurance
written (3Q17 vs. 2Q17)
|
|
19
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
Australia
MI:
|
|
|
|
|
|
|
Flow new insurance
written
|
|
(20)
|
%
|
|
(24)
|
%
|
Flow new insurance
written (3Q17 vs. 2Q17)
|
|
(10)
|
%
|
|
(12)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Core Yield to Reported Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
|
|
|
|
months
ended
|
|
|
|
|
|
|
September
30,
|
|
(Assets - amounts
in billions)
|
|
2017
|
|
Reported Total
Invested Assets and Cash
|
|
$
|
75.9
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Securities
lending
|
|
|
0.2
|
|
|
|
Unrealized gains
(losses)
|
|
|
5.1
|
|
|
Adjusted end of
period invested assets
|
|
$
|
70.6
|
|
|
|
|
|
|
|
|
|
|
|
Average Invested
Assets Used in Reported Yield Calculation
|
|
$
|
70.5
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Restricted commercial
mortgage loans and other invested assets related to
|
|
|
|
|
|
|
|
securitization
entities12
|
|
|
0.1
|
|
|
Average Invested
Assets Used in Core Yield Calculation
|
|
$
|
70.4
|
|
|
|
|
|
|
|
|
|
|
|
(Income - amounts
in
millions)
|
|
|
|
|
|
Reported Net
Investment Income
|
|
$
|
797
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Bond calls and
commercial mortgage loan prepayments
|
|
|
10
|
|
|
|
Other non-core
items13
|
|
|
3
|
|
|
|
Restricted commercial
mortgage loans and other invested assets related to
|
|
|
|
|
|
|
|
securitization
entities12
|
|
|
1
|
|
|
Core Net Investment
Income
|
|
$
|
783
|
|
|
|
|
|
|
|
|
|
|
|
Reported
Yield
|
|
|
4.52
|
%
|
|
Core Yield
|
|
|
4.45
|
%
|
|
___________________________
1 Private Mortgage Insurer Eligibility
Requirements
2 Unless otherwise stated, all references in this
press release to net income (loss), net income (loss) per share,
adjusted operating income (loss), adjusted operating income (loss)
per share and book value 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, adjusted operating income (loss) available to
Genworth's common stockholders per diluted share and book value
available to Genworth's common stockholders per share,
respectively.
3 This is a financial measure that is not calculated
based on U.S. Generally Accepted Accounting Principles
(Non-GAAP). See the Use of Non-GAAP Measures section of this
press release for additional information.
4 Under applicable accounting guidance, companies in a
loss position are required to use basic weighted-average common
shares outstanding in the calculation of diluted loss per share.
Therefore, as a result of the loss from continuing operations, the
company was required to use basic weighted-average common shares
outstanding in the calculation of diluted loss per share as the
inclusion of shares for stock options, restricted stock units and
stock appreciation rights of 2.2 million for the three months ended
September 30, 2016 would have been
antidilutive to the calculation. If the company had not incurred a
loss from continuing operations in this period, dilutive potential
weighted-average common shares outstanding would have been 500.5
million for the three months ended September
30, 2016.
5 Percent change excludes the impact of foreign
exchange.
6 Company estimate for the third quarter of 2017, due to
timing of the filing of statutory statements; The MCT Ratio for
Canada MI in the third and second quarters of 2017 reflects the new
regulatory framework effective January
1, 2017. The Consolidated RBC Ratio for the U.S. life
insurance companies in the third quarter of 2016 is restated to
reflect the merger of Brookfield Life And Annuity Insurance Company
Limited with and into Genworth Life Insurance Company as if the
merger occurred January 1, 2015.
7 Calculated as available assets divided by required
assets as defined within PMIERs. As of September 30, 2017, June
30, 2017 and September 30,
2016, the PMIERs sufficiency ratios were in excess of
approximately $500 million,
$500 million and $400 million, respectively, of available assets
above the PMIERs requirements. Company estimate for the third
quarter of 2017.
8 Holding company cash and liquid assets comprises
assets held in Genworth Holdings, Inc. (the issuer of outstanding
public debt) which is a wholly-owned subsidiary of Genworth
Financial, Inc.
9 Comprises cash and cash equivalents of $754 million, $758
million and $1,065 million,
respectively, and U.S. government bonds of $75 million, $100
million and $100 million,
respectively, as of September 30,
2017, June 30, 2017 and
September 30, 2016.
10 All percentages are comparing the third quarter of
2017 to the third quarter of 2016 unless otherwise stated.
11 The impact of foreign exchange was calculated using
the comparable prior period exchange rates.
12 Represents the incremental assets and investment
income related to restricted commercial mortgage loans and other
invested assets.
13 Includes cost basis adjustments on structured
securities and various other immaterial items.
View original
content:http://www.prnewswire.com/news-releases/genworth-financial-announces-third-quarter-2017-results-300548460.html
SOURCE Genworth Financial, Inc.