RICHMOND, Va., Nov. 2, 2021 /PRNewswire/ --
- Successfully completed initial public offering (IPO) of Enact
Holdings, Inc. (Enact)
- Enact adjusted operating income of $134
million, with 10 percent annual growth in primary insurance
in force and a 14 percent loss ratio
- Enact's PMIERs1 sufficiency ratio estimated at 181
percent, $2,287 million above
published requirements
- U.S. life insurance segment adjusted operating income of
$93 million driven by long term care
insurance (LTC) results benefitting from in force rate actions and
net investment income
- Holding company cash and liquid assets of $638 million and $809
million of holding company debt retired
Genworth Financial, Inc. (NYSE: GNW) today reported results for
the quarter ended September 30, 2021. The company reported net
income2 of $314
million, or $0.61 per diluted
share, in the third quarter of 2021, compared with net income of
$418 million, or $0.82 per
diluted share, in the third quarter of 2020. The company reported
adjusted operating income3 of $239 million, or
$0.46 per diluted share, in the third
quarter of 2021, compared with adjusted operating income of
$125 million, or $0.25 per
diluted share, in the third quarter of 2020.
"Genworth delivered another quarter of strong results," said
Tom McInerney, Genworth President
and CEO. "At the same time, we continued to execute against our
strategic plan, including the successful completion of the Enact
IPO which improved Genworth's financial position and drove ratings
improvements at both Enact and Genworth. With this critical step
behind us, we have a clearer path to reduce holding company debt to
a more sustainable level, which in turn will enable Genworth to
pursue other strategic priorities that are aimed at creating both
near-term and long-term shareholder value."
Strategic Highlights
- Completed IPO of Enact with net proceeds of $529 million to Genworth, reducing ownership of
Enact from 100 percent to 81.6 percent
- Received ratings upgrades from Moody's Investors Service and
S&P Global Ratings following the IPO, in recognition of
improvement in Genworth Holdings, Inc.'s credit risk profile and
increased financial flexibility
- Significantly reduced holding company debt, including the
retirement of the AXA S.A. (AXA) promissory note ($296 million) and AXA's corresponding release of
the 19.9% of Enact common stock pledged as collateral for the note,
as well as the redemption of the remaining principal amount of the
September 2021 debt maturity
($513 million)
- Continued progress against LTC multi-year rate action plan,
with $117 million in annual premium
rate increases and benefit reductions approved in the third quarter
of 2021, bringing total net present value from LTC rate actions to
over $16.3 billion since 2012
Financial Performance
Consolidated Net
Income & Adjusted Operating Income
|
|
|
|
Three months ended
September 30
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Per
|
|
|
|
|
Per
|
|
|
|
|
|
|
|
|
|
diluted
|
|
|
|
|
diluted
|
|
Total
|
(Amounts in
millions, except per share)
|
|
Total
|
|
share
|
|
Total
|
|
share
|
|
% change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to Genworth's common stockholders
|
|
$
|
314
|
|
$
|
0.61
|
|
$
|
418
|
|
$
|
0.82
|
|
(25)%
|
Adjusted operating
income
|
|
$
|
239
|
|
$
|
0.46
|
|
$
|
125
|
|
$
|
0.25
|
|
91 %
|
Weighted-average
diluted shares
|
|
|
514.2
|
|
|
|
|
|
511.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September
30
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
Book value per
share
|
|
|
|
|
$
|
30.11
|
|
|
|
|
$
|
29.19
|
|
|
|
Book value per share,
excluding accumulated other comprehensive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income
(loss)
|
|
|
|
|
$
|
22.62
|
|
|
|
|
$
|
20.99
|
|
|
|
On September 16, 2021, the company
completed the minority IPO of 18.4 percent of its U.S. mortgage
insurance business, Enact, and as a result, net income attributable
to noncontrolling interests in the Enact segment was $4 million in the current quarter. The company's
net income, before noncontrolling interests in the Enact segment,
was $318 million in the third quarter
of 2021. The company's adjusted operating income, before
noncontrolling interests in the Enact segment, for the third
quarter of 2021 was $243 million.
Net investment gains, net of taxes and other adjustments,
increased net income by $70 million
in the current quarter. The investment gains were primarily driven
by mark-to-market gains on limited partnership investments held in
the LTC business. Net income in the third quarter of 2020 included
$277 million of investment gains, net
of taxes and other adjustments.
Net investment income was $859
million in the quarter, compared to $844 million in the prior quarter and
$820 million in the prior year. Net
investment income was higher than the prior quarter and prior year
as a result of higher variable investment income, including income
from limited partnerships, bond calls, commercial mortgage loan
prepayments and the inflation impact on Treasury
Inflation-Protected Securities (TIPS), primarily in the LTC
business. The reported yield and the core yield3 for the
quarter were 5.19 percent and 4.95 percent, respectively, compared
to 5.11 percent and 4.85 percent, respectively, in the prior
quarter.
Genworth's effective tax rate on income from continuing
operations for the current quarter was approximately 18 percent.
The effective tax rate was favorably impacted by higher tax
benefits from a reduction in uncertain tax positions due to the
expiration of certain statute of limitations, partially offset 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.
The below table shows adjusted operating income (loss) by
segment and for Corporate and Other activities:
Adjusted Operating
Income (Loss)
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions)
|
|
Q3
21
|
|
Q2
21
|
|
Q3
20
|
Enact
|
|
$
|
134
|
|
$
|
135
|
|
$
|
141
|
U.S. Life
Insurance
|
|
|
93
|
|
|
71
|
|
|
14
|
Runoff
|
|
|
11
|
|
|
15
|
|
|
19
|
Corporate and
Other
|
|
|
1
|
|
|
(27)
|
|
|
(49)
|
Total Adjusted
Operating Income
|
|
$
|
239
|
|
$
|
194
|
|
$
|
125
|
|
|
|
|
|
|
|
|
|
|
|
|
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 to adjusted operating income is
included at the end of this press release.
Enact
Operating
Metrics
|
|
|
|
|
|
|
|
|
|
(Dollar amounts in
millions)
|
|
Q3
21
|
|
Q2
21
|
|
Q3
20
|
Adjusted operating
income
|
|
$
|
134
|
|
$
|
135
|
|
$
|
141
|
Primary new insurance
written
|
|
$
|
24,000
|
|
$
|
26,700
|
|
$
|
26,600
|
Loss ratio
|
|
|
14 %
|
|
|
12 %
|
|
|
18 %
|
Enact reported adjusted operating income of $134 million,
compared with $135 million in the
prior quarter and $141 million in the
prior year. Enact's primary insurance in force increased 10 percent
versus the prior year from strong new insurance written (NIW),
partially offset by low persistency. Primary NIW decreased 10
percent from the prior quarter and was also down 10 percent versus
the prior year primarily from a smaller private mortgage insurance
market. Earned premiums in the current quarter were flat compared
to the prior quarter and lower than the prior year as insurance in
force growth was offset by a decrease in single premium policy
cancellations, the continued lapse of older, higher priced policies
and higher ceded premiums. In addition, interest expense was higher
in the current quarter versus the prior year from a full quarter's
interest expense on the August 2020
debt issuance.
Enact's current quarter results reflected losses of $34 million and a loss ratio of 14 percent.
Results in the prior quarter and prior year reflected losses of
$30 million and $45 million, and a loss ratio of 12 percent and
18 percent, respectively. New delinquencies in the current quarter
were 7,427, an increase of eight percent from 6,862 in the prior
quarter driven by a seasonal increase. Current quarter new
delinquencies decreased 55 percent from 16,664 in the prior year.
Losses in the prior year were favorably impacted by incurred but
not reported (IBNR) development of $23
million that did not recur. Despite the sequential increase
in new delinquencies, the current quarter new delinquency rate of
0.8 percent remained consistent with pre-pandemic levels.
Approximately 36 percent of new primary delinquencies in the
current quarter were reported in forbearance plans which may cure
at elevated rates.
U.S. Life Insurance
Adjusted Operating
Income (Loss)
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions)
|
|
Q3
21
|
|
Q2
21
|
|
Q3
20
|
Long Term Care
Insurance
|
|
$
|
133
|
|
$
|
98
|
|
$
|
59
|
Life
Insurance
|
|
|
(68)
|
|
|
(40)
|
|
|
(69)
|
Fixed
Annuities
|
|
|
28
|
|
|
13
|
|
|
24
|
Total U.S. Life
Insurance
|
|
$
|
93
|
|
$
|
71
|
|
$
|
14
|
|
|
Long Term Care
Insurance In Force Rate Action Performance
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions)
|
|
Q3
21
|
|
Q2
21
|
|
Q3
20
|
Adjusted Operating
Income from In Force Rate
Actions4,5
|
|
$
|
304
|
|
$
|
310
|
|
$
|
238
|
Long Term Care Insurance
Long term care insurance reported adjusted operating income of
$133 million, compared with $98 million in the prior
quarter and $59 million in the prior year. Earnings from in
force rate actions were more favorable than the prior year, driven
primarily by higher benefit reductions, which included policyholder
benefit reduction elections made as part of a legal settlement, net
of litigation expenses and taxes. LTC results also reflected
higher net investment income of $45
million after-tax versus the prior year and $7 million after-tax versus the prior quarter
from limited partnerships, bond calls, commercial mortgage loan
prepayments and gains on TIPS.
Claim and active policy terminations in the current quarter were
higher compared to the prior quarter but lower compared to the
prior year. Higher claim terminations in recent quarters were
assumed to be driven by the COVID-19 pandemic and temporary in
nature resulting in the establishment, beginning in the fourth
quarter of 2020, of a temporary COVID-19 mortality adjustment
assuming that the company's mortality experience on the most
vulnerable claimants was accelerated, leaving its overall claim
population less likely to terminate compared to the pre-pandemic
average population. In the current quarter, the company made
minimal adjustments to this reserve, leaving a pre-tax balance of
$142 million as of September 30, 2021. As the COVID-19 pandemic
continues to develop, short-term mortality experience may
fluctuate, and the company would increase or decrease the COVID-19
mortality adjustment accordingly.
New claim incidence increased versus the prior quarter but has
remained lower than pre-pandemic levels. With the historically low
new claim incidence, favorable development on IBNR claim reserves
has continued, but to a lesser extent. Since the second quarter of
2020, IBNR has been strengthened to reflect the company's
assumption that incidence during the COVID-19 pandemic has been
temporarily delayed. In the current quarter, given the increase in
incidence, IBNR was reduced by $17
million after-tax, compared to a strengthening of
$19 million after-tax in the prior
year.
Life Insurance
Life insurance reported an adjusted operating loss of
$68 million, compared with adjusted operating losses of
$40 million in the prior quarter and
$69 million in the prior year. Mortality, attributable in part
to the COVID-19 pandemic, was higher compared to both the prior
quarter and the prior year. Current quarter results also included a
$30 million after-tax charge related
to recoverability testing for deferred acquisition costs (DAC) in
the company's universal life insurance products versus a
$13 million after-tax charge related
to these products in the prior quarter. Results in the prior
year reflected higher DAC amortization compared to the current
year, as the large 20-year level-premium term life insurance block
written at the end of 2000 entered its post-level premium period,
as well as higher 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.
Fixed Annuities
Fixed annuities reported adjusted operating income of
$28 million, compared with $13 million in the prior
quarter and $24 million in the prior year. Results in the
current quarter reflected a reduction in fixed indexed annuity
reserves from higher interest rates. Mortality in the single
premium immediate annuity product was favorable versus the prior
quarter but unfavorable versus the prior year.
Runoff
Runoff reported adjusted operating income of $11 million,
compared with $15 million in the prior quarter and
$19 million in the prior year. Current quarter results in the
variable annuity products were unfavorable compared to both the
prior quarter and the prior year from equity market
performance. Mortality experience in the corporate-owned life
insurance business was also higher in the current quarter.
Corporate And Other
Corporate and Other reported adjusted operating income of
$1 million, compared to adjusted operating losses of
$27 million in the prior quarter and $49 million in the
prior year. Results in the current quarter included tax benefits of
$21 million from a reduction in
uncertain tax positions due to the expiration of certain statute of
limitations. Interest expense was also lower in the current quarter
from the reduction of holding company debt.
Capital & Liquidity
Genworth maintains the following capital positions in its
operating subsidiaries:
Key Capital &
Liquidity Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollar amounts in
millions)
|
|
Q3
21
|
|
Q2
21
|
|
Q3
20
|
Enact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Risk-To-Capital Ratio6
|
|
|
11.8:1
|
|
|
|
11.8:1
|
|
|
|
12.1:1
|
|
|
Genworth Mortgage
Insurance Corporation Risk-To-Capital Ratio6
|
|
|
11.9:1
|
|
|
|
12.0:1
|
|
|
|
12.3:1
|
|
|
Private Mortgage
Insurer Eligibility Requirements (PMIERs) Sufficiency
Ratio6,7
|
|
|
181
|
%
|
|
|
165
|
%
|
|
|
132
|
%
|
U.S. Life Insurance
Companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Risk-Based Capital (RBC) Ratio6
|
|
|
290
|
%
|
|
|
272
|
%
|
|
|
239
|
%
|
Holding Company Cash
and Liquid Assets8,9
|
|
$
|
638
|
|
|
$
|
842
|
|
|
$
|
814
|
|
Key Points
- Enact's PMIERs sufficiency ratio is estimated to be 181
percent, $2,287 million above
published PMIERs requirements10. The PMIERs sufficiency
ratio was up sixteen points, or $346
million, sequentially, driven in part by the completion of
an insurance linked notes transaction, which added $372 million of additional PMIERs capital credit
as of September 30, 2021, elevated
lapse from prevailing low interest rates, business cash flows and
lower delinquencies, partially offset by NIW and amortization of
existing reinsurance transactions;
- 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 $570
million at the end of the current quarter, compared to
$760 million at the end of the prior
quarter and $1,217 million at the end
of the third quarter 2020. These amounts are gross of incremental
reinsurance benefits from the elimination of the 0.30
multiplier;
- U.S. life insurance companies' consolidated statutory
risk-based capital is estimated to be 290 percent, up from the
prior quarter primarily from LTC earnings driven by premium rate
increases and benefit reductions, including the impacts from a
legal settlement, favorable investment performance, and favorable
claim and active policy terminations; and
- The holding company ended the quarter with $638 million of cash and liquid assets, including
$3 million that is restricted. Cash
sources in the quarter included $529
million of net proceeds from the execution of the minority
IPO of Enact and cash tax inflows of $96
million from intercompany tax arrangements. During the
current quarter, the company redeemed all of its remaining
$513 million of outstanding principal
due in September 2021 for
approximately $532 million, which
included the principal amount, a make-whole premium and accrued and
unpaid interest. In addition, the AXA promissory note of
$296 million was fully retired
following the Enact IPO. The parent holding company public debt
outstanding was $1.7 billion as of
September 30, 2021.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 provider
of products, services and solutions that help families address the
financial challenges of aging. Headquartered in Richmond, Virginia, Genworth applies its
nearly 150 years of experience each day to helping people navigate
caregiving options and fund their long term care needs. Genworth is
also the parent company of publicly traded Enact (Nasdaq: ACT), a
leading U.S. mortgage insurance provider. For more information on
Genworth, visit genworth.com. From time to time Enact separately
releases financial and other information about its operations. This
information can be found at ir.enactmi.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 third 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 November 3,
2021. Investors are encouraged to review these
materials.
Genworth will conduct a conference call on November 3, 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 November
3rd conference call is 888-208-1820 or
323-794-2110 (outside the U.S.); conference ID # 2955563. 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 #
2955563 through November 17,
2021. The webcast will also be archived on the company's
website for one year.
Prior to Genworth's conference call, Enact will hold a
conference call on November 3, 2021
at 8:00 a.m. (ET) to discuss its
results from the third quarter. Enact's conference call will be
accessible via telephone and the Internet. Enact's November 3rd conference call is
833-730-3978 or 720-405-2123 (outside the U.S.); conference ID #
8756793. To participate in the call by webcast, register at
http://ir.enactmi.com/news-and-events/events at least 15
minutes prior to the webcast to download and install any necessary
software.
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 and are net of the portion
attributable to noncontrolling interests. Net investment gains
(losses) are also adjusted for DAC and other intangible
amortization and certain benefit reserves.
In the third quarter of 2021, the company paid a pre-tax
make-whole premium of $6 million
related to the early redemption of Genworth Holdings, Inc.'s senior
notes originally scheduled to mature in September 2021. This transaction was excluded
from adjusted operating income (loss) as it relates to gains
(losses) on the early extinguishment of debt.
The company recorded a pre-tax expense of $3 million and $5
million in the third and second quarters of 2021,
respectively, 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 (loss) during the periods presented.
The tables at the end of this press release provide a
reconciliation of net income available to Genworth Financial,
Inc.'s common stockholders to adjusted operating income for the
three months ended September 30, 2021
and 2020, as well as for the three months ended June 30, 2021, 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
included in the company's Enact segment. 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 Enact segment. 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 company's Enact segment, 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
included in the company's U.S. Life Insurance segment, 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.
Management also regularly monitors and reports adjusted
operating income from in force rate actions in the long term care
insurance business included in the company's U.S. Life Insurance
segment. Adjusted operating income from in force rate actions
includes premium rate increases and associated benefit reductions
on its long term care insurance products implemented since 2012,
which are net of estimated premium tax, commissions, and other
expenses on an after-tax basis. Estimates for in force rate actions
reflect certain simplifying assumptions that may vary materially
from actual historical results, including but not limited to a
uniform rate of coinsurance and premium taxes in addition to
consistent policyholder behavior over time. Actual behavior may
differ significantly from these assumptions. In addition, estimates
exclude reserve updates resulting from profits followed by losses.
The company considers adjusted operating income from in force rate
actions to be a measure of its operating performance because it
helps bring older generation long term care insurance blocks closer
to a break-even point over time and helps bring the loss ratios on
newer long term care insurance blocks back towards their original
pricing.
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 future reductions of debt, potential
dividends or share repurchases, and future strategic investments,
including a new long term care insurance joint venture, 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 its
strategic plans including: reducing the company's debt
maturities and other near-term liabilities and financial
obligations, reducing costs, stabilizing its U.S. life insurance
businesses without additional capital contributions, improving
overall capital and ratings; establishing a new long term care
insurance joint venture with a strategic partner; an inability to
establish new long term care insurance business or product
offerings due to commercial and/or regulatory challenges; 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 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; 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 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 to its
assumptions, methodologies or otherwise in connection with periodic
or other reviews, including reviews we expect to complete and carry
out in the fourth quarter of 2021); 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 in the fourth quarter of 2021, including risks that
additional information obtained in finalizing our claim reserves
and margin reviews in the fourth quarter of 2021 or other changes
to assumptions or methodologies materially affect margins; 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 changes it may make to its assumptions, methodologies or
otherwise in connection with periodic or other reviews, including
reviews we expect to complete and carry out in the fourth quarter
of 2021); 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: the impact on holding company
liquidity caused by the inability to receive dividends or other
returns of capital from Enact Holdings, including as a result of
the COVID-19 pandemic; continued availability of capital and
financing; future adverse rating agency actions against the company
or Enact Holdings, 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-backed 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, inflation, supply chain disruptions, 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 Enact segment; 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 Enact
Holdings, 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 the private mortgage insurer eligibility requirements
(PMIERs); risks on Enact Holdings' ability to pay its holding
company dividends as a result of the government-sponsored
enterprises' (GSEs) amendments to PMIERs in response to COVID-19 or
additional PMIERs requirements or other restrictions that the GSEs
may place on the ability of Enact Holdings to pay dividends to its
holding company; 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 in 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 Enact segment; additional
restrictions placed on the Enact segment by government and
government-owned enterprises and the GSEs in connection with
additional capital transactions; 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
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Premiums
|
|
$
|
944
|
|
$
|
963
|
|
$
|
947
|
Net investment
income
|
|
|
859
|
|
|
820
|
|
|
844
|
Net investment gains
(losses)
|
|
|
88
|
|
|
351
|
|
|
70
|
Policy fees and other
income
|
|
|
179
|
|
|
184
|
|
|
180
|
|
|
Total
revenues
|
|
|
2,070
|
|
|
2,318
|
|
|
2,041
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
|
|
Benefits and other
changes in policy reserves
|
|
|
1,143
|
|
|
1,273
|
|
|
1,161
|
Interest
credited
|
|
|
123
|
|
|
137
|
|
|
127
|
Acquisition and
operating expenses, net of deferrals
|
|
|
290
|
|
|
235
|
|
|
304
|
Amortization of
deferred acquisition costs and intangibles
|
|
|
106
|
|
|
94
|
|
|
86
|
Interest
expense
|
|
|
35
|
|
|
47
|
|
|
43
|
|
|
Total benefits and
expenses
|
|
|
1,697
|
|
|
1,786
|
|
|
1,721
|
Income from
continuing operations before income taxes
|
|
|
373
|
|
|
532
|
|
|
320
|
Provision for income
taxes
|
|
|
67
|
|
|
130
|
|
|
75
|
Income from
continuing operations
|
|
|
306
|
|
|
402
|
|
|
245
|
Income (loss) from
discontinued operations, net of taxes
|
|
|
12
|
|
|
34
|
|
|
(5)
|
Net income
|
|
|
318
|
|
|
436
|
|
|
240
|
Less: net income from
continuing operations attributable to noncontrolling
|
|
|
|
|
|
|
|
|
|
|
interests
|
|
|
4
|
|
|
—
|
|
|
—
|
Less: net income from
discontinued operations attributable to
|
|
|
|
|
|
|
|
|
|
|
noncontrolling
interests
|
|
|
—
|
|
|
18
|
|
|
—
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
$
|
314
|
|
$
|
418
|
|
$
|
240
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to Genworth Financial, Inc.'s common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations available to Genworth Financial,
|
|
|
|
|
|
|
|
|
|
|
|
|
Inc.'s common
stockholders
|
|
$
|
302
|
|
$
|
402
|
|
$
|
245
|
|
|
Income (loss) from
discontinued operations available to Genworth Financial,
|
|
|
|
|
|
|
|
|
|
|
|
|
Inc.'s common
stockholders
|
|
|
12
|
|
|
16
|
|
|
(5)
|
|
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
$
|
314
|
|
$
|
418
|
|
$
|
240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations available to Genworth Financial,
Inc.'s
|
|
|
|
|
|
|
|
|
|
|
common stockholders
per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.59
|
|
$
|
0.79
|
|
$
|
0.48
|
|
|
Diluted
|
|
$
|
0.59
|
|
$
|
0.79
|
|
$
|
0.47
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
|
|
|
|
|
|
|
|
|
per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.62
|
|
$
|
0.83
|
|
$
|
0.47
|
|
|
Diluted
|
|
$
|
0.61
|
|
$
|
0.82
|
|
$
|
0.47
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
507.4
|
|
|
505.6
|
|
|
507.0
|
|
|
Diluted
|
|
|
514.2
|
|
|
511.5
|
|
|
515.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to Adjusted Operating Income
|
(Amounts in
millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
Three
|
|
Three
|
|
|
|
|
|
months
ended
|
|
months
ended
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
$
|
314
|
|
$
|
418
|
|
$
|
240
|
Add: net income from
continuing operations attributable to noncontrolling
interests
|
|
|
4
|
|
|
—
|
|
|
—
|
Add: net income from
discontinued operations attributable to
|
|
|
|
|
|
|
|
|
|
|
noncontrolling
interests
|
|
|
—
|
|
|
18
|
|
|
—
|
Net income
|
|
|
318
|
|
|
436
|
|
|
240
|
Less: income (loss)
from discontinued operations, net of taxes
|
|
|
12
|
|
|
34
|
|
|
(5)
|
Income from
continuing operations
|
|
|
306
|
|
|
402
|
|
|
245
|
Less: net income from
continuing operations attributable to noncontrolling
interests
|
|
|
4
|
|
|
—
|
|
|
—
|
Income from
continuing operations available to Genworth Financial,
Inc.'s
|
|
|
|
|
|
|
|
|
|
|
common
stockholders
|
|
|
302
|
|
|
402
|
|
|
245
|
Adjustments to income
from continuing operations available to Genworth
|
|
|
|
|
|
|
|
|
|
|
Financial, Inc.'s
common stockholders:
|
|
|
|
|
|
|
|
|
|
Net investment
(gains) losses, net11
|
|
|
(88)
|
|
|
(350)
|
|
|
(70)
|
(Gains) losses on
early extinguishment of debt
|
|
|
6
|
|
|
—
|
|
|
—
|
Expenses related to
restructuring
|
|
|
3
|
|
|
—
|
|
|
5
|
Taxes on
adjustments
|
|
|
16
|
|
|
73
|
|
|
14
|
Adjusted operating
income
|
|
$
|
239
|
|
$
|
125
|
|
$
|
194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss):
|
|
|
|
|
|
|
|
|
|
Enact
segment
|
|
$
|
134
|
|
$
|
141
|
|
$
|
135
|
U.S. Life Insurance
segment:
|
|
|
|
|
|
|
|
|
|
|
Long Term Care
Insurance
|
|
|
133
|
|
|
59
|
|
|
98
|
|
Life
Insurance
|
|
|
(68)
|
|
|
(69)
|
|
|
(40)
|
|
Fixed
Annuities
|
|
|
28
|
|
|
24
|
|
|
13
|
|
Total U.S. Life
Insurance segment
|
|
|
93
|
|
|
14
|
|
|
71
|
Runoff
segment
|
|
|
11
|
|
|
19
|
|
|
15
|
Corporate and
Other
|
|
|
1
|
|
|
(49)
|
|
|
(27)
|
Adjusted operating
income
|
|
$
|
239
|
|
$
|
125
|
|
$
|
194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to Genworth Financial, Inc.'s common stockholders per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.62
|
|
$
|
0.83
|
|
$
|
0.47
|
|
|
Diluted
|
|
$
|
0.61
|
|
$
|
0.82
|
|
$
|
0.47
|
Adjusted operating
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.47
|
|
$
|
0.25
|
|
$
|
0.38
|
|
|
Diluted
|
|
$
|
0.46
|
|
$
|
0.25
|
|
$
|
0.38
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
507.4
|
|
|
505.6
|
|
|
507.0
|
|
|
Diluted
|
|
|
514.2
|
|
|
511.5
|
|
|
515.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Operating Income Previously Reported to Adjusted Operating
Income
|
Re-Presented to
Exclude Discontinued Operations
|
(Amounts in
millions)
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
September
30,
|
|
|
|
2020
|
Adjusted operating
income as previously reported
|
|
$
|
132
|
Remove Australia
Mortgage Insurance segment adjusted operating income
|
|
|
|
|
reported as
discontinued operations
|
|
|
(7)
|
Adjustment for
corporate overhead allocations, net of
taxes12
|
|
|
(4)
|
Tax
adjustments13
|
|
|
4
|
Re-presented adjusted
operating income
|
|
$
|
125
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
(Amounts in
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash, cash
equivalents, restricted cash and invested assets
|
|
$
|
75,281
|
|
$
|
77,917
|
|
Deferred acquisition
costs
|
|
|
1,193
|
|
|
1,487
|
|
Intangible
assets
|
|
|
147
|
|
|
157
|
|
Reinsurance
recoverable, net
|
|
|
16,671
|
|
|
16,819
|
|
Deferred tax and
other assets
|
|
|
605
|
|
|
469
|
|
Separate account
assets
|
|
|
5,978
|
|
|
6,081
|
|
Assets related to
discontinued operations
|
|
|
—
|
|
|
2,817
|
|
|
|
|
Total
assets
|
|
$
|
99,875
|
|
$
|
105,747
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Future policy
benefits
|
|
$
|
41,794
|
|
$
|
42,695
|
|
|
Policyholder account
balances
|
|
|
19,607
|
|
|
21,503
|
|
|
Liability for policy
and contract claims
|
|
|
11,743
|
|
|
11,486
|
|
|
Unearned
premiums
|
|
|
685
|
|
|
775
|
|
|
Other
liabilities
|
|
|
1,568
|
|
|
1,614
|
|
|
Long-term
borrowings
|
|
|
2,412
|
|
|
3,403
|
|
|
Separate account
liabilities
|
|
|
5,978
|
|
|
6,081
|
|
|
Liabilities related
to discontinued operations
|
|
|
36
|
|
|
2,370
|
|
|
|
|
Total
liabilities
|
|
|
83,823
|
|
|
89,927
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
1
|
|
|
1
|
|
|
Additional paid-in
capital
|
|
|
11,850
|
|
|
12,008
|
|
|
Accumulated other
comprehensive income (loss)
|
|
|
3,800
|
|
|
4,425
|
|
|
Retained
earnings
|
|
|
2,325
|
|
|
1,584
|
|
|
Treasury stock, at
cost
|
|
|
(2,700)
|
|
|
(2,700)
|
|
|
|
|
Total Genworth
Financial, Inc.'s stockholders' equity
|
|
|
15,276
|
|
|
15,318
|
|
|
Noncontrolling
interests
|
|
|
776
|
|
|
502
|
|
|
|
|
Total
equity
|
|
|
16,052
|
|
|
15,820
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
99,875
|
|
$
|
105,747
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Reported Yield to Core Yield
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
|
|
|
months
ended
|
|
|
|
|
|
September
30,
|
|
June
30,
|
(Assets - amounts
in billions)
|
|
2021
|
|
2021
|
Reported Total
Invested Assets and Cash
|
|
$
|
74.7
|
|
|
$
|
75.2
|
|
Subtract:
|
|
|
|
|
|
|
|
|
|
|
|
Securities
lending
|
|
|
—
|
|
|
|
0.1
|
|
|
Unrealized gains
(losses)
|
|
|
8.5
|
|
|
|
8.9
|
|
Adjusted End of
Period Invested Assets and Cash
|
|
$
|
66.2
|
|
|
$
|
66.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Invested
Assets and Cash Used in Reported and Core Yield
Calculation
|
|
$
|
66.2
|
|
|
$
|
66.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Income - amounts
in
millions)
|
|
|
|
|
|
|
|
|
Reported Net
Investment Income
|
|
$
|
859
|
|
|
$
|
844
|
|
Subtract:
|
|
|
|
|
|
|
|
|
|
|
|
Bond calls and
commercial mortgage loan prepayments
|
|
|
43
|
|
|
|
39
|
|
|
Other non-core
items14
|
|
|
(4)
|
|
|
|
3
|
|
Core Net Investment
Income
|
|
$
|
820
|
|
|
$
|
802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
Yield
|
|
|
5.19
|
%
|
|
|
5.11
|
%
|
Core Yield
|
|
|
4.95
|
%
|
|
|
4.85
|
%
|
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 Excludes reserve updates resulting from profits
followed by losses.
5 Includes estimated premium tax, commissions, and
other expenses, net of tax of $(61)
million, $(69) million and
$(12) million in the third quarter
2021, second quarter 2021 and third quarter 2020, respectively.
Also includes estimated impacts from a legal settlement, net of tax
and litigation expenses, of $48
million and $71 million in the
third quarter 2021 and second quarter 2021, respectively.
6 Company estimate for the third quarter of 2021
due to timing of the preparation and filing of statutory
statements.
7 The PMIERs sufficiency ratio is calculated as
available assets divided by required assets as defined within the
published PMIERs. As of September 30,
2021, June 30, 2021 and
September 30, 2020, the PMIERs
sufficiency ratios were $2,287
million, $1,941 million and
$1,074 million, respectively, of
available assets above the published PMIERs requirements.
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 Genworth Holdings, Inc. had $588 million, $742
million and $814 million of
cash, cash equivalents and restricted cash as of September 30, 2021, June
30, 2021 and September 30,
2020, respectively, which included $74 million of restricted cash and cash
equivalents as of September 30, 2020.
Genworth Holdings, Inc. also held $50
million and $100 million in
U.S. government securities as of September
30, 2021 and June 30, 2021,
respectively, which included $3
million and $19 million,
respectively, of restricted assets.
10 The GSEs have imposed certain capital
restrictions on the Enact 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.
11 For the three months ended September 30, 2020, net investment (gains) losses
were adjusted for DAC and other intangible amortization and certain
benefit reserves of $1 million.
12 Expenses previously reported in the Australia
Mortgage Insurance segment and moved to Corporate and Other
activities.
13 Tax impacts resulting from the classification of
Genworth Australia as discontinued operations.
14 Includes cost basis adjustments on structured
securities and various other immaterial items.
View original
content:https://www.prnewswire.com/news-releases/genworth-financial-announces-third-quarter-2021-results-301414457.html
SOURCE Genworth Financial, Inc.