Table of Contents

Exhibit 99.2

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Table of Contents

GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Table of Contents

  Page

Investor Letter

  3

Use of Non-GAAP Measures and Definition of Sales

  4

First Quarter Results—Three months ended March 31, 2006 as compared to three months ended March 31, 2005

 

Financial Highlights

  6

Reconciliation of Net Earnings to Net Operating Earnings

  7

Net Earnings

  8

Consolidated Balance Sheet

  9

Deferred Acquisition Costs Rollforward

  11

First Quarter Results by Segment

 

Consolidated Net Earnings and Net Operating Earnings by Quarter

  13

Consolidated Net Earnings and Net Operating Earnings

  14

Segment Net Earnings and Segment Net Operating Earnings and Sales—Protection

  16-20

Segment Net Earnings and Segment Net Operating Earnings and Sales—Retirement Income and Investments

  21-24

Segment Net Earnings and Segment Net Operating Earnings and Sales—Mortgage Insurance

  25-27

Segment Net Earnings and Segment Net Operating Earnings—Corporate and Other

  28

Additional Financial Data

 

Investments Summary

  30

Fixed Maturities Summary

  32

Commercial Mortgage Loans Data

  33

General Account GAAP Net Investment Income Yields

  35

Assets Under Management—Retirement Income and Investments

  36-39

Selected Key Performance Measures—Mortgage Insurance

  40-42

Corporate Information

 

Industry Ratings

  44-45

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Dear Investor,

In conjunction with the release of Genworth's first quarter results for 2006, we have prepared this financial supplement to assist investors in understanding Genworth’s financial results.

The first quarter supplement has several new financial disclosures including additional product sales information as well as additional metrics for our mortgage insurance segment.

Beginning in 2006, our Mexican-domiciled operations will be reported within the payment protection business. All quarters presented have been revised to combine our Mexico operations and payment protection insurance. The revision has also been made to reflect the impact on the Corporate and Other segment where Mexico operations results were previously reported.

Effective January 1, 2006, we are allocating net realized investment gains (losses) to our business segments in the determination of segment GAAP net earnings. Prior to 2006, all net realized investment gains (losses) were recorded to the Corporate and Other segment. Net realized investment gains (losses) continue to be excluded from segment net operating earnings as more fully described on page 4 of this financial supplement.

Please feel free to call if you have any additional questions.

Regards,

Jean Peters

Senior Vice President

Investor Relations and Corporate Communications

804-662-2693

Alicia Charity

Vice President

Investor Relations

804-662-2248

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Use of Non-GAAP Measures

This financial supplement includes the non-GAAP financial measure entitled “net operating earnings.” The company defines net operating earnings as net earnings from continuing operations, excluding after-tax net realized investment gain (losses), net of taxes and other adjustments, changes in accounting principles and infrequent or unusual non-operating items. There were no infrequent or unusual non-operating items excluded from net operating earnings for the periods presented in this financial supplement.

Management believes that analysis of net operating earnings enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers. However, net operating earnings should not be viewed as a substitute for GAAP net earnings. In addition, the company’s definition of net operating earnings may differ from the definitions used by other companies. The table on page 7 of this report provides a reconciliation of net earnings to net operating earnings (as defined above) for the three months ended March 31, 2006 and 2005.

During 2006, we began allocating net realized investment gains (losses) to the segments in determining segment net income. We exclude the net realized investment gains (losses), net of taxes and other adjustments, from segment net operating earnings for each of the segments. Other adjustments represent amortization of deferred acquisition costs and other intangible assets associated with the net realized gains (losses). During 2005, all net realized investment gains (losses) were recorded in the Corporate and Other segment. Reconciliation of GAAP net earnings to net operating earnings is included herein.

Definition of Sales

The term “sales” as used in this financial supplement means (1) annualized first-year premiums for term life insurance, long-term care insurance, and group life and health insurance; (2) new and additional premiums/deposits for universal life insurance, spread-based and variable products; (3) new deposits for managed assets; (4) written premiums gross of reinsurance and cancellations for payment protection insurance; (5) new insurance written for mortgage insurance, which in each case reflects the amount of business the company generated during each period presented; and (6) written premiums net of cancellations for our Mexican-domiciled operations. Sales do not include renewal premiums on policies or contracts written during prior periods. The company considers annualized first-year premiums, new premiums/deposits, written premiums and new insurance written to be a measure of the company’s operating performance because they represent a measure of new sales of insurance policies or contracts during a specified period, rather than a measure of the company’s revenues or profitability during that period. This operating measure enables 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.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

First Quarter Results

Three months ended March 31, 2006 as compared to

three months ended March 31, 2005

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Financial Highlights

(amounts in millions, except per share data)

 

Balance Sheet Data

  2006   2005
     Q1   Q4   Q3   Q2   Q1

Total stockholders’ equity, excluding accumulated other comprehensive income

  $ 11,738   $ 11,906   $ 11,615   $ 11,343   $ 11,062

Total accumulated other comprehensive income

    740     1,404     1,713     2,163     1,458
                               

Total stockholder’s equity

  $ 12,478   $ 13,310   $ 13,328   $ 13,506   $ 12,520
                               

Book value per common share

  $ 27.37   $ 28.26   $ 28.31   $ 28.69   $ 26.62

Book value per common share, excluding accumulated other comprehensive income

  $ 25.74   $ 25.28   $ 24.67   $ 24.10   $ 23.52

Common shares outstanding as of balance sheet date

    456.0     470.9     470.8     470.7     470.2

 

Basic and Diluted Shares

  Three months
ended
March 31, 2006

Weighted-average shares used in basic earnings per common share calculations

  467.0

Dilutive securities:

 

Stock purchase contracts underlying equity units (1)

  7.5

Stock options, restricted stock units and stock appreciation rights

  5.0
   

Weighted-average shares used in diluted earnings per common share calculations

  479.5
   

(1) For more information on our Equity Units, see note 13 (d) in our audited financial statements filed on Form 10-K for the year ended December 31, 2005.

 

Dilutive Effect of Stock Purchase Contracts Underlying Equity Units

  Average market
price
  Incremental
Shares
(a)
  $ 30.00     5.4
  $ 31.00     6.1
  $ 32.00     6.7
  $ 33.00     7.2
  $ 34.00     7.8
  $ 35.00     8.3
  $ 36.00     8.8
  $ 37.00     9.2
  $ 38.00     9.6
  $ 39.00     10.0
  $ 40.00     10.4

(a) Incremental shares are calculated using the treasury stock method.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Reconciliation of Net Earnings to Net Operating Earnings

(amounts in millions, except per share data)

 

    Three months
ended March 31,
    2006   2005

Net earnings

  $ 334   $ 322

Less cumulative effect of accounting change, net of taxes

    4     —  
           

Net earnings before accounting change

    330     322

Net realized investment losses (gains), net of taxes and other adjustments

    15     4
           

Net operating earnings

  $ 345   $ 326
           

Net earnings per common share:

   

Basic

  $ 0.72   $ 0.66
           

Diluted

  $ 0.70   $ 0.65
           

Net earnings before accounting change per common share:

 

Basic

  $ 0.71   $ 0.66
           

Diluted

  $ 0.69   $ 0.65
           

Net operating earnings per common share:

   

Basic

  $ 0.74   $ 0.67
           

Diluted

  $ 0.72   $ 0.66
           

Weighted-average common shares outstanding:

   

Basic

    467.0     488.8
           

Diluted

    479.5     494.3
           

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Net Earnings

(amounts in millions)

 

     Three months
ended March 31,
 
     2006     2005  

REVENUES:

    

Premiums

   $ 1,539     $ 1,605  

Net investment income

     924       851  

Net realized investment gains (losses)

     (22 )     (6 )

Policy fees and other income

     184       161  
                

Total revenues

     2,625       2,611  
                

BENEFITS AND EXPENSES:

    

Benefits and other changes in policy reserves

     1,035       1,075  

Interest credited

     373       340  

Acquisition and operating expenses, net of deferrals

     475       447  

Amortization of deferred acquisition costs and intangibles

     174       193  

Interest expense

     82       72  
                

Total benefits and expenses

     2,139       2,127  
                

NET EARNINGS BEFORE INCOME TAXES AND ACCOUNTING CHANGE

     486       484  

Provision for income taxes

     156       162  

Effective tax rate

     32.1 %     33.5 %
                

NET EARNINGS BEFORE ACCOUNTING CHANGE

     330       322  

Cumulative effect of accounting change, net of taxes

     4       —    
                

NET EARNINGS

     334       322  

Net realized investment losses (gains), net of taxes and other adjustments

     15       4  

Cumulative effect of accounting change, net of taxes

     (4 )     —    
                

NET OPERATING EARNINGS

   $ 345     $ 326  
                

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Consolidated Balance Sheet

(amounts in millions)

 

    March 31,
2006
  December 31,
2005
  September 30,
2005
  June 30,
2005
  March 31,
2005

ASSETS

         

Investments:

         

Fixed maturity securities available-for-sale, at fair value

  $ 53,559   $ 53,937   $ 53,740   $ 53,591   $ 52,812

Equity securities available-for-sale, at fair value

    193     206     195     187     184

Commercial mortgage loans

    7,854     7,558     7,272     6,859     6,279

Policy loans

    1,362     1,350     1,353     1,233     1,232

Restricted investments held by securitization entities

        685     753     781     815

Other invested assets

    2,738     3,174     3,224     3,696     3,888
                             

Total investments

    65,706     66,910     66,537     66,347     65,210

Cash and cash equivalents

    1,909     1,875     1,834     1,518     1,461

Accrued investment income

    788     733     749     759     809

Deferred acquisition costs

    5,817     5,586     5,391     5,165     5,212

Intangible assets

    817     782     778     778     819

Goodwill

    1,451     1,450     1,455     1,454     1,462

Reinsurance recoverable

    18,003     18,245     18,331     18,526     18,560

Other assets

    716     967     1,691     1,210     1,551

Separate account assets

    9,700     9,106     8,923     8,731     8,608
                             

Total assets

  $ 104,907   $ 105,654   $ 105,689   $ 104,488   $ 103,692
                             
         

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Consolidated Balance Sheet (continued)

(amounts in millions)

 

    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
 

LIABILITIES AND STOCKHOLDERS’ EQUITY

         

Liabilities:

         

Future annuity and contract benefits

  $ 63,632     $ 63,749     $ 63,786     $ 62,519     $ 62,098  

Liability for policy and contract claims

    3,279       3,364       3,315       3,343       3,376  

Unearned premiums

    3,706       3,647       3,567       3,417       3,580  

Other policyholder liabilities

    443       507       518       682       677  

Other liabilities

    4,551       4,937       5,337       5,609       6,793  

Non-recourse funding obligations

    2,150       1,400       1,400       1,100       900  

Short-term borrowings

    380       152       167       529       544  

Long-term borrowings

    2,729       2,736       2,761       2,416       2,440  

Senior notes underlying equity units

    600       600       600       600       600  

Mandatorily redeemable preferred stock

    100       100       100       100       100  

Deferred tax liability

    1,159       1,386       1,177       1,182       643  

Borrowings related to securitization entities

          660       710       754       813  

Separate account liabilities

    9,700       9,106       8,923       8,731       8,608  
                                       

Total liabilities

    92,429       92,344       92,361       90,982       91,172  
                                       

Commitments and contingencies

         

Stockholders’ equity:

         

Common stock

                             

Additional paid-in capital

    10,682       10,671       10,651       10,651       10,625  
                                       

Accumulated other comprehensive income:

         

Net unrealized investment gains

    223       760       1,040       1,538       847  

Derivatives qualifying as hedges

    280       389       399       406       266  

Foreign currency translation and other adjustments

    237       255       274       219       345  
                                       

Total accumulated other comprehensive income

    740       1,404       1,713       2,163       1,458  

Retained earnings

    2,035       1,735       1,464       1,192       937  

Treasury stock, at cost

    (979 )     (500 )     (500 )     (500 )     (500 )
                                       

Total stockholders’ equity

    12,478       13,310       13,328       13,506       12,520  
                                       

Total liabilities and stockholders’ equity

  $ 104,907     $ 105,654     $ 105,689     $ 104,488     $ 103,692  
                                       
         

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

DEFERRED ACQUISITION COSTS ROLLFORWARD

(amounts in millions)

 

Deferred Acquisition Costs Rollforward

  Protection     Retirement
Income and
Investments
    Mortgage
Insurance
    Corporate
and Other
  Total  

Unamortized balance as of December 31, 2005

  $ 4,585     $ 855     $ 131     $ —     $ 5,571  

Costs deferred

    209       58       20       —       287  

Amortization, net of interest accretion (1)

    (96 )     (33 )     (14 )     —       (143 )

Impact of foreign currency translation

    (3 )     —         (1 )     —       (4 )
                                     

Unamortized balance as of March 31, 2006

    4,695       880       136       —       5,711  

Accumulated effect of net unrealized investment gains

    (6 )     112             —       106  
                                     

Balance as of March 31, 2006

  $ 4,689     $ 992     $ 136     $ —     $ 5,817  
                                     

(1) Amortization, net of interest accretion, includes $0 million of amortization related to net realized investment gains (losses) for our investment contracts.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

First Quarter Results by Segment

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Consolidated Net Earnings and Net Operating Earnings by Quarter

(amounts in millions)

 

     2006     2005  
     Q1     Q4     Q3     Q2   Q1     Total  

REVENUES:

                    

Premiums

  $ 1,539     $ 1,531     $ 1,547     $ 1,614   $ 1,605     $ 6,297  

Net investment income

    924       941       902       842     851       3,536  

Net realized investment gains (losses)

    (22 )     11       (7 )     —       (6 )     (2 )

Policy fees and other income

    184       172       186       154     161       673  
                                               

Total revenues

    2,625       2,655       2,628       2,610     2,611       10,504  
                                               

BENEFITS AND EXPENSES:

                    

Benefits and other changes in policy reserves

    1,035       1,053       1,026       1,051     1,075       4,205  

Interest credited

    373       374       364       347     340       1,425  

Acquisition and operating expenses, net of deferrals

    475       513       506       523     447       1,989  

Amortization of deferred acquisition costs and intangibles

    174       176       217       208     193       794  

Interest expense

    82       80       72       69     72       293  
                                               

Total benefits and expenses

    2,139       2,196       2,185       2,198     2,127       8,706  
                                               

EARNINGS BEFORE INCOME TAXES

    486       459       443       412     484       1,798  

Provision for income taxes

    156       152       136       127     162       577  
                                               

NET EARNINGS BEFORE ACCOUNTING CHANGE

    330       307       307       285     322       1,221  

Cumulative effect of accounting change, net of taxes

    4       —         —         —       —         —    
                                               

NET EARNINGS

    334       307       307       285     322       1,221  

Net realized investment losses (gains), net of taxes and other adjustments

    15       (7 )     4       —       4       1  

Cumulative effect of accounting change, net of taxes

    (4 )     —         —         —       —         —    
                                               

NET OPERATING EARNINGS

  $ 345     $ 300     $ 311     $ 285   $ 326     $ 1,222  
                                               
                                               

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Consolidated Net Earnings and Net Operating Earnings

(amounts in millions)

 

     Protection     Retirement Income and Investments     Mortgage    Corporate
and Other
        

Three months ended March 31, 2006

   Life   Long-
term
care
    Payment
Protection
Insurance
  Group
Life
and
Health
  Total     Spread-
Based
Retail
Products
    Fee-Based
Products
  Spread-
Based
Institutional
Products
    Total     U.S.   International   Total      Total  

REVENUES:

                             

Premiums

   $ 221   $ 425     $ 291   $ 168   $ 1,105     $ 180     $ —     $ —       $ 180     $ 116   $ 131   $ 247    $ 7     $ 1,539  

Net investment income

     138     174       22     12     346       329       4     132       465       35     45     80      33       924  

Net realized investment gains (losses)

     —       4       —       —       4       (7 )     —       (2 )     (9 )     —       1     1      (18 )     (22 )

Policy fees and other income

     83     5       6     3     97       6       71     —         77       4     3     7      3       184  
                                                                                                   

Total revenues

     442     608       319     183     1,552       508       75     130       713       155     180     335      25       2,625  
                                                                                                   

BENEFITS AND EXPENSES:

                             

Benefits and other changes in policy reserves

     183     396       48     120     747       240       1     —         241       19     27     46      1       1,035  

Interest credited

     60     34       —       1     95       160       4     114       278       —       —       —        —         373  

Acquisition and operating expenses, net of deferrals

     36     81       172     41     330       27       43     2       72       32     36     68      5       475  

Amortization of deferred acquisition costs and intangibles

     21     26       65     10     122       31       5     —         36       8     7     15      1       174  

Interest expense

     25     —         —       —       25       1       —       —         1       —       —       —        56       82  
                                                                                                   

Total benefits and expenses

     325     537       285     172     1,319       459       53     116       628       59     70     129      63       2,139  
                                                                                                   

EARNINGS BEFORE INCOME TAXES

     117     71       34     11     233       49       22     14       85       96     110     206      (38 )     486  

Provision (benefit) for income taxes

     43     25       9     4     81       18       7     5       30       24     33     57      (12 )     156  
                                                                                                   
     74     46       25     7     152       31       15     9       55       72     77     149      (26 )     330  

Cumulative effect of accounting change, net of taxes

     —       —         —       —       —         —         —       —         —         —       —       —        4       4  
                                                                                                   

SEGMENT NET EARNINGS (LOSS)

     74     46       25     7     152       31       15     9       55       72     77     149      (22 )     334  

Adjustment to segment net earnings (loss):

                             

Net realized investment losses (gains), net of taxes and other adjustments

     —       (3 )     —       —       (3 )     5       —       1       6       —       —       —        12       15  

Cumulative effect of accounting change, net of taxes

     —       —         —       —       —         —         —       —         —         —       —       —        (4 )     (4 )
                                                                                                   

SEGMENT NET OPERATING (LOSS) EARNINGS

   $ 74   $ 43     $ 25   $ 7   $ 149     $ 36     $ 15   $ 10     $ 61     $ 72   $ 77   $ 149    $ (14 )   $ 345  
                                                                                                   
                                                                                                   

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Consolidated Net Earnings and Net Operating Earnings (continued)

(amounts in millions)

 

      Protection   Retirement Income and Investments   Mortgage    Corporate
and Other
        

Three months ended March 31, 2005

   Life   Long-
term
care
  Payment
Protection
Insurance
  Group
Life
and
Health
  Total   Spread-
Based
Retail
Products
  Fee-Based
Products
  Spread-
Based
Institutional
Products
  Total   U.S.   International   Total      Total  

REVENUES:

                                    

Premiums

   $ 201   $ 408   $ 367   $ 162   $ 1,138   $ 244   $   $   $ 244   $ 111   $ 104   $ 215    $ 8     $ 1,605  

Net investment income

     121     156     27     11     315     331     4     98     433     31     38     69      34       851  

Net realized investment gains (losses)

     —       —       —       —       —       —       —       —       —       —       —       —        (6 )     (6 )

Policy fees and other income

     78     2     5     4     89     3     55     —       58     7     3     10      4       161  
                                                                                           

Total revenues

   $ 400   $ 566   $ 399   $ 177   $ 1,542   $ 578   $ 59   $ 98   $ 735   $ 149   $ 145   $ 294    $ 40     $ 2,611  
                                                                                           

BENEFITS AND EXPENSES:

                                    

Benefits and other changes in policy reserves

     172     388     73     112     745     307     1     —       308     15     6     21      1       1,075  

Interest credited

     59     31     —       —       90     165     3     82     250     —       —       —        —         340  

Acquisition and operating expenses, net of deferrals

     34     65     186     45     330     30     27     2     59     34     25     59      (1 )     447  

Amortization of deferred acquisition costs and intangibles

     20     17     106     9     152     24     3     —       27     6     5     11      3       193  

Interest expense

     9     —       —       —       9     —       —       —       —       —       —       —        63       72  
                                                                                           

Total benefits and expenses

     294     501     365     166     1,326     526     34     84     644     55     36     91      66       2,127  
                                                                                           

EARNINGS BEFORE INCOME TAXES

     106     65     34     11     216     52     25     14     91     94     109     203      (26 )     484  

Provision (benefit) for income taxes

     38     23     12     4     77     18     8     5     31     22     40     62      (8 )     162  
                                                                                           

SEGMENT NET EARNINGS (LOSS)

     68     42     22     7     139     34     17     9     60     72     69     141      (18 )     322  

Adjustment to segment net earnings (loss):

                                    

Net realized investment losses (gains), net of taxes

     —       —       —       —       —       —       —       —       —       —       —       —        4       4  
                                                                                           

SEGMENT NET OPERATING (LOSS) EARNINGS

   $ 68   $ 42   $ 22   $ 7   $ 139   $ 34   $ 17   $ 9   $ 60   $ 72   $ 69   $ 141    $ (14 )   $ 326  
                                                                                           
                                                                                           

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—Protection

(amounts in millions)

 

     2006     2005
     Q1     Q4    Q3    Q2    Q1    Total

REVENUES:

                        

Premiums

  $ 1,105     $ 1,109    $ 1,133    $ 1,141    $ 1,138    $ 4,521

Net investment income

    346       339      321      312      315      1,287

Net realized investment gains (losses)

    4       —        —        —        —        —  

Policy fees and other income

    97       94      110      78      89      371
                                           

Total revenues

    1,552       1,542      1,564      1,531      1,542      6,179
                                           

BENEFITS AND EXPENSES:

                        

Benefits and other changes in policy reserves

    747       731      740      710      745      2,926

Interest credited

    95       98      90      91      90      369

Acquisition and operating expenses, net of deferrals

    330       336      332      352      330      1,350

Amortization of deferred acquisition costs and intangibles

    122       121      163      161      152      597

Interest expense

    25       19      13      11      9      52
                                           

Total benefits and expenses

    1,319       1,305      1,338      1,325      1,326      5,294
                                           

EARNINGS BEFORE INCOME TAXES

    233       237      226      206      216      885

Provision for income taxes

    81       86      81      73      77      317
                                           

SEGMENT NET EARNINGS

    152       151      145      133      139      568

Net realized investment losses (gains), net of taxes and other adjustments

    (3 )     —        —        —        —        —  
                                           

SEGMENT NET OPERATING EARNINGS

  $ 149     $ 151    $ 145    $ 133    $ 139    $ 568
                                           
                                           

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—Life Insurance

(amounts in millions)

 

     2006   2005
     Q1   Q4   Q3   Q2   Q1   Total

REVENUES:

                  

Premiums

  $ 221   $ 207   $ 212   $ 193   $ 201   $ 813

Net investment income

    138     134     122     116     121     493

Net realized investment gains (losses)

    —       —       —       —       —       —  

Policy fees and other income

    83     80     94     65     78     317
                                     

Total revenues

    442     421     428     374     400     1,623
                                     

BENEFITS AND EXPENSES:

                  

Benefits and other changes in policy reserves

    183     158     168     165     172     663

Interest credited

    60     59     59     58     59     235

Acquisition and operating expenses, net of deferrals

    36     36     36     28     34     134

Amortization of deferred acquisition costs and intangibles

    21     26     39     26     20     111

Interest expense

    25     19     13     11     9     52
                                     

Total benefits and expenses

    325     298     315     288     294     1,195
                                     

EARNINGS BEFORE INCOME TAXES

    117     123     113     86     106     428

Provision for income taxes

    43     44     40     31     38     153
                                     

SEGMENT NET EARNINGS

    74     79     73     55     68     275

Net realized investment losses (gains), net of taxes and other adjustments

    —       —       —       —       —       —  
                                     

SEGMENT NET OPERATING EARNINGS

  $ 74   $ 79   $ 73   $ 55   $ 68   $ 275
                                     
                                     

SALES:

             

Sales by Product:

             

Term Life

  $ 34   $ 37   $ 38   $ 34   $ 29   $ 138

Universal Life:

                  

Annualized first-year deposits

    9     7     7     6     7     27

Excess deposits

    19     20     12     8     6     46
                                     

Total Universal Life

    28     27     19     14     13     73
                                     

Total Sales—Life Insurance

  $ 62   $ 64   $ 57   $ 48   $ 42   $ 211
                                     

Sales by Distribution Channel:

                  

Financial Intermediaries

  $ 1   $ 1   $ 1   $ 1   $ 3   $ 6

Independent Producers

    61     63     56     47     39     205
                                     

Total Sales—Life Insurance

  $ 62   $ 64   $ 57   $ 48   $ 42   $ 211
                                     
                                     

Sales from our term life insurance product represent annualized first-year premiums. Annualized first-year premiums are calculated as if premiums are consistently paid for the full period of the sale even if they were actually paid for only a portion of such period. Sales from our universal life product represent annualized first-year deposits and excess deposits.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—Long-term Care Insurance

(amounts in millions)

 

     2006      2005
     Q1      Q4    Q3    Q2    Q1    Total

REVENUES:

                  

Premiums

  $ 425      $ 429    $ 412    $ 431    $ 408    $ 1,680

Net investment income

    174        171      165      160      156      652

Net realized investment gains (losses)

    4        —        —        —        —        —  

Policy fees and other income

    5        5      6      2      2      15
                                            

Total revenues

    608        605      583      593      566      2,347
                                            

BENEFITS AND EXPENSES:

                  

Benefits and other changes in policy reserves

    396        399      389      371      388      1,547

Interest credited

    34        38      31      32      31      132

Acquisition and operating expenses, net of deferrals

    81        79      80      74      65      298

Amortization of deferred acquisition costs and intangibles

    26        22      19      45      17      103

Interest expense

    —          —        —        —        —        —  
                                            

Total benefits and expenses

    537        538      519      522      501      2,080
                                            

EARNINGS BEFORE INCOME TAXES

    71        67      64      71      65      267

Provision for income taxes

    25        24      23      25      23      95
                                            

SEGMENT NET EARNINGS

    46        43      41      46      42      172

Net realized investment losses (gains), net of taxes and other adjustments

    (3 )      —        —        —        —        —  
                                            

SEGMENT NET OPERATING EARNINGS

  $ 43      $ 43    $ 41    $ 46    $ 42    $ 172
                                            
                                            

SALES:

                  

Sales by Distribution Channel:

                  

Financial Intermediaries

  $ 10      $ 9    $ 10    $ 9    $ 10    $ 38

Independent Producers

    17        15      12      13      13      53

Dedicated Sales Specialist

    14        14      16      16      15      61
                                            

Total Individual Long-term Care

    41        38      38      38      38      152

Group Long-term Care

    —          5      —        1      —        6

Medicare Supplement and Other A&H

    7        3      3      3      3      12
                                            

Total Sales

  $ 48      $ 46    $ 41    $ 42    $ 41    $ 170
                                            
                             

Sales from our long-term care products represent annualized first-year premiums. Annualized first-year premiums are calculated as if premiums are consistently paid for the full period of the sale even if they were actually paid for only a portion of such period.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—Payment Protection Insurance

(amounts in millions)

 

     2006    2005
     Q1    Q4    Q3    Q2    Q1    Total

REVENUES:

                       

Premiums

  $ 291    $ 307    $ 343    $ 352    $ 367    $ 1,369

Net investment income

    22      22      23      25      27      97

Net realized investment gains (losses)

    —        —        —        —        —        —  

Policy fees and other income

    6      6      7      8      5      26
                                          

Total revenues

    319      335      373      385      399      1,492
                                          

BENEFITS AND EXPENSES:

                       

Benefits and other changes in policy reserves

    48      61      68      61      73      263

Interest credited

    —        —        —        —        —        —  

Acquisition and operating expenses, net of deferrals

    172      176      176      209      186      747

Amortization of deferred acquisition costs and intangibles

    65      63      93      78      106      340

Interest expense

    —        —        —        —        —        —  
                                          

Total benefits and expenses

    285      300      337      348      365      1,350
                                          

EARNINGS BEFORE INCOME TAXES

    34      35      36      37      34      142

Provision for income taxes

    9      14      13      13      12      52
                                          

SEGMENT NET EARNINGS

    25      21      23      24      22      90

Net realized investment losses (gains), net of taxes and other adjustments

    —        —        —        —        —        —  
                                          

SEGMENT NET OPERATING EARNINGS

  $ 25    $ 21    $ 23    $ 24    $ 22    $ 90
                                          
                                          

SALES:

                  

Payment Protection Insurance

  $ 419    $ 421    $ 454    $ 501    $ 453    $ 1,829

Mexico Operations

    16      16      14      12      12      54
                                          

Total Sales—Payment Protection Insurance

  $ 435    $ 437    $ 468    $ 513    $ 465    $ 1,883
                                          
                                          

Sales from our payment protection insurance business represent total written premiums gross of reinsurance and cancellations during the specified period. Sales from our Mexican-domiciled operations represent total written premiums net of cancellations.

Beginning in 2006, our Mexican-domiciled operations are reported within the payment protection business. All quarters presented have been revised to combine our Mexican operations with payment protection insurance. The revision has also been made to reflect the impact on the Corporate and Other segment where our Mexican operations results were previously reported.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—Group Life and Health Insurance

(amounts in millions)

 

     2006   2005
     Q1   Q4   Q3   Q2   Q1   Total

REVENUES:

             

Premiums

  $ 168   $ 166   $ 166   $ 165   $ 162   $ 659

Net investment income

    12     12     11     11     11     45

Net realized investment gains (losses)

    —       —       —       —       —       —  

Policy fees and other income

    3     3     3     3     4     13
                                     

Total revenues

    183     181     180     179     177     717
                                     

BENEFITS AND EXPENSES:

             

Benefits and other changes in policy reserves

    120     113     115     113     112     453

Interest credited

    1     1     —       1     —       2

Acquisition and operating expenses, net of deferrals

    41     45     40     41     45     171

Amortization of deferred acquisition costs and intangibles

    10     10     12     12     9     43

Interest expense

    —       —       —       —       —       —  
                                     

Total benefits and expenses

    172     169     167     167     166     669
                                     

EARNINGS BEFORE INCOME TAXES

    11     12     13     12     11     48

Provision for income taxes

    4     4     5     4     4     17
                                     

SEGMENT NET EARNINGS

    7     8     8     8     7     31

Net realized investment losses (gains), net of taxes and other adjustments

    —       —       —       —       —       —  
                                     

SEGMENT NET OPERATING EARNINGS

  $ 7   $ 8   $ 8   $ 8   $ 7   $ 31
                                     
                                     

Sales by Distribution Channel:

             

Independent Producers

  $ 34   $ 69   $ 37   $ 38   $ 30   $ 174

Sales from our group life and health insurance products represent annualized first-year premiums. Annualized first-year premiums are calculated as if premiums are consistently paid for the full period of the sale even if they were actually paid for only a portion of such period.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—Retirement Income and Investments

(amounts in millions)

 

     2006     2005
     Q1     Q4   Q3   Q2   Q1   Total

REVENUES:

                    

Premiums

  $ 180     $ 181   $ 189   $ 241   $ 244   $ 855

Net investment income

    465       493     455     432     433     1,813

Net realized investment gains (losses)

    (9 )     —       —       —       —       —  

Policy fees and other income

    77       63     61     62     58     244
                                       

Total revenues

    713       737     705     735     735     2,912
                                       

BENEFITS AND EXPENSES:

                    

Benefits and other changes in policy reserves

    241       255     247     301     308     1,111

Interest credited

    278       276     274     256     250     1,056

Acquisition and operating expenses, net of deferrals

    72       68     66     66     59     259

Amortization of deferred acquisition costs and intangibles

    36       39     33     32     27     131

Interest expense

    1       1     1     1     —       3
                                       

Total benefits and expenses

    628       639     621     656     644     2,560
                                       

EARNINGS BEFORE INCOME TAXES

    85       98     84     79     91     352

Provision for income taxes

    30       30     25     19     31     105
                                       

SEGMENT NET EARNINGS

    55       68     59     60     60     247

Net realized investment losses (gains), net of taxes and other adjustments

    6       —       —       —       —       —  
                                       

SEGMENT NET OPERATING EARNINGS

  $ 61     $ 68   $ 59   $ 60   $ 60   $ 247
                                       
                                       

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—Spread-Based Retail Products

(amounts in millions)

 

      2006      2005
      Q1      Q4    Q3    Q2    Q1    Total

REVENUES:

                          

Premiums

   $ 180      $ 181    $ 189    $ 241    $ 244    $ 855

Net investment income

     329        361      338      322      331      1,352

Net realized investment gains (losses)

     (7 )      —        —        —        —        —  

Policy fees and other income

     6        5      4      5      3      17
                                             

Total revenues

     508        547      531      568      578      2,224
                                             

BENEFITS AND EXPENSES:

                          

Benefits and other changes in policy reserves

     240        255      245      297      307      1,104

Interest credited

     160        165      172      166      165      668

Acquisition and operating expenses, net of deferrals

     27        28      29      31      30      118

Amortization of deferred acquisition costs and intangibles

     31        34      28      28      24      114

Interest expense

     1        1      1      1      —        3
                                             

Total benefits and expenses

     459        483      475      523      526      2,007
                                             

EARNINGS BEFORE INCOME TAXES

     49        64      56      45      52      217

Provision for income taxes

     18        21      17      10      18      66
                                             

SEGMENT NET EARNINGS

     31        43      39      35      34      151

Net realized investment losses (gains) net of taxes and other adjustments

     5        —        —        —        —        —  
                                             

SEGMENT NET OPERATING EARNINGS

   $ 36      $ 43    $ 39    $ 35    $ 34    $ 151
                                             
                                             

SALES:

                   

Sales by Product:

                   

Structured Settlements

   $ 47      $ 51    $ 50    $ 93    $ 153    $ 347

Single Premium Immediate Annuities

     200        193      190      164      166      713

Fixed Annuities

     189        343      378      686      364      1,771
                                             

Total spread-based retail

   $ 436      $ 587    $ 618    $ 943    $ 683    $ 2,831
                                             

Sales by Distribution Channel:

                          

Financial Intermediaries

   $ 323      $ 467    $ 487    $ 771    $ 441    $ 2,166

Independent Producers

     107        113      124      164      230      631

Dedicated Sales Specialists

     6        7      7      8      12      34
                                             

Total spread-based retail

     $436        $587      $618      $943      $683      $2,831
                                             
                                             

Sales from our life-contingent spread-based retail products represent annualized first-year premiums. Annualized first-year premiums are calculated as if premiums are consistently paid for the full period of the sale even if they were actually paid for only a portion of such period. Sales from our non-life-contingent spread-based retail products represent new and additional premiums/deposits.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—Fee-Based Products

(amounts in millions)

 

        2006      2005
        Q1      Q4      Q3      Q2      Q1      Total

REVENUES:

                                    

Premiums

     $ —        $ —        $ —        $ —        $ —        $ —  

Net investment income

       4        6        4        5        4        19

Net realized investment gains (losses)

       —          —          —          —          —          —  

Policy fees and other income

       71        58        57        57        55        227
                                                       

Total revenues

       75        64        61        62        59        246
                                                       

BENEFITS AND EXPENSES:

                                    

Benefits and other changes in policy reserves

       1        —          2        4        1        7

Interest credited

       4        5        1        4        3        13

Acquisition and operating expenses, net of deferrals

       43        36        35        33        27        131

Amortization of deferred acquisition costs and intangibles

       5        5        5        4        3        17

Interest expense

       —          —          —          —          —          —  
                                                       

Total benefits and expenses

       53        46        43        45        34        168
                                                       

EARNINGS BEFORE INCOME TAXES

       22        18        18        17        25        78

Provision for income taxes

       7        4        4        3        8        19
                                                       

SEGMENT NET EARNINGS

       15        14        14        14        17        59

Net realized investment losses (gains), net of taxes and other adjustments

       —          —          —          —          —          —  
                                                       

SEGMENT NET OPERATING EARNINGS

     $ 15      $ 14      $ 14      $ 14      $ 17      $ 59
                                                       
                                                       

Sales by Product:

                               
 

Income Distribution Series1

     $ 264      $ 201      $ 99      $ 95      $ 86      $ 481

Traditional Variable Annuities

       138        134        142        159        178        613

Variable Life

       4        3        3        5        3        14

Asset Management

       582        473        429        378        323        1,603
                                                       

Total fee-based

     $ 988      $ 811      $ 673      $ 637      $ 590      $ 2,711
                                                       

Sales by Distribution Channel:

                                    

Financial Intermediaries

     $ 375      $ 308      $ 221      $ 243      $ 247      $ 1,019

Independent Producers

       308        236        218        228        202        884

Dedicated Sales Specialist:

       305        267        234        166        141        808
                                                       

Total fee-based

     $ 988      $ 811      $ 673      $ 637      $ 590      $ 2,711
                                                       
                                                       

Sales from our fee-based products represent new and additional premiums/deposits.

 

Sales from our traditional variable annuities include additional deposits on existing policies, including policies reinsured in connection with our corporate reorganization. Following is a table representing the additional deposits on policies reinsured:

        2006      2005
        Q1      Q4      Q3      Q2      Q1      Total
       $ 13      $ 10      $ 17      $ 28      $ 38      $ 93

 

(1) Income distribution series products are comprised of our retirement income and annuity product and four variable annuity riders that provide similar income features.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—Spread-Based Institutional Products

(amounts in millions)

 

     2006     2005
     Q1     Q4   Q3   Q2   Q1   Total

REVENUES:

                    

Premiums

  $ —       $ —     $ —     $ —     $ —     $ —  

Net investment income

    132       126     113     105     98     442

Net realized investment gains (losses)

    (2 )     —       —       —       —       —  

Policy fees and other income

    —         —       —       —       —       —  
                                       

Total revenues

    130       126     113     105     98     442
                                       

BENEFITS AND EXPENSES:

                    

Benefits and other changes in policy reserves

    —         —       —       —       —       —  

Interest credited

    114       106     101     86     82     375

Acquisition and operating expenses, net of deferrals

    2       4     2     2     2     10

Amortization of deferred acquisition costs and intangibles

    —         —       —       —       —       —  

Interest expense

    —         —       —       —       —       —  
                                       

Total benefits and expenses

    116       110     103     88     84     385
                                       

EARNINGS BEFORE INCOME TAXES

    14       16     10     17     14     57

Provision for income taxes

    5       5     4     6     5     20
                                       

SEGMENT NET EARNINGS

    9       11     6     11     9     37

Net realized investment losses (gains), net of taxes and other adjustments

    1       —       —       —       —       —  
                                       

SEGMENT NET OPERATING EARNINGS

  $ 10     $ 11   $ 6   $ 11   $ 9   $ 37
                                       
                                       

SALES:

             

Sales by Product:

             

Spread-Based Institutional

             

Guaranteed Investment Contracts (GICs)

  $ 57     $ 31   $ 81   $ 105   $ 49   $ 266

Funding agreements backing notes

    700       500     1,000     150     300     1,950

Funding agreements

    —         —       —       100     —       100
                                       

Total spread-based institutional

  $ 757     $ 531   $ 1,081   $ 355   $ 349   $ 2,316
                                       
                                       

Sales from our spread-based institutional products represent new and additional premiums/deposits.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—Mortgage Insurance

(amounts in millions)

 

     2006   2005
     Q1   Q4   Q3   Q2   Q1   Total

REVENUES:

                  

Premiums

  $ 247   $ 229   $ 218   $ 220   $ 215   $ 882

Net investment income

    80     77     73     68     69     287

Net realized investment gains (losses)

    1     —       —       —       —       —  

Policy fees and other income

    7     11     12     12     10     45
                                     

Total revenues

    335     317     303     300     294     1,214
                                     

BENEFITS AND EXPENSES:

                  

Benefits and other changes in policy reserves

    46     66     36     39     21     162

Acquisition and operating expenses, net of deferrals

    68     74     81     75     59     289

Amortization of deferred acquisition costs and intangibles

    15     14     18     13     11     56
                                     

Total benefits and expenses

    129     154     135     127     91     507
                                     

EARNINGS BEFORE INCOME TAXES

    206     163     168     173     203     707

Provision for income taxes

    57     44     42     52     62     200
                                     

SEGMENT NET EARNINGS

    149     119     126     121     141     507

Net realized investment losses (gains), net of taxes and other adjustments

    —       —       —       —       —       —  
                                     

SEGMENT NET OPERATING EARNINGS

  $ 149   $ 119   $ 126   $ 121   $ 141   $ 507
                                     
                                     

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—U.S. Mortgage Insurance

(amounts in millions)

 

     2006   2005
     Q1   Q4   Q3   Q2   Q1   Total

REVENUES:

                  

Premiums

  $ 116   $ 112   $ 111   $ 113   $ 111   $ 447

Net investment income

    35     33     34     32     31     130

Net realized investment gains (losses)

    —       —       —       —       —       —  

Policy fees and other income

    4     6     6     7     7     26
                                     

Total revenues

    155     151     151     152     149     603
                                     

BENEFITS AND EXPENSES:

                  

Benefits and other changes in policy reserves

    19     50     27     25     15     117

Acquisition and operating expenses, net of deferrals

    32     38     49     40     34     161

Amortization of deferred acquisition costs and intangibles

    8     9     13     7     6     35
                                     

Total benefits and expenses

    59     97     89     72     55     313
                                     

EARNINGS BEFORE INCOME TAXES

    96     54     62     80     94     290

Provision for income taxes

    24     7     4     19     22     52
                                     

SEGMENT NET EARNINGS

    72     47     58     61     72     238

Net realized investment losses (gains), net of taxes and other adjustments

    —       —       —       —       —       —  
                                     

SEGMENT NET OPERATING EARNINGS

  $ 72   $ 47   $ 58   $ 61   $ 72   $ 238
                                     
                                     

SALES:

             

New Insurance Written (NIW):

             

Flow

  $ 5,544   $ 6,567   $ 7,073   $ 6,533   $ 4,983   $ 25,156

Bulk

    1,258     62     147     687     683     1,579

Pool

    41     61     —       —       —       61
                                     

Total U.S. Mortgage NIW

  $ 6,843   $ 6,690   $ 7,220   $ 7,220   $ 5,666   $ 26,796
                                     
                                     

Sales represent new insurance written. New insurance written represents the original principal balance of mortgages covered by newly issued mortgage insurance during the specified period.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings and Sales—International Mortgage Insurance

(amounts in millions)

 

    2006   2005
    Q1   Q4   Q3   Q2   Q1   Total

REVENUES:

           

Premiums

  $ 131   $ 117   $ 107   $ 107   $ 104   $ 435

Net investment income

    45     44     39     36     38     157

Net realized investment gains (losses)

    1     —       —       —       —       —  

Policy fees and other income

    3     5     6     5     3     19
                                   

Total revenues

    180     166     152     148     145     611
                                   

BENEFITS AND EXPENSES:

           

Benefits and other changes in policy reserves

    27     16     9     14     6     45

Acquisition and operating expenses, net of deferrals

    36     36     32     35     25     128

Amortization of deferred acquisition costs and intangibles

    7     5     5     6     5     21
                                   

Total benefits and expenses

    70     57     46     55     36     194
                                   

EARNINGS BEFORE INCOME TAXES

    110     109     106     93     109     417

Provision for income taxes

    33     37     38     33     40     148
                                   

SEGMENT NET EARNINGS

    77     72     68     60     69     269

Net realized investment losses (gains), net of taxes and other adjustments

    —       —       —       —       —       —  
                                   

SEGMENT NET OPERATING EARNINGS

  $ 77   $ 72   $ 68   $ 60   $ 69   $ 269
                                   

SEGMENT OPERATING EARNINGS BY PLATFORM

           

Australia

    30     24     28     25     29     106

Canada

    46     46     38     35     34     153

Europe and Rest of World

    1     2     2     —       6     10
                                   

SEGMENT NET EARNINGS

  $ 77   $ 72   $ 68   $ 60   $ 69   $ 269

Net realized investment losses (gains), net of taxes and other adjustments

    —       —       —       —       —       —  
                                   

SEGMENT NET OPERATING EARNINGS

  $ 77   $ 72   $ 68   $ 60   $ 69   $ 269
                                   
                                   

SALES:

           

New Insurance Written (NIW):

           

Flow

  $ 19,714   $ 19,230   $ 18,556   $ 14,070   $ 12,743   $ 64,599

Bulk

    667     2,650     2,474     7,333     1,500     13,957
                                   

Total International Mortgage NIW

  $ 20,381   $ 21,880   $ 21,030   $ 21,403   $ 14,243   $ 78,556
                                   
                                   

Sales represent new insurance written. New insurance written represents the original principal balance of mortgages covered by newly issued mortgage insurance during the specified period.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Segment Net Earnings and Segment Net Operating Earnings—Corporate and Other

(amounts in millions)

 

    2006     2005  
    Q1     Q4     Q3     Q2     Q1     Total  

REVENUES:

           

Premiums

  $ 7     $ 12     $ 7     $ 12     $ 8     $ 39  

Net investment income

    33       32       53       30       34       149  

Net realized investment gains (losses)

    (18 )     11       (7 )     —         (6 )     (2 )

Policy fees and other income

    3       4       3       2       4       13  
                                               

Total revenues

    25       59       56       44       40       199  
                                               

BENEFITS AND EXPENSES:

           

Benefits and other changes in policy reserves

    1       1       3       1       1       6  

Interest credited

    —         —         —         —         —         —    

Acquisition and operating expenses, net of deferrals

    5       35       27       30       (1 )     91  

Amortization of deferred acquisition costs and intangibles

    1       2       3       2       3       10  

Interest expense

    56       60       58       57       63       238  
                                               

Total benefits and expenses

    63       98       91       90       66       345  
                                               

SEGMENT NET LOSS BEFORE INCOME TAXES AND ACCOUNTING CHANGE

    (38 )     (39 )     (35 )     (46 )     (26 )     (146 )

Benefit from income taxes

    (12 )     (8 )     (12 )     (17 )     (8 )     (45 )
                                               
    (26 )     (31 )     (23 )     (29 )     (18 )     (101 )

SEGMENT NET LOSS BEFORE ACCOUNTING CHANGE

           

Cumulative effect of accounting change, net of taxes

    4       —         —         —         —         —    
                                               

SEGMENT NET LOSS

    (22 )     (31 )     (23 )     (29 )     (18 )     (101 )

Net realized investment losses (gains), net of taxes and other adjustments

    12       (7 )     4       —         4       1  

Cumulative effect of accounting change, net of taxes

    (4 )     —         —         —         —         —    
                                               

NET OPERATING LOSS

  $ (14 )   $ (38 )   $ (19 )   $ (29 )   $ (14 )   $ (100 )
                                               
                                               

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

ADDITIONAL FINANCIAL DATA

 

29


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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Investments Summary

(amounts in millions)

 

     March 31, 2006     December 31, 2005     September 30, 2005     June 30, 2005     March 31, 2005  
     Carrying
Amount
  % of Total     Carrying
Amount
  % of Total     Carrying
Amount
  % of Total     Carrying
Amount
  % of Total     Carrying
Amount
  % of Total  

Composition of Investment Portfolio

                            

Fixed maturity securities:

                            

Investment Grade

                            

Other Public

  $ 24,118   36 %   $ 25,184   37 %   $ 25,250   37 %   $ 25,635   38 %   $ 25,317   38 %

Other Private

    10,272   15       10,200   15       10,171   15       9,889   15       9,443   14  

Mortgage and Asset-Backed Securities

    13,464   20       12,803   19       12,434   18       12,020   18       12,071   18  

Tax Exempt

    2,900   4       2,886   4       2,909   4       2,991   4       3,012   5  

Non Investment Grade

    2,805   4       2,864   4       2,976   4       3,056   5       2,969   5  

Equity securities:

                            

Common stocks and mutual funds

    45   0       54   0       62   0       50   0       52   0  

Preferred stocks

    148   0       152   0       133   0       137   0       132   0  

Commercial mortgage loans

    7,854   12       7,558   11       7,272   11       6,859   10       6,279   9  

Policy loans

    1,362   2       1,350   2       1,353   2       1,233   2       1,232   2  

Restricted investments held by securitization entities

    —     0       685   1       753   1       781   1       815   1  

Cash, cash equivalents and short-term investments

    1,962   3       1,900   3       1,860   3       1,545   2       1,526   2  

Securities lending

    1,597   2       1,820   3       2,212   3       2,670   4       3,019   5  

Other invested assets

    1,088   2       1,329   1       986   2       999   1       804   1  
                                                             

Total invested assets and cash

  $ 67,615   100 %   $ 68,785   100 %   $ 68,371   100 %   $ 67,865   100 %   $ 66,671   100 %
                                                             
                                                             

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

Investments Summary (continued)

(amounts in millions)

 

     March 31, 2006     December 31, 2005     September 30, 2005     June 30, 2005     March 31, 2005  

Public Fixed Maturities—Credit Quality:

  Carrying
Amount
  % of Total     Carrying
Amount
  % of Total     Carrying
Amount
  % of Total     Carrying
Amount
  % of Total     Carrying
Amount
  % of Total  

NAIC
Designation

 

Rating Agency

Equivalent Designation

                                                 

1

  Aaa/Aa/A   $ 29,269   73 %   $ 29,295   72 %   $ 28,966   72 %   $ 29,191   72 %   $ 29,107   72 %

2

  Baa     8,512   22       9,072   23       9,345   23       9,447   23       9,472   23  

3

  Ba     1,504   4       1,466   4       1,575   4       1,529   4       1,439   4  

4

  B     548   1       557   1       440   1       465   1       474   1  

5

  Caa and lower     81   0       79   0       122   0       119   0       91   0  

6

  In or near default     9   0       13   0       12   0       26   0       26   0  

Not rated

  Not rated     5   0       57   0       47   0       36   0       35   0  
                                                               
    Total public fixed maturities   $ 39,928   100 %   $ 40,539   100 %   $ 40,507   100 %   $ 40,813   100 %   $ 40,644   100 %
                                                               
   

Private Fixed Maturities—Credit Quality:

                                                 

NAIC
Designation

 

Rating Agency

Equivalent Designation

                                                 

1

  Aaa/Aa/A   $ 7,707   57 %   $ 7,452   56 %   $ 7,201   55 %   $ 6,907   55 %   $ 6,350   52 %

2

  Baa     5,266   39       5,252   39       5,252   40       4,990   39       4,914   41  

3

  Ba     450   3       470   4       535   4       550   4       543   5  

4

  B     161   1       157   1       139   1       217   2       175   1  

5

  Caa and lower     13   0       16   0       36   0       39   0       46   0  

6

  In or near default     34   0       34   0       50   0       55   0       37   0  

Not rated

  Not rated     —     0       17   0       20   0       20   0       103   1  
                                                               
    Total private fixed maturities   $ 13,631   100 %   $ 13,398   100 %   $ 13,233   100 %   $ 12,778   100 %   $ 12,168   100 %
                                                               
                                                               

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Fixed Maturities Summary

(amounts in millions)

 

     March 31, 2006     December 31, 2005     September 30, 2005     June 30, 2005     March 31, 2005  
     Estimated
Fair Value
  % of Total     Estimated
Fair Value
  % of Total     Estimated
Fair Value
  % of Total     Estimated
Fair Value
  % of Total     Estimated
Fair Value
  % of Total  

Fixed maturities—Security Sector:

                        

U.S. government, agencies & government sponsored entities

  $ 657   1 %   $ 805   2 %   $ 715   1 %   $ 731   1 %   $ 493   1 %

Tax exempt

    2,900   6       2,890   6       2,913   6       2,995   6       3,016   6  

Foreign government

    1,825   4       1,806   3       1,793   3       1,887   3       1,808   3  

U.S. corporate

    25,314   47       26,122   48       26,617   50       27,058   51       26,623   50  

Foreign corporate

    9,291   17       9,390   17       9,144   17       8,776   16       8,651   16  

Mortgage-backed

    8,836   16       8,834   16       8,659   16       8,557   16       8,835   17  

Asset-backed

    4,736   9       4,090   8       3,899   7       3,587   7       3,386   7  
                                                             

Total fixed maturities

  $ 53,559   100 %   $ 53,937   100 %   $ 53,740   100 %   $ 53,591   100 %   $ 52,812   100 %
                                                             

Corporate Bond Holdings—Industry Sector:

                        

Finance and insurance

  $ 11,617   33 %   $ 11,385   32 %   $ 11,151   31 %   $ 10,915   31 %   $ 10,658   30 %

Utilities and energy

    6,552   19       6,836   19       6,963   19       7,171   20       6,985   20  

Consumer—non cyclical

    4,477   13       4,632   13       4,734   13       4,877   14       4,705   13  

Consumer—cyclical

    2,328   7       2,642   7       2,719   8       2,670   7       2,634   8  

Capital goods

    1,833   5       2,043   6       2,134   6       2,194   6       2,289   6  

Industrial

    2,064   6       2,141   6       2,146   6       2,269   6       2,384   7  

Technology and communications

    2,530   7       2,424   7       2,476   7       2,473   7       2,329   7  

Transportation

    1,237   4       1,325   4       1,317   4       1,240   3       1,156   3  

Other

    1,967   6       2,084   6       2,121   6       2,025   6       2,134   6  
                                                             

Total

  $ 34,605   100 %   $ 35,512   100 %   $ 35,761   100 %   $ 35,834   100 %   $ 35,274   100 %
                                                             

Fixed maturities—Contractual Maturity Dates:

                        

Due in one year or less

  $ 2,750   5 %   $ 2,812   5 %   $ 2,646   5 %   $ 2,858   5 %   $ 2,652   5 %

Due after one year through five years

    9,923   19       10,129   19       10,331   19       10,382   19       10,329   20  

Due after five years through ten years

    10,723   20       11,218   21       11,567   22       11,514   22       11,658   22  

Due after ten years

    16,591   31       16,854   31       16,638   31       16,693   31       15,952   30  
                                                             

Subtotal

    39,987   75       41,013   76       41,182   77       41,447   77       40,591   77  

Mortgage and asset-backed

    13,572   25       12,924   24       12,558   23       12,144   23       12,221   23  
                                                             

Total fixed maturities

  $ 53,559   100 %   $ 53,937   100 %   $ 53,740   100 %   $ 53,591   100 %   $ 52,812   100 %
                                                             
                                                             

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Commercial Mortgage Loans Data

(amounts in millions)

 

     March 31, 2006     December 31, 2005     September 30, 2005     June 30, 2005     March 31, 2005  

Summary of Commercial Mortgage Loans

  Carrying
Amount
  % of Total     Carrying
Amount
  % of Total     Carrying
Amount
  % of Total     Carrying
Amount
  % of Total     Carrying
Amount
  % of Total  

Geographic Region

                            

Pacific

  $ 2,285   29 %   $ 2,272   30 %   $ 2,191   30 %   $ 2,043   30 %   $ 1,850   30 %

South Atlantic

    1,668   21       1,586   21       1,508   21       1,451   21       1,234   20  

Middle Atlantic

    1,113   14       1,088   14       1,081   15       998   15       989   16  

East North Central

    868   11       794   11       766   10       704   10       662   11  

Mountain

    612   8       580   8       514   7       496   7       471   8  

West South Central

    345   4       336   4       346   5       306   5       304   5  

West North Central

    450   6       440   6       431   6       432   6       366   5  

East South Central

    292   4       280   4       268   4       261   4       230   3  

New England

    221   3       182   2       167   2       168   2       173   2  
                                                             

Total

  $ 7,854   100 %   $ 7,558   100 %   $ 7,272   100 %   $ 6,859   100 %   $ 6,279   100 %
                                                             

Property Type

                            

Office

  $ 2,293   29 %   $ 2,197   28 %   $ 2,156   30 %   $ 1,914   28 %   $ 1,861   30 %

Industrial

    2,176   28       2,109   28       2,017   28       1,963   29       1,845   30  

Retail

    2,103   27       2,092   28       2,046   28       1,938   28       1,701   27  

Apartments

    952   12       833   11       746   10       708   10       655   10  

Mixed use/other

    330   4       327   5       307   4       336   5       217   3  
                                                             

Total

  $ 7,854   100 %   $ 7,558   100 %   $ 7,272   100 %   $ 6,859   100 %   $ 6,279   100 %
                                                             
                                                             

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

Commercial Mortgage Loans Data (continued)

(amounts in millions)

 

 

     March 31, 2006     December 31, 2005     September 30, 2005     June 30, 2005     March 31, 2005  

Summary of Commercial Mortgage Loans

  Principal
Balance
  % of Total     Principal
Balance
  % of Total     Principal
Balance
  % of Total     Principal
Balance
  % of Total     Principal
Balance
  % of Total  

Loan Size

                            

Under $5 million

  $ 3,514     45 %   $ 3,407   45 %   $ 3,330   46 %   $ 3,247   47 %   $ 3,122   49 %

$5 million but less than $10 million

    1,854     23       1,831   24       1,720   23       1,647   24       1,457   23  

$10 million but less than $20 million

    1,498     19       1,427   19       1,382   19       1,245   18       1,072   17  

$20 million but less than $30 million

    525     7       448   6       466   6       323   5       350   6  

$30 million and over

    487     6       469   6       429   6       446   6       324   5  
                                                               

Total

  $ 7,878     100 %   $ 7,582   100 %   $ 7,327   100 %   $ 6,908   100 %   $ 6,325   100 %
                                                               
                                                               
                       
     March 31,
2006
  December 31,
2005
                                         

Allowance for Losses on Commercial Mortgage Loans

                            

Balance, beginning of year

  $ 31   $ 52                    

Provisions

    —       11                    

Releases

    —       (32 )                  

Deductions for write-downs and dispositions

    —       —                      
                                 

Balance, end of year

  $ 31   $ 31                    
                                 
                                 

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

General Account GAAP Net Investment Income Yields

(amounts in millions)

 

     2006     2005  
     Q1     Q4     Q3     Q2     Q1     Total  

GAAP Net Investment Income

                    

Fixed maturities—taxable

  $ 719     $ 691     $ 694     $ 665     $ 669     $ 2,719  

Fixed maturities—non-taxable

    31       32       31       32       33       128  

Commercial mortgage loans

    121       145       116       98       98       457  

Equity securities

    7       7       6       6       6       25  

Other investments

    11       34       20       10       14       78  

Policy loans

    30       29       27       27       26       109  

Restricted investments held by securitization entities

    7       11       12       13       14       50  

Cash, cash equivalents and short-term investments

    17       11       15       7       8       41  
                                                 

Gross investment income before expenses and fees

    943       960       921       858       868       3,607  
                                                 

Expenses and fees

    (19 )     (19 )     (19 )     (16 )     (17 )     (71 )
                                                 

Net investment income

  $ 924     $ 941     $ 902     $ 842     $ 851     $ 3,536  
                                                 

Annualized Yields

                    

Fixed maturities—taxable

    5.7 %     5.6 %     5.7 %     5.5 %     5.6 %     5.6 %

Fixed maturities—non-taxable

    4.4 %     4.5 %     4.5 %     4.5 %     4.5 %     4.5 %

Commercial mortgage loans

    6.3 %     7.8 %     6.6 %     6.0 %     6.4 %     6.7 %

Equity securities

    12.3 %     9.4 %     9.0 %     8.6 %     8.8 %     8.9 %

Other investments

    5.2 %     13.9 %     7.9 %     4.6 %     6.9 %     8.5 %

Policy loans

    8.8 %     8.6 %     8.5 %     8.9 %     8.3 %     8.6 %

Restricted investments held by securitization entities

    8.2 %     6.2 %     6.2 %     6.3 %     6.9 %     6.4 %

Cash, cash equivalents and short-term investments

    3.6 %     2.3 %     3.6 %     1.8 %     1.7 %     2.3 %
                                                 

Gross investment income before expenses and fees

    5.7 %     5.9 %     5.8 %     5.5 %     5.6 %     5.7 %
                                                 

Expenses and fees

    -0.1 %     -0.1 %     -0.1 %     -0.1 %     -0.1 %     -0.1 %
                                                 

Net investment income

    5.6 %     5.8 %     5.7 %     5.4 %     5.5 %     5.6 %
                                                 
                                                 

Yields for fixed maturities and equity securities are based on amortized cost and cost, respectively. Yields for securities lending activity, which is included in other investments, are calculated net of the corresponding securities lending liability. All other yields are based on average carrying values.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Assets Under Management—Retirement Income and Investments

(amounts in millions)

 

     2006     2005  
     Q1     Q4     Q3     Q2     Q1  

Spread-Based Retail Products

                  
 

Fixed Annuities

                  

Account value, net of reinsurance, beginning of period

  $ 15,547     $ 15,676     $ 15,540     $ 15,214     $ 15,113  

Deposits

    267       356       530       699       285  

Interest credited

    145       151       154       150       150  

Surrenders, benefits and product charges

    (718 )     (636 )     (548 )     (523 )     (334 )
                                         

Account value, net of reinsurance, end of period

    15,241       15,547       15,676       15,540       15,214  
                                         

Single Premium Income Annuities

                  

Account value, net of reinsurance, beginning of period

    5,680       5,578       5,488       5,415       5,344  

Premiums and deposits

    250       240       230       215       212  

Interest credited

    80       79       77       80       77  

Surrenders, benefits and product charges

    (238 )     (217 )     (217 )     (222 )     (218 )
                                         

Account value, net of reinsurance, end of period

    5,772       5,680       5,578       5,488       5,415  
                                         

Structured Settlements

                  

Account value, net of reinsurance, beginning of period

    871       831       765       653       533  

Premiums and deposits

    58       41       69       116       124  

Interest credited

    12       12       11       11       11  

Surrenders, benefits and product charges

    (16 )     (13 )     (14 )     (15 )     (15 )
                                         

Account value, net of reinsurance, end of period

    925       871       831       765       653  
                                         

Total Spread-Based Retail Products, net of reinsurance

  $ 21,938     $ 22,098     $ 22,085     $ 21,793     $ 21,282  
                                         

Spread-Based Institutional Products

                  
 

GICs, Funding Agreements and Funding Agreements Backing Notes

                  

Account value, net of reinsurance, beginning of period

  $ 9,777     $ 9,998     $ 9,162     $ 9,408     $ 9,541  

Deposits

    980       587       1,402       871       841  

Interest credited

    114       107       101       86       82  

Surrenders and benefits

    (1,105 )     (915 )     (667 )     (1,203 )     (1,056 )
                                         

Account value, end of period

    9,766       9,777       9,998       9,162       9,408  
                                         

Total Spread-Based Retail and Institutional Products

  $ 31,704     $ 31,875     $ 32,083     $ 30,955     $ 30,690  
                                         
                                         

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

Assets Under Management—Retirement Income and Investments (continued)

(amounts in millions)

 

     2006     2005  
     Q1     Q4     Q3     Q2     Q1  

Fee-Based Products

                  

Income Distribution Series

                  

Account value, net of reinsurance, beginning of period

  $ 911     $ 747     $ 634     $ 540     $ 462  

Deposits

    281       170       109       92       85  

Interest credited and investment performance

    59       6       13       8       (4 )

Surrenders, benefits and product charges

    (16 )     (12 )     (9 )     (6 )     (3 )
                                         

Account value, net of reinsurance, end of period

    1,235       911       747       634       540  
                                         

Traditional Variable Annuities

                  

Account value, net of reinsurance, beginning of period

  $ 1,182     $ 1,048     $ 902     $ 747     $ 632  

Deposits

    132       123       137       145       143  

Interest credited and investment performance

    78       32       35       29       (13 )

Surrenders, benefits and product charges

    (32 )     (21 )     (26 )     (19 )     (15 )
                                         

Account value, net of reinsurance, end of period

    1,360       1,182       1,048       902       747  
                                         

Variable Life Insurance

                  

Account value, beginning of the period

    363       355       347       335       345  

Deposits

    9       8       7       11       8  

Interest credited and investment performance

    18       12       13       11       (11 )

Surrenders, benefits and product charges

    (13 )     (12 )     (12 )     (10 )     (7 )
                                         

Account value, end of period

  $ 377     $ 363     $ 355     $ 347     $ 335  
                                         

Third Party Assets

                  

Private Asset Management

                  

Account value, beginning of the period

  $ 3,352     $ 3,137     $ 2,907     $ 2,753     $ 2,775  

Deposits

    370       275       242       224       212  

Interest credited and investment performance

    169       67       120       44       (94 )

Surrenders, benefits and product charges

    (135 )     (127 )     (132 )     (114 )     (140 )
                                         

Account value, end of period

    3,756       3,352       3,137       2,907       2,753  
                                         

Genworth Financial Advisors

                  

Account value, beginning of the period

    1,828       1,640       1,428       1,293       1,198  

Deposits

    212       198       187       135       112  

Interest credited and investment performance

    85       5       40       14       (2 )

Surrenders, benefits and product charges

    (57 )     (15 )     (15 )     (14 )     (15 )
                                         

Account value, end of period

    2,068       1,828       1,640       1,428       1,293  
                                         

Total Third Party Assets

    5,824       5,180       4,777       4,335       4,046  
                                         

Total Fee-Based Products Assets Under Management

  $ 8,796     $ 7,636     $ 6,927     $ 6,218     $ 5,668  
                                         

Assets Under Management, net of reinsurance

  $ 40,500     $ 39,511     $ 39,010     $ 37,173     $ 36,358  
                                         
                                         

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

Assets Under Management—Retirement Income and Investments (continued)

(amounts in millions)

 

     2006     2005  
     Q1     Q4     Q3     Q2     Q1  

Reinsured products

                  

Account value, beginning of period

  $ 21,004     $ 21,293     $ 21,542     $ 21,789     $ 22,291  

Deposits

    11       7       15       32       37  

Interest credited and investment performance

    643       416       496       433       60  

Surrenders, benefits and product charges

    (841 )     (712 )     (760 )     (712 )     (599 )
                                         

Account value, end of period

  $ 20,817     $ 21,004     $ 21,293     $ 21,542     $ 21,789  
                                         
                                         

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Institutional Assets Under Management by Contract Type—Retirement Income and Investments

(amounts in millions)

 

      2006    2005
      Q1    Q4    Q3    Q2    Q1

Spread-Based Institutional Products

                     

Guaranteed Investment Contracts (GICs)

   $ 2,849    $ 3,142    $ 3,217    $ 3,264    $ 3,302

Funding agreements backing notes

     4,270      3,957      4,054      3,172      3,381

Funding agreements

     2,647      2,678      2,727      2,726      2,725
                                    
     $ 9,766    $ 9,777    $ 9,998    $ 9,162    $ 9,408
                                    
 

Funding agreements by liquidity provisions:

                     

90 day

   $ 425    $ 558    $ 858    $ 1,108    $ 1,308

180 day

     450      450      550      350      150

No put

     1,485      1,385      1,035      985      1,010

13 month rolling maturity

     275      275      275      275      250

Accrued interest

     12      10      9      8      7
                                    

Total funding agreements

   $ 2,647    $ 2,678    $ 2,727    $ 2,726    $ 2,725
                                    
                                    

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Selected Key Performance Measures—U.S. Mortgage Insurance

(dollar amounts in millions)

 

      2006      2005  
      Q1      Q4      Q3      Q2      Q1  

Primary Insurance In-force

   $ 100,500      $ 100,200      $ 101,900      $ 104,300      $ 106,000  
 

New Insurance Written

   $ 6,800      $ 6,700      $ 7,200      $ 7,200      $ 5,700  
 

Net Premiums Written

   $ 115      $ 112      $ 112      $ 111      $ 109  
 

Loss Ratio (a)

     16 %      45 %      24 %      22 %      14 %
 

Expense Ratio (b)

     35 %      42 %      55 %      42 %      37 %
 

New Risk Written

                       

Flow

   $ 1,404      $ 1,667      $ 1,820      $ 1,713      $ 1,263  

Bulk

     102        2        10        19        9  
                                              

Total Primary

     1,506        1,669        1,830        1,732        1,272  

Pool

     2        2        —          —          —    
                                              

Total New Risk Written

   $ 1,508      $ 1,671      $ 1,830      $ 1,732      $ 1,272  
                                              
 

Risk In-force

                       

Flow

   $ 21,328      $ 21,375      $ 21,500      $ 21,848      $ 22,103  

Bulk

     460        363        370        369        284  
                                              

Total Primary

     21,788        21,738        21,870        22,217        22,387  

Pool

     516        554        590        643        682  
                                              

Total Risk In-force

   $ 22,304      $ 22,292      $ 22,460      $ 22,860      $ 23,069  
                                              
                                              

(a) The ratio of incurred losses and loss adjustment expense to net premiums earned.

 

(b) The ratio of an insurer's general expenses to net premiums written. In our business, general expenses consist of acquisition and insurance expenses, net of deferrals, and amortization of DAC and intangibles.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Selected Key Performance Measures—Mortgage Insurance, U.S. Only

(dollar amounts in millions)

 

     2006     2005  
     Q1     Q4     Q3     Q2     Q1  

Risk in-force by Credit Quality

                

Flow by FICO Scores >619 (%)

  92 %   92 %   92 %   92 %   92 %

Flow by FICO Scores 575-619

  6 %   6 %   6 %   6 %   6 %

Flow by FICO Scores <575

  2 %   2 %   2 %   2 %   2 %
 

Bulk by FICO Scores >619

  94 %   96 %   95 %   95 %   92 %

Bulk by FICO Scores 575-619

  4 %   2 %   3 %   3 %   4 %

Bulk by FICO Scores <575

  2 %   2 %   2 %   2 %   4 %
 

Primary A minus and sub-prime

  10.6 %   10.4 %   10.1 %   9.9 %   9.9 %
 

Primary Loans

                

Primary total loans in force

  740,562     744,970     763,988     786,959     804,839  

Primary total loans in default

  23,127     27,391     24,478     23,613     24,376  

Primary loans total default rate

  3.1 %   3.7 %   3.2 %   3.0 %   3.0 %
 

Flow loans in default

  22,070     26,163     23,284     22,392     22,891  

Flow loans default rate

  3.5 %   4.1 %   3.5 %   3.3 %   3.3 %
 

Bulk loans in default

  1,057     1,228     1,194     1,221     1,485  

Bulk loans default rate

  1.0 %   1.2 %   1.1 %   1.1 %   1.4 %
 

A minus and sub-prime loans in default

  6,064     7,072     6,420     5,930     6,058  

A minus and sub-prime loans default rate

  8.8 %   10.5 %   9.6 %   8.9 %   8.9 %
 

Pool Loans

                

Pool loans in default

  500     597     542     597     648  

Pool loans default rate

  2.7 %   3.1 %   2.7 %   2.8 %   2.7 %
 

Claims Paid

                

Primary Claims Paid (includes LAE)

  30.6     33.8     34.0     37.9     39.6  

Pool Claims Paid (includes LAE)

  0.1     0.1     0.0     0.2     0.1  

Primary Average Claim Severity

  96 %   95 %   94 %   95 %   95 %
 

Other Measures

                

Flow Persistency (a)

  72 %   68 %   59 %   63 %   66 %

Gross written premiums ceded to captives/total gross written premiums

  24 %   24 %   24 %   24 %   25 %

Risk to capital ratio (b)

  8.1:1     8.2:1     8.6:1     8.9:1     9.4:1  

(a) Excludes bulk transactions and the effect of periodic reconciliations involving single premium mortgage insurance. Including the effect of the periodic reconciliations, flow persistency would be 71% and 65% for the three months ended March 31, 2006 and December 31, 2005, respectively. All other periods shown were unaffected.

 

(b) Certain states limit a private mortgage insurer's risk in-force to 25 times the total of the insurer's policyholders' surplus plus the statutory contingent reserve, commonly known as the "risk to capital" requirement. The risk to capital ratio for our U.S. mortgage insurance business was computed as of the beginning of the period indicated.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Selected Key Performance Measures—International Mortgage Insurance

(dollar amounts in millions)

 

     2006     2005  
     Q1     Q4     Q3     Q2     Q1  

Primary Insurance In-force

                  

Canada

  $ 92,800     $ 89,300     $ 81,000     $ 71,500     $ 77,100  

Australia

    133,600       127,300       123,800       114,900       110,800  

Europe and Rest of World

    30,400       27,600       26,200       23,800       22,000  
                                         

Total International primary insurance in force

  $ 256,800     $ 244,200     $ 231,000     $ 210,200     $ 209,900  
                                         

New Insurance Written

                  

Canada

  $ 4,000     $ 7,400     $ 5,900     $ 4,600     $ 3,300  

Australia

    12,400       10,400       12,200       11,400       9,200  

Europe and Rest of World

    4,000       4,100       2,900       5,400       1,700  
                                         

Total International new insurance written

  $ 20,400     $ 21,900     $ 21,000     $ 21,400     $ 14,200  
                                         

Total Risk In-force (a)

  $ 82,800     $ 79,000     $ 74,500     $ 67,800     $ 68,000  
 

Net Premiums Written

  $ 204     $ 212     $ 204     $ 168     $ 137  
 

Loss Ratio (b)

                  

Canada

    16 %     12 %     10 %     13 %     15 %

Australia

    29 %     20 %     5 %     13 %     -14 %

Europe and Rest of World

    14 %     9 %     9 %     11 %     17 %

Total International Loss Ratio

    21 %     14 %     8 %     13 %     6 %
 

Expense Ratio (c)

                  

Canada

    23 %     16 %     15 %     17 %     19 %

Australia

    14 %     13 %     14 %     16 %     15 %

Europe and Rest of World

    41 %     50 %     52 %     90 %     79 %

Total International Expense Ratio

    21 %     19 %     18 %     24 %     22 %

(a) Our businesses in Australia, New Zealand and Canada currently provide 100% coverage on the majority of the loans we insure in those markets. For the purpose of representing our risk in-force, we have computed an “Effective Risk In-force” amount, which recognizes that the loss on any particular loan will be reduced by the net proceeds received upon sale of the property. Effective risk in-force has been calculated by applying to insurance in force a factor that represents our highest expected average per-claim payment for any one underwriting year over the life of our businesses in Australia, New Zealand and Canada. For the period ending March 31, 2005 through the period ending March 31, 2006, this factor was 35%.

 

(b) The ratio of incurred losses and loss adjustment expense to net premiums earned.

 

(c) The ratio of an insurer’s general expenses to net premiums written. In our business, general expenses consist of acquisition and insurance expenses, net of deferrals, and amortization of DAC and intangibles.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

CORPORATE INFORMATION

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Industry Ratings

Our principal life insurance subsidiaries are rated by A.M. Best, S&P, Moody’s and Fitch as follows:

 

Company

     A.M. Best rating      S&P rating      Moody’s rating      Fitch rating

American Mayflower Life Insurance Company of New York

     A+      AA-      Aa3      AA-

Federal Home Life Insurance Company

     A+      Not rated      Aa3      AA-

First Colony Life Insurance Company

     A+      AA-      Aa3      AA-

Genworth Life Insurance Company of New York

     A+      AA-      Aa3      AA-

Genworth Life and Annuity Insurance Company

     A+      AA-      Aa3      AA-

Genworth Life and Annuity Insurance Company (short term rating)

     Not rated      A-1+      P-1      Not rated

Genworth Life and Health Insurance Company

     A      AA-      Not rated      Not rated

Genworth Life Insurance Company

     A+      AA-      Aa3      AA-

Genworth Life Insurance Company (short term rating)

     Not rated      A-1+      P-1      Not rated

Our mortgage insurance subsidiaries are rated by S&P, Moody’s and Fitch as follows:

 

Company (a)

     S&P rating      Moody’s rating      Fitch rating

Genworth Mortgage Insurance Corporation

     AA      Aa2      AA

Genworth Financial Mortgage Insurance Pty. Limited

     AA      Aa2      AA

Genworth Financial Mortgage Insurance Limited

     AA      Aa2      AA

Genworth Residential Mortgage Insurance Corporation of NC

     AA      Aa2      AA

(a) Our Canadian mortgage insurance company, Genworth Financial Mortgage Insurance Company Canada, is not rated by any of the rating agencies shown above, but is rated “AA” by Dominion Bond Rating Service.

The A.M. Best, S&P, Moody’s and Fitch ratings are not designed to be, and do not serve as, measures of protection or valuation offered to investors. These financial strength ratings should not be relied on with respect to making an investment in our securities.

A.M. Best states that its ‘‘A+’’ (Superior) rating is assigned to those companies that have, in its opinion, a superior ability to meet their ongoing obligations to policyholders. The ‘‘A+’’ (Superior) rating is the second-highest of fifteen ratings assigned by A.M. Best, which range from ‘‘A++’’ to ‘‘S’’.

 

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GENWORTH FINANCIAL, INC.

1Q 2006 FINANCIAL SUPPLEMENT

 

Industry Ratings (continued)

Moody’s states that insurance companies rated “Aa” (Excellent) offer excellent financial security. Moody’s states that companies in this group constitute what are generally known as high-grade companies. The “Aa” range is the second-highest of nine financial strength rating ranges assigned by Moody’s, which range from “Aaa” to “C.” Numeric modifiers are used to refer to the ranking within the group, with 1 being the highest and 3 being the lowest. Accordingly, the “Aa2” and “Aa3” ratings are the third- and fourth-highest of Moody’s 21 ratings categories. Short-term rating “P1” is the highest rating and shows superior ability for repayment of short-term debt obligations.

Fitch states that ‘‘AA’’ (Very Strong) rated insurance companies are viewed as possessing very strong capacity to meet policyholder and contract obligations. Risk factors are modest, and the impact of any adverse business and economic factors is expected to be very small. The ‘‘AA’’ rating category is the second-highest of eight financial strength rating categories, which range from ‘‘AAA’’ to ‘‘D.’’ The symbol (+) or (-) may be appended to a rating to indicate the relative position of a credit within a rating category. These suffixes are not added to ratings in the ‘‘AAA’’ category or to ratings below the ‘‘CCC’’ category. Accordingly, the ‘‘AA’’ and ‘‘AA-’’ ratings are the third- and fourth-highest of Fitch’s 24 ratings categories.

Dominion Bond Rating states that long-term debt rated AA is of superior credit quality, and protection of interest and principal is considered high. In many cases they differ from long-term debt rated AAA only to a small degree. Given the extremely restrictive definition DBRS has for the AAA category, entities rated AA are also considered to be strong credits, typically exemplifying above-average strength in key areas of consideration and unlikely to be significantly affected by reasonably foreseeable events.

A.M. Best, S&P, Moody’s, Fitch and Dominion Bond Rating review their ratings periodically and we cannot assure you that we will maintain our current ratings in the future. Other agencies may also rate our company or our insurance subsidiaries on a solicited or an unsolicited basis.

About Genworth Financial

Genworth is a leading insurance holding company, serving the lifestyle protection, retirement income, investment and mortgage insurance needs of more than 15 million customers, and has operations in 24 countries, including the U.S., Canada, Australia, the U.K. and more than a dozen other European countries. For more information, visit www.genworth.com

Inquiries:

Genworth Financial, Inc.

Jean Peters, 804-662-2693

jean.peters@genworth.com

Alicia Charity, 804-662-2248

alicia.charity@genworth.com

 

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