RICHMOND, Va., April 29, 2021 /PRNewswire/ --
First Quarter Net Income Of $187
Million And Adjusted Operating Income Of $168 Million
- Executing On The Company's Strategic Plan Following The
Termination Of The Merger Agreement With China Oceanwide Holdings
Group Co., Ltd (Oceanwide)
-
- Completed Sale Of Genworth's Interest In Genworth Mortgage
Insurance Australia Limited (Genworth Australia) During The
Quarter, Resulting In Net Proceeds Of $123
Million After $247 Million
Payment To AXA S.A. (AXA) Under The Outstanding Promissory
Note
- Continued Progress On Planned Partial Initial Public Offering
(IPO) Of U.S. Mortgage Insurance (MI) Business
- U.S. MI Adjusted Operating Income Of $126 Million, 33 Percent Above Prior Quarter
-
- New Delinquencies Continued To Decline, Down 16 Percent From
The Prior Quarter
- U.S. MI's PMIERs1 Sufficiency Ratio Estimated At 159
Percent, $1,764 Million Above
Published Requirements
- U.S. Life Insurance Segment Adjusted Operating Income Of
$62 Million Driven By LTC2
Results Benefitting From High Claim Terminations In The
Quarter
- Continued Progress Toward LTC Multi-Year Rate Action Plan
(MYRAP) With $157 Million Incremental
Annual Rate Increases Approved In First Quarter, With An Estimated
Net Present Value Of Approximately $0.7
Billion
- Holding Company Cash And Liquid Assets Of $757 Million, Including $60 Million Restricted, With $729 Million Holding Company Debt Retired During
The Quarter, Including Partial Prepayment Of AXA Promissory
Note
Genworth Financial, Inc. (NYSE: GNW) today reported results for
the quarter ended March 31, 2021. The company reported net
income3 of $187 million, or $0.37 per diluted share, in the first quarter of
2021, compared with a net loss of $66 million, or $0.13 per diluted share, in the first quarter of
2020. The company reported adjusted operating
income4 of $168 million, or $0.33 per diluted share, in the first quarter of
2021, compared with adjusted operating income of $20 million,
or $0.04 per diluted share, in the
first quarter of 2020.
Following the sale of Genworth Australia, Australia MI segment
results are reported as discontinued operations, and all prior
periods have been re-presented accordingly.
Strategic Update
Since the beginning of the year, Genworth has continued to make
significant progress on its strategic plan to create long-term
shareholder value. Steps taken during the current quarter included
the successful sale of the company's ownership position in Genworth
Australia, as well as actions to better align Genworth's expense
structure with current business activities. The company paid its
February 2021 debt maturity,
repurchased $146 million of its
September 2021 maturities and
partially pre-paid the promissory note issued in connection with
the settlement with AXA.
During the current quarter, the company made continued progress
on preparations for a planned offering of a portion of Genworth's
interest in the U.S. MI business. However, because the company is
in registration and subject to applicable publicity restrictions,
Genworth is unable to comment further or provide any additional
detail at this time.
In April 2021, the company
announced the termination of its merger agreement with Oceanwide.
The Board of Directors determined that Oceanwide would not be able
to close the transaction within a reasonable timeframe and
terminated the agreement to allow Genworth to pursue its strategic
plan without restrictions and without uncertainty regarding its
ultimate ownership. Both Genworth and Oceanwide continue to believe
that there are significant, compelling opportunities to address
critical societal needs outside of the U.S. by bringing long term
care solutions to the aging population in China.
"I am pleased with the company's strong first quarter
performance as well as our progress on our strategic plan," said
Tom McInerney, Genworth President
and CEO. "We have remained nimble and taken decisive actions to
ensure Genworth is well positioned to create value for our
stakeholders into the future. Given our current holding company
cash position, the actions we've already taken with our strategic
plan, capital raising efforts and our expected cash flow profile, I
am confident in Genworth's ability to meet the debt obligations
over the next several years. We have the right strategy in place
and the right team to lead our execution of this strategy, along
with guidance from our new independent directors Jill R. Goodman, Howard
D. Mills, III and Ramsey D.
Smith, whom we are delighted to welcome to our Board of
Directors."
Financial Performance
Consolidated Net
Income (Loss) & Adjusted Operating Income
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Three months ended
March 31
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2021
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2020
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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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187
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$
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0.37
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$
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(66)
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$
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(0.13)
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NM 5
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Adjusted operating
income
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$
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168
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$
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0.33
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$
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20
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$
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0.04
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NM
5
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Weighted-average
diluted shares6
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513.8
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504.3
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As of March
31
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2021
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2020
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Book value per
share
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$
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29.14
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$
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28.61
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Book value per share,
excluding accumulated other comprehensive
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income
(loss)
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$
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21.88
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$
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21.05
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Net investment gains, net of taxes and other adjustments,
increased net income by $26 million
in the quarter. The investment gains were driven by mark-to-market
gains on limited partnerships in the LTC business and net gains on
derivatives. The net loss of $66
million in the first quarter of 2020 included $70 million from investment losses, net of taxes
and other adjustments.
Net investment income was $801
million in the quarter, compared to $846 million in the prior quarter and
$782 million in the prior year. Net
investment income was lower than the prior quarter as a result of
lower income from bond calls, commercial mortgage loan prepayments
and limited partnerships, primarily in the LTC business. Net
investment income increased versus the prior year as a result of
higher limited partnership income. The reported yield and the core
yield4 for the quarter were 4.84 percent and 4.73
percent, respectively, compared to 5.07 percent and 4.80 percent,
respectively, in the prior quarter.
Genworth's effective tax rate on income from continuing
operations for the quarter was approximately 25 percent. The
effective tax rate was increased by the tax effect of forward
starting swap gains settled prior to the change in the corporate
tax rate under the 2017 Tax Cuts and Jobs Act, which continue to be
tax effected at 35 percent as they are amortized into net
investment income.
Adjusted operating income (loss) results by business line are
summarized in the table below:
Adjusted Operating
Income (Loss)
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(Amounts in
millions)
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Q1
21
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Q4
20
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Q1
20
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U.S. Mortgage
Insurance
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$
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126
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$
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95
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$
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148
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U.S. Life
Insurance
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62
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129
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(70)
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Runoff
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12
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13
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(13)
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Corporate and
Other
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(32)
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(49)
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(45)
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Total Adjusted
Operating Income
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$
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168
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$
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188
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$
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20
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Adjusted operating income (loss) represents income (loss) from
continuing operations excluding the after-tax effects of income
(loss) from continuing operations attributable to noncontrolling
interests, 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 is
included 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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Q1
21
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Q4
20
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Q1
20
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Adjusted operating
income
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$
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126
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$
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95
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$
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148
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Primary new insurance
written
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$
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24,900
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$
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27,000
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$
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17,900
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Loss ratio
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22 %
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35 %
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8 %
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U.S. MI reported adjusted operating income of $126 million,
compared with $95 million in the
prior quarter and $148 million in the
prior year. U.S. MI's primary insurance in force increased 12
percent versus the prior year from strong new insurance written
(NIW), partially offset by lower persistency. Primary NIW decreased
eight percent from the prior quarter due to a seasonal decline in
purchase mortgage originations and was up 39 percent versus the
prior year primarily from higher mortgage originations and a larger
private mortgage insurance market, partially offset by lower
estimated market share. Earned premiums in the quarter were
slightly higher than the prior quarter as insurance in force growth
was largely offset by decreased single premium policy
cancellations. Current quarter earned premiums increased versus the
prior year mainly from higher insurance in force and from increased
single premium policy cancellations driven by lower persistency
from elevated mortgage refinancing, partially offset by higher
ceded premiums from reinsurance transactions and lower average
premium rates.
U.S. MI's current quarter results reflected losses of
$55 million and a loss ratio of 22
percent, which were driven by $44
million of losses from new delinquencies and $10 million pre-tax reserve strengthening on
pre-COVID-19 delinquencies. New delinquencies decreased by 16
percent from 11,923 in the prior quarter to 10,053. Approximately
54 percent of new primary delinquencies in the current quarter were
reported in forbearance plans which may cure at elevated rates
relative to historical performance. The reserve strengthening in
the current quarter primarily reflects the company's expectation
that pre-COVID-19 delinquencies will have a modestly higher claim
rate than the company's prior best estimate given the slower
emergence of cures. Results in the prior quarter and prior year
reflected losses of $89 million and
$19 million, and a loss ratio of 35
percent and eight percent, respectively. The sequential decrease in
losses was driven mainly by the $37
million pre-tax reserve strengthening on forbearance
delinquencies in the prior quarter and by lower losses from new
delinquencies. Current quarter losses increased versus the prior
year driven primarily by higher losses from new delinquencies, the
current quarter reserve strengthening and lower net benefits from
cures and aging of existing delinquencies.
U.S. Life Insurance
Adjusted Operating
Income (Loss)
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(Amounts in
millions)
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Q1
21
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Q4
20
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Q1
20
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Long Term Care
Insurance
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$
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95
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$
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129
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$
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1
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Life
Insurance
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(63)
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(20)
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(77)
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Fixed
Annuities
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30
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20
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6
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Total U.S. Life
Insurance
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$
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62
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$
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129
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$
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(70)
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Long Term Care Insurance
Long term care insurance reported adjusted operating income of
$95 million, compared with $129 million in the prior
quarter and $1 million in the prior year. Claim terminations
in the current quarter were higher compared to the prior quarter
and prior year. Although it is not the company's current practice
to track cause of death for LTC policyholders and claimants, the
elevated terminations impacting the current and prior quarter were
likely the result of the COVID-19 pandemic. Net investment income
increased versus the prior year, driven primarily by a $23 million after-tax increase in income from
limited partnerships, and decreased versus the prior quarter driven
primarily by a $15 million after-tax
decrease in income from bond calls and commercial mortgage loan
prepayments. New claim incidence remained low in the current
quarter, which drove continued favorable development on incurred
but not reported (IBNR) claim reserves. Since the recent decrease
in incidence is assumed to be driven by the COVID-19 pandemic and
temporary in nature, IBNR claim reserves were strengthened by an
additional $23 million after-tax in
the current quarter compared to $37
million after-tax in the prior quarter. The company also
assumed that the COVID-19 pandemic has accelerated its mortality
experience on the most vulnerable claimants, leaving its overall
claim population less likely to terminate compared to the
pre-pandemic average population, and therefore strengthened its
claim reserves by $53 million
after-tax in the current quarter compared to $72 million after-tax in the prior quarter.
Earnings continued to benefit from in force rate actions, which
were higher than the prior quarter and prior year. Prior quarter
earnings also included a net benefit of $13
million after-tax from the completion of the annual review
of LTC assumptions and methodologies.
Life Insurance
Life insurance reported an adjusted operating loss of
$63 million, compared with adjusted operating losses of
$20 million in the prior quarter and
$77 million in the prior year. Mortality was significantly
higher compared to the prior quarter and prior year, attributable
in part to the COVID-19 pandemic. Current quarter results reflected
lower deferred acquisition costs (DAC) amortization compared to the
prior quarter and prior year, as the large 20-year level-premium
term life insurance block written at the end of 2000 entered its
post-level premium period following the 60-day grace period.
Results also reflected lower reserve increases during the premium
grace period in the 10-year term universal life insurance block
associated with policies entering the post-level premium period
compared to the prior quarter and prior year. During the quarter,
the company recorded a $17 million
after-tax charge related to DAC recoverability testing in its
universal life insurance products. During the prior quarter, the
company completed its annual review of life insurance assumptions
and recorded a benefit of $10 million
after-tax, which included a net $60
million benefit from assumption changes primarily related to
its term universal life insurance products, partially offset by a
$50 million charge from annual DAC
recoverability testing in its universal life insurance
products.
Fixed Annuities
Fixed annuities reported adjusted operating income of
$30 million, compared with $20 million in the prior
quarter and $6 million in the prior year. Results versus the
prior quarter and prior year reflected higher mortality in the
single premium immediate annuity product and favorable impacts from
improved equity markets and interest rates.
Runoff
Runoff reported adjusted operating income of $12 million,
compared with adjusted operating income of $13 million in the
prior quarter and an adjusted operating loss of $13 million in
the prior year. Results in the current quarter reflected a benefit
to the company's variable annuity products from equity market and
interest rate performance that was less favorable compared to the
prior quarter and favorable compared to the prior year. Results in
the prior quarter included a $5
million after-tax charge for the company's variable annuity
products from annual assumption updates.
Corporate And Other
Corporate and Other reported an adjusted operating loss of
$32 million, compared with adjusted operating losses of
$49 million in the prior quarter and $45 million in the
prior year. Results in the current quarter reflected lower
corporate operating expenses and lower interest expense compared to
both the prior quarter and prior year.
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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Q1
21
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Q4
20
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Q1
20
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U.S. MI
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Consolidated
Risk-To-Capital Ratio7
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11.7:1
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12.1:1
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12.2:1
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Genworth Mortgage
Insurance Corporation Risk-To-Capital Ratio7
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11.9:1
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12.3:1
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12.4:1
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Private Mortgage
Insurer Eligibility Requirements (PMIERs) Sufficiency Ratio7,
8
|
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159
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%
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137
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%
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142
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%
|
U.S. Life Insurance
Companies
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Consolidated
Risk-Based Capital (RBC) Ratio7
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255
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%
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229
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%
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|
|
194
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%
|
Holding Company Cash
and Liquid Assets9, 10
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$
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757
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$
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1,103
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$
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575
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|
Key Points
- U.S. MI's PMIERs sufficiency ratio is estimated to be 159
percent, $1,764 million above
published PMIERs requirements11. The PMIERs sufficiency
ratio was up 22 points, or $535
million, sequentially, driven in part by the completion of
an insurance linked notes (ILN) transaction, which added
$495 million of additional PMIERs
capital credit as of March 31, 2021,
elevated lapse from prevailing low interest rates in the current
quarter and business cash flows, partially offset by elevated
NIW. Additionally, elevated lapse continued to drive an
acceleration of the amortization on existing reinsurance
transactions, which caused a reduction in PMIERs capital credit on
prior reinsurance transactions in the current quarter;
- Both the current quarter and prior quarter PMIERs sufficiency
benefited from a 0.30 multiplier applied to the risk based required
asset factor for certain non-performing loans, which resulted in a
reduction of the published PMIERs required assets by an estimated
$1,012 million at the end of the
current quarter, compared to $1,046
million at the end of the prior quarter. These amounts are
gross of incremental reinsurance benefits from the elimination of
the 0.30 multiplier;
- On April 16, 2021, U.S. MI
completed an ILN transaction, which will add $303 million of additional PMIERs capital credit
in the second quarter of 2021. Had the recently completed
transaction occurred in the first quarter of 2021, U.S. MI's
current quarter PMIERs sufficiency would have been estimated at 176
percent or $2,067 million above the
published PMIERs requirements;
- Genworth Mortgage Holdings, Inc.12 held $284 million of cash as of March 31, 2021, down $16
million from the prior quarter primarily from its
semi-annual interest payment on its debt;
- U.S. life insurance companies' consolidated statutory
risk-based capital is estimated to be 255 percent, up from the
prior quarter primarily from favorable impacts of elevated
terminations in the LTC business; and
- The holding company ended the quarter with $757 million of cash and liquid assets, including
$60 million that is restricted. The company has $513 million of outstanding principal due in
September 2021, as of the date
hereof. During the current quarter, Genworth retired its
February 2021 debt of $338 million and repurchased $146 million of its September 2021 maturities. In addition, with the
completion of the sale of Genworth Australia and $370 million in proceeds, the company prepaid AXA
$245 million of principal and
$2 million of accrued interest
related to the outstanding promissory note which was secured by
shares of Genworth Australia.
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.
Conference Call And Financial Supplement Information
This press release and the first quarter 2021 financial
supplement are now posted on the company's website. Additional
information regarding business results will be posted on the
company's website, http://investor.genworth.com, by 8:00 a.m. on April 30,
2021. Investors are encouraged to review these
materials.
Genworth will conduct a conference call on April 30, 2021 at 9:00
a.m. (ET) to discuss the quarter's results. Genworth's
conference call will be accessible via telephone and the Internet.
The dial-in number for Genworth's April
30th conference call is 888 208.1820 or 323
794.2110 (outside the U.S.); conference ID # 8911906. To
participate in the call by webcast, register at
http://investor.genworth.com at least 15 minutes prior to the
webcast to download and install any necessary software.
A replay of the call will be available at 888 203.1112 or 719
457.0820 (outside the U.S.); conference ID # 8911906 through
May 15, 2021. The webcast will also
be archived on the company's website for one year.
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 (loss) from continuing operations attributable to
noncontrolling interests, 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 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 estimated
future credit losses, 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.
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 Financial, Inc.'s common
stockholders in accordance with U.S. 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 Financial, Inc.'s common
stockholders or net income (loss) available to Genworth Financial,
Inc.'s common stockholders per share on a basic and diluted basis
determined in accordance with U.S. 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) available to Genworth
Financial, Inc.'s common stockholders to adjusted operating income
(loss) assume a 21 percent tax rate. Net investment gains (losses)
are also adjusted for DAC and other intangible amortization and
certain benefit reserves.
The company repurchased $146
million and $14 million
principal amount of Genworth Holdings, Inc.'s (Genworth Holdings)
senior notes with 2021 maturity dates for a pre-tax gain (loss) of
$(4) million and $1 million in the first quarters of 2021 and
2020, respectively. In January 2020,
the company paid a pre-tax make-whole expense of $9 million related to the early redemption of
Genworth Holdings' senior notes originally scheduled to mature in
June 2020 and Rivermont Life
Insurance Company I, the company's indirect wholly-owned special
purpose consolidated captive insurance subsidiary, early redeemed
all of its $315 million outstanding
non-recourse funding obligations originally due in 2050 resulting
in a pre-tax loss of $4 million from
the write-off of deferred borrowing costs. These transactions were
excluded from adjusted operating income as they relate to gains
(losses) on the early extinguishment of debt.
The company recorded a pre-tax expense of $21 million in the first quarter of 2021 and
$1 million in each of the fourth and
first quarters of 2020 related to restructuring costs as it
continues to evaluate and appropriately size its organizational
needs and expenses. There were no infrequent or unusual items
excluded from adjusted operating income during the periods
presented.
The tables at the end of this press release provide a
reconciliation of net income (loss) available to Genworth
Financial, Inc.'s common stockholders to adjusted operating income
for the three months ended March 31,
2021 and 2020, as well as for the three months ended
December 31, 2020, 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 U.S. GAAP. In addition, the company's definition of
core yield may differ from the definitions used by other companies.
A reconciliation of reported U.S. GAAP yield to core yield is
included in a table at the end of this press release.
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 difference
between the consolidated provision for income taxes and the sum of
the provision for income taxes in each segment is reflected in
Corporate and Other activities.
The annually-determined tax rates and adjustments to each
segment's provision for income taxes are estimates which are
subject to review and could change from year to year.
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 business generated in a period. Sales
refer to new insurance written for mortgage insurance products. The
company considers new insurance written to be a measure of the
company's operating performance because it represents a measure of
new sales of insurance policies during a specified period, rather
than a measure of the company's revenues or profitability during
that period.
Management regularly monitors and reports insurance in force and
risk in force for the company's U.S. mortgage insurance business.
Insurance in force is a measure of the aggregate unpaid principal
balance as of the respective reporting date for loans the company
insures. Risk in force is based on the coverage percentage applied
to the estimated current outstanding loan balance. The company
considers insurance in force and risk in force to be measures of
its operating performance because they represent measures of the
size of its business at a specific date which will generate
revenues and profits in a future period, rather than measures of
its revenues or profitability during that period.
Management also regularly monitors and reports a loss ratio for
the company's businesses. For the U.S. mortgage insurance business,
the loss ratio is the ratio of benefits and other changes in policy
reserves 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.
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 the
company makes relating to transactions it is pursuing to address
its near-term liabilities and financial obligations, which may
include additional debt financing and/or a transaction to sell a
percentage of its ownership interests in its U.S. mortgage
insurance business, as well as statements the company makes
regarding the potential impacts of the COVID-19 pandemic.
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:
- the company may be unable to successfully execute strategic
plans to effectively address its current business challenges
including: the company's inability to successfully execute on any
of its strategic plans to effectively address its current business
challenges (including addressing its debt maturities and other
near-term liabilities and financial obligations, reducing costs,
stabilizing its U.S. life insurance businesses without additional
capital contributions, and improving overall capital and ratings);
the risk that the impacts of or uncertainty created by the COVID-19
pandemic delay or hinder alternative transactions or otherwise make
alternative transactions less attractive; the ability to pursue
alternative strategic transactions; the company's inability to
attract buyers for any businesses or other assets it may seek to
sell, or securities it may seek to issue (including a planned
partial sale through an initial public offering of its U.S.
mortgage insurance business) in each case, in a timely manner and
on anticipated terms; an 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, debt issuances, securities
offerings or otherwise, in each case as and when required; a
failure to obtain any required regulatory, stockholder, noteholder
approvals and/or other third-party approvals or consents for such
alternative strategic transactions; 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; an inability to achieve anticipated cost-savings in a
timely manner; and adverse tax or accounting charges;
- risks related to the termination of the Oceanwide
transaction including: the risk that the company's decision to
terminate the merger agreement with China Oceanwide Holdings Group
Co., Ltd (together with its affiliates, "Oceanwide") may adversely
affect the company's business and the price of its common stock;
greater difficulty in executing alternative transactions to
effectively address its near-term liabilities and financial
obligations, including the risks that it will be unable to raise
additional debt financing and/or sell a percentage of its ownership
interest in its U.S. mortgage insurance business to repay/refinance
future debt maturities and the promissory note to AXA; potential
legal proceedings may be instituted against the company in
connection with the termination of the Oceanwide transaction;
potential adverse reactions or changes to the company's business
relationships with clients, employees, suppliers or other parties
or other business uncertainties resulting from the termination of
the Oceanwide transaction, including but not limited to such
changes that could affect the company's financial performance; the
possibility that the company may be unable to pursue potential
future opportunities with Oceanwide to offer insurance products in
China; continued availability of
capital and financing to the company under acceptable terms;
further rating agency actions and downgrades in the company's
credit or financial strength ratings; the inability to reduce costs
due to the termination of the Oceanwide transaction, including in
connection with any proposed resource alignment; and the company's
ability to attract, recruit, retain and motivate current and
prospective employees may be adversely affected due to the
termination of the Oceanwide transaction;
- risks relating to estimates, assumptions and valuations
including: inadequate reserves and the need to increase reserves
(including as a result of any changes the company may make in the
future to its assumptions, methodologies or otherwise in connection
with periodic or other reviews); risks related to the impact of the
company's annual review of assumptions and methodologies related to
its long term care insurance claim reserves and margin reviews,
including risks that additional information obtained in the future
or other changes to assumptions or methodologies materially affect
margins; the inability to accurately estimate the impacts of the
COVID-19 pandemic; 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 future changes it may make to its assumptions, methodologies or
otherwise in connection with periodic or other reviews); 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); and changes in valuation of
fixed maturity and equity securities;
- liquidity, financial strength ratings, credit and
counterparty risks including: insufficient internal sources to
meet liquidity needs and limited or no access to capital; an
inability to obtain further financing, either by raising capital
through issuing additional debt or equity and/or selling a
percentage of the company's ownership interest in its U.S. mortgage
insurance business, including a planned partial initial public
offering of the company's U.S. mortgage insurance business and/or
the issuance of debt, convertible or equity-linked securities,
prior to the company's future debt maturities, or ability to obtain
a secured term loan or credit facility; the impact on holding
company liquidity caused by the inability to receive dividends or
other returns of capital from the company's U.S. mortgage insurance
business as a result of the COVID-19 pandemic; the impact of
increased leverage as a result of the AXA settlement and related
restrictions; continued availability of capital and financing;
future adverse rating agency actions against the company or its
U.S. mortgage insurance subsidiary, including with respect to
rating downgrades or potential downgrades or being put on review
for potential downgrade, all of which could have adverse
implications, 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;
defaults on the company's commercial mortgage loans; defaults on
mortgage loans or other assets underlying the company's investments
in its mortgage and asset-backed securities and volatility in
performance;
- 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
prolonged unemployment, a sustained low interest rate environment
and other displacements caused by the COVID-19 pandemic; interest
rates and changes in rates 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
the company's U.S. mortgage insurance business; 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 U.S. mortgage insurance
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, heightened
regulatory restrictions resulting from the COVID-19 pandemic, and
other insurance, regulatory or corporate law restrictions; the
inability to successfully seek in force rate action increases
(including increased premiums and associated benefit reductions) in
the company's long term care insurance business, including as a
result of the COVID-19 pandemic; adverse change in regulatory
requirements, including risk-based capital; inability to continue
to maintain PMIERs; risks on the company's U.S. mortgage insurance
subsidiary's ability to pay its holding company dividends as a
result of the GSEs' amendments to PMIERs in response to COVID-19;
the impact on capital levels of increased delinquencies caused by
the COVID-19 pandemic; inability of the company's U.S. mortgage
insurance subsidiaries to meet minimum statutory capital
requirements; 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 U.S. mortgage insurance
business; additional restrictions placed on the company's U.S.
mortgage insurance business by government and government-owned and
the GSEs in connection with a new debt financing and/or sale of a
percentage of its ownership interests therein; inability to
continue to implement actions to mitigate the impact of statutory
reserve requirements; changes in tax laws; and changes in
accounting and reporting standards;
- operational risks including: the inability to retain,
attract and motivate qualified employees or senior management; the
impact on processes caused by shelter-in-place or other
governmental restrictions imposed as a result of the COVID-19
pandemic; reliance on, and loss of, key customer or distribution
relationships; the design and effectiveness of the company's
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,
business continuity plans and failures to safeguard or breaches of
confidential information;
- insurance and product-related risks including: the
company's inability to increase premiums and reduce benefits
sufficiently, and in a timely manner, on its in force long term
care insurance policies, in each case, as currently anticipated and
as may be required from time to time in the future (including as a
result of a delay or failure to obtain any necessary regulatory
approvals, including as a result of the COVID-19 pandemic, or
unwillingness or inability of policyholders to pay increased
premiums and/or accept reduced benefits), including to offset any
negative impact on the company's long term care insurance margins;
availability, affordability and adequacy of reinsurance to protect
the company against losses; decreases in the volume of 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: the occurrence of natural or
man-made disasters or a pandemic, similar to the COVID-19 pandemic,
could materially adversely affect its financial condition and
results of operations.
The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise. This press release does not
constitute an offering of any securities.
Condensed
Consolidated Statements of Income
|
(Amounts in
millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three
months
|
|
|
|
|
|
Three months
ended
|
|
ended
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
2021
|
|
2020
|
|
2020
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Premiums
|
|
$
|
968
|
|
$
|
946
|
|
$
|
970
|
Net investment
income
|
|
|
801
|
|
|
782
|
|
|
846
|
Net investment gains
(losses)
|
|
|
33
|
|
|
(99)
|
|
|
147
|
Policy fees and other
income
|
|
|
183
|
|
|
180
|
|
|
191
|
|
|
Total
revenues
|
|
|
1,985
|
|
|
1,809
|
|
|
2,154
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
|
|
Benefits and other
changes in policy reserves
|
|
|
1,218
|
|
|
1,337
|
|
|
1,157
|
Interest
credited
|
|
|
131
|
|
|
141
|
|
|
132
|
Acquisition and
operating expenses, net of deferrals
|
|
|
275
|
|
|
237
|
|
|
253
|
Amortization of
deferred acquisition costs and intangibles
|
|
|
77
|
|
|
108
|
|
|
174
|
Interest
expense
|
|
|
51
|
|
|
51
|
|
|
55
|
|
|
Total benefits and
expenses
|
|
|
1,752
|
|
|
1,874
|
|
|
1,771
|
Income (loss) from
continuing operations before income taxes
|
|
|
233
|
|
|
(65)
|
|
|
383
|
Provision (benefit)
for income taxes
|
|
|
59
|
|
|
(5)
|
|
|
82
|
Income (loss) from
continuing operations
|
|
|
174
|
|
|
(60)
|
|
|
301
|
Income (loss) from
discontinued operations, net of taxes
|
|
|
21
|
|
|
(12)
|
|
|
(35)
|
Net income
(loss)
|
|
|
195
|
|
|
(72)
|
|
|
266
|
Less: net income
(loss) from continuing operations attributable to
noncontrolling
|
|
|
|
|
|
|
|
|
|
|
interests
|
|
|
—
|
|
|
—
|
|
|
—
|
Less: net income
(loss) from discontinued operations attributable to
noncontrolling
|
|
|
|
|
|
|
|
|
|
|
interests
|
|
|
8
|
|
|
(6)
|
|
|
(1)
|
Net income (loss)
available to Genworth Financial, Inc.'s common
stockholders
|
|
$
|
187
|
|
$
|
(66)
|
|
$
|
267
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to Genworth Financial, Inc.'s common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations available to Genworth Financial,
|
|
|
|
|
|
|
|
|
|
|
|
|
Inc.'s common
stockholders
|
|
$
|
174
|
|
$
|
(60)
|
|
$
|
301
|
|
|
Income (loss) from
discontinued operations available to Genworth Financial,
|
|
|
|
|
|
|
|
|
|
|
|
|
Inc.'s common
stockholders
|
|
|
13
|
|
|
(6)
|
|
|
(34)
|
|
|
Net income (loss)
available to Genworth Financial, Inc.'s common
stockholders
|
|
$
|
187
|
|
$
|
(66)
|
|
$
|
267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations available to Genworth Financial,
Inc.'s
|
|
|
|
|
|
|
|
|
|
|
common stockholders
per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.35
|
|
$
|
(0.12)
|
|
$
|
0.60
|
|
|
Diluted
|
|
$
|
0.34
|
|
$
|
(0.12)
|
|
$
|
0.59
|
Net income (loss)
available to Genworth Financial, Inc.'s common
stockholders
|
|
|
|
|
|
|
|
|
|
|
per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.37
|
|
$
|
(0.13)
|
|
$
|
0.53
|
|
|
Diluted
|
|
$
|
0.37
|
|
$
|
(0.13)
|
|
$
|
0.52
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
506.0
|
|
|
504.3
|
|
|
505.6
|
|
|
Diluted6
|
|
|
513.8
|
|
|
504.3
|
|
|
512.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income (Loss) to Adjusted Operating Income
|
(Amounts in
millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
Three
|
|
Three
|
|
|
|
|
|
months
ended
|
|
months
ended
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
2021
|
|
2020
|
|
2020
|
Net income (loss)
available to Genworth Financial, Inc.'s common
stockholders
|
|
$
|
187
|
|
$
|
(66)
|
|
$
|
267
|
Add: net income
(loss) from continuing operations attributable to noncontrolling
interests
|
|
|
—
|
|
|
—
|
|
|
—
|
Add: net income
(loss) from discontinued operations attributable to noncontrolling
interests
|
|
|
8
|
|
|
(6)
|
|
|
(1)
|
Net income
(loss)
|
|
|
195
|
|
|
(72)
|
|
|
266
|
Less: income (loss)
from discontinued operations, net of taxes
|
|
|
21
|
|
|
(12)
|
|
|
(35)
|
Income (loss) from
continuing operations
|
|
|
174
|
|
|
(60)
|
|
|
301
|
Less: net income
(loss) from continuing operations attributable to noncontrolling
interests
|
|
|
—
|
|
|
—
|
|
|
—
|
Income (loss) from
continuing operations available to Genworth Financial,
Inc.'s
|
|
|
|
|
|
|
|
|
|
|
common
stockholders
|
|
|
174
|
|
|
(60)
|
|
|
301
|
Adjustments to income
(loss) from continuing operations available to Genworth
|
|
|
|
|
|
|
|
|
|
|
Financial, Inc.'s
common stockholders:
|
|
|
|
|
|
|
|
|
|
Net investment
(gains) losses, net13
|
|
|
(33)
|
|
|
88
|
|
|
(144)
|
(Gains) losses on
early extinguishment of debt
|
|
|
4
|
|
|
12
|
|
|
—
|
Expenses related to
restructuring
|
|
|
21
|
|
|
1
|
|
|
1
|
Taxes on
adjustments
|
|
|
2
|
|
|
(21)
|
|
|
30
|
Adjusted operating
income
|
|
$
|
168
|
|
$
|
20
|
|
$
|
188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss):
|
|
|
|
|
|
|
|
|
|
U.S. Mortgage
Insurance segment
|
|
$
|
126
|
|
$
|
148
|
|
$
|
95
|
U.S. Life Insurance
segment:
|
|
|
|
|
|
|
|
|
|
|
Long Term Care
Insurance
|
|
|
95
|
|
|
1
|
|
|
129
|
|
Life
Insurance
|
|
|
(63)
|
|
|
(77)
|
|
|
(20)
|
|
Fixed
Annuities
|
|
|
30
|
|
|
6
|
|
|
20
|
|
Total U.S. Life
Insurance segment
|
|
|
62
|
|
|
(70)
|
|
|
129
|
Runoff
segment
|
|
|
12
|
|
|
(13)
|
|
|
13
|
Corporate and
Other
|
|
|
(32)
|
|
|
(45)
|
|
|
(49)
|
Adjusted operating
income
|
|
$
|
168
|
|
$
|
20
|
|
$
|
188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to Genworth Financial, Inc.'s common stockholders per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.37
|
|
$
|
(0.13)
|
|
$
|
0.53
|
|
|
Diluted
|
|
$
|
0.37
|
|
$
|
(0.13)
|
|
$
|
0.52
|
Adjusted operating
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.33
|
|
$
|
0.04
|
|
$
|
0.37
|
|
|
Diluted
|
|
$
|
0.33
|
|
$
|
0.04
|
|
$
|
0.37
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
506.0
|
|
|
504.3
|
|
|
505.6
|
|
|
Diluted6
|
|
|
513.8
|
|
|
504.3
|
|
|
512.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Operating Income Previously Reported to Adjusted Operating
Income
|
Re-Presented to
Exclude Discontinued Operations
|
(Amounts in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
March
31,
|
|
December
31
|
|
|
|
2020
|
|
2020
|
Adjusted operating
income as previously reported
|
|
$
|
33
|
|
$
|
173
|
Remove Australia
Mortgage Insurance segment adjusted operating (income)
loss
|
|
|
|
|
|
|
|
reported as
discontinued operations
|
|
|
(9)
|
|
|
16
|
Adjustment for
corporate overhead allocations, net of
taxes14
|
|
|
(4)
|
|
|
(5)
|
Tax
adjustments15
|
|
|
—
|
|
|
4
|
Re-presented adjusted
operating income
|
|
$
|
20
|
|
$
|
188
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
(Amounts in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Cash, cash
equivalents, restricted cash and invested assets
|
|
$
|
73,627
|
|
$
|
77,917
|
|
Deferred acquisition
costs
|
|
|
1,247
|
|
|
1,487
|
|
Intangible
assets
|
|
|
155
|
|
|
157
|
|
Reinsurance
recoverable, net
|
|
|
16,744
|
|
|
16,819
|
|
Deferred tax and
other assets
|
|
|
753
|
|
|
469
|
|
Separate account
assets
|
|
|
6,032
|
|
|
6,081
|
|
Assets related to
discontinued operations
|
|
|
—
|
|
|
2,817
|
|
|
|
|
Total
assets
|
|
$
|
98,558
|
|
$
|
105,747
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Future policy
benefits
|
|
$
|
40,634
|
|
$
|
42,695
|
|
|
Policyholder account
balances
|
|
|
19,999
|
|
|
21,503
|
|
|
Liability for policy
and contract claims
|
|
|
11,415
|
|
|
11,486
|
|
|
Unearned
premiums
|
|
|
728
|
|
|
775
|
|
|
Other
liabilities
|
|
|
1,710
|
|
|
1,614
|
|
|
Long-term
borrowings
|
|
|
2,922
|
|
|
3,403
|
|
|
Separate account
liabilities
|
|
|
6,032
|
|
|
6,081
|
|
|
Liabilities related
to discontinued operations
|
|
|
360
|
|
|
2,370
|
|
|
|
|
Total
liabilities
|
|
|
83,800
|
|
|
89,927
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
1
|
|
|
1
|
|
|
Additional paid-in
capital
|
|
|
12,011
|
|
|
12,008
|
|
|
Accumulated other
comprehensive income (loss)
|
|
|
3,675
|
|
|
4,425
|
|
|
Retained
earnings
|
|
|
1,771
|
|
|
1,584
|
|
|
Treasury stock, at
cost
|
|
|
(2,700)
|
|
|
(2,700)
|
|
|
|
|
Total Genworth
Financial, Inc.'s stockholders' equity
|
|
|
14,758
|
|
|
15,318
|
|
|
Noncontrolling
interests
|
|
|
—
|
|
|
502
|
|
|
|
|
Total
equity
|
|
|
14,758
|
|
|
15,820
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
98,558
|
|
$
|
105,747
|
Summary of Income
From Discontinued Operations Available to
|
Genworth Financial
Inc.'s Common Stockholders
|
(Amounts in
millions)
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2021
|
Net cash
proceeds16
|
|
$
|
370
|
Carrying value of
Genworth Australia, excluding noncontrolling interests
|
|
|
383
|
Excess of carrying
value above net cash proceeds
|
|
|
(13)
|
Less: net deferred
losses and other adjustments17
|
|
|
109
|
Pre-tax loss on
sale
|
|
|
(122)
|
Tax
benefit
|
|
|
119
|
Total after-tax loss
on sale
|
|
|
(3)
|
Income from
discontinued operations, excluding loss on sale
|
|
|
24
|
Less: net income from
discontinued operations attributable to noncontrolling
interests
|
|
|
8
|
Income from
discontinued operations available to Genworth Financial Inc.'s
common stockholders
|
$
|
13
|
|
Reconciliation of
Reported Yield to Core Yield
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
|
|
|
months
ended
|
|
|
|
|
|
March
31,
|
|
December
31,
|
(Assets - amounts
in billions)
|
|
2021
|
|
2020
|
Reported Total
Invested Assets and Cash
|
|
$
|
72.9
|
|
|
$
|
77.3
|
|
Subtract:
|
|
|
|
|
|
|
|
|
|
|
|
Securities
lending
|
|
|
0.1
|
|
|
|
0.1
|
|
|
Unrealized gains
(losses)
|
|
|
6.9
|
|
|
|
10.7
|
|
Adjusted End of
Period Invested Assets and Cash
|
|
$
|
65.9
|
|
|
$
|
66.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Invested
Assets and Cash Used in Reported and Core Yield
Calculation
|
|
$
|
66.2
|
|
|
$
|
66.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Income - amounts
in
millions)
|
|
|
|
|
|
|
|
|
Reported Net
Investment Income
|
|
$
|
801
|
|
|
$
|
846
|
|
Subtract:
|
|
|
|
|
|
|
|
|
|
|
|
Bond calls and
commercial mortgage loan prepayments
|
|
|
15
|
|
|
|
40
|
|
|
Other non-core
items18
|
|
|
2
|
|
|
|
6
|
|
Core Net Investment
Income
|
|
$
|
784
|
|
|
$
|
800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
Yield
|
|
|
4.84
|
%
|
|
|
5.07
|
%
|
Core Yield
|
|
|
4.73
|
%
|
|
|
4.80
|
%
|
1 Private Mortgage Insurer Eligibility
Requirements.
2 Long term care insurance.
3 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.
4 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.
5 The company defines "NM" as not meaningful for
increases or decreases greater than 200 percent.
6 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 for
the three months ended March 31,
2020, the company was required to use basic weighted-average
common shares outstanding in the calculation of diluted loss per
share for the three months ended March 31,
2020, as the inclusion of shares for stock options,
restricted stock units and stock appreciation rights of 5.4 million
would have been antidilutive to the calculation. If the company had
not incurred a loss from continuing operations for the three months
ended March 31, 2020, dilutive
potential weighted-average common shares outstanding would have
been 509.7 million.
7 Company estimate for the first quarter of 2021
due to timing of the preparation and filing of statutory
statements.
8 The PMIERs sufficiency ratio is calculated as
available assets divided by required assets as defined within the
published PMIERs. The current period PMIERs sufficiency ratio is an
estimate due to the timing of the PMIERs filing for the U.S.
mortgage insurance business. As of March 31,
2021, December 31, 2020 and
March 31, 2020, the PMIERs
sufficiency ratios were $1,764
million, $1,229 million and
$1,171 million, respectively, of
available assets above the published PMIERs requirements.
9 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.
10 Genworth Holdings, Inc. had $757 million, $1,078
million and $525 million of
cash, cash equivalents and restricted cash as of March 31, 2021, December
31, 2020 and March 31, 2020,
respectively, which included $60
million and $46 million of
restricted cash and cash equivalents as of March 31, 2021 and December 31, 2020, respectively. Genworth
Holdings, Inc. also held $25 million
and $50 million of restricted U.S.
government securities as of December 31,
2020 and March 31, 2020,
respectively.
11 The government-sponsored enterprises (GSEs) have
imposed certain capital restrictions on the U.S. MI business which
remain in effect until certain conditions are met. These
restrictions currently require Genworth Mortgage Insurance
Corporation, the company's principal U.S. mortgage insurance
subsidiary, to maintain 115 percent of PMIERs minimum required
assets among other restrictions.
12 Genworth's indirect wholly-owned mortgage insurance
subsidiary.
13 For the three months ended March 31, 2020 and December 31, 2020, net
investment (gains) losses were adjusted for DAC and other
intangible amortization and certain benefit reserves of
$(11) million and $3 million,
respectively.
14 Expenses previously reported in the Australia MI
segment and moved to Corporate and Other Activities.
15 Tax impacts resulting from the classification of
Genworth Australia as discontinued operations.
16 Net cash proceeds after adjusting for fees and
expenses.
17 Consists primarily of $160
million of cumulative losses on foreign currency translation
adjustments, partially offset by cumulative unrealized investment
gains of $29 million and deferred tax
gains of $22 million.
18 Includes cost basis adjustments on structured
securities and various other immaterial items.
View original
content:http://www.prnewswire.com/news-releases/genworth-financial-announces-first-quarter-2021-results-301280536.html
SOURCE Genworth Financial, Inc.