Exhibit 99.2
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Table of Contents |
Page | |
Investor Letter |
3 | |
Use of Non-GAAP Measures and Selected Operating Performance Measures |
4 | |
Financial Highlights |
5 | |
First Quarter Results |
||
Net Income (Loss) |
7 | |
Net Operating Income (Loss) by Segment |
8 | |
Consolidated Net Income (Loss) by Quarter |
9 | |
Net Operating Income (Loss) by Segment by Quarter |
10 | |
Consolidated Balance Sheets |
11-12 | |
Consolidated Balance Sheets by Segment |
13-14 | |
Deferred Acquisition Costs Rollforward |
15 | |
Quarterly Results by Segment |
||
Net Operating Income (Loss) by Segment |
17-18 | |
Net Operating Income and SalesRetirement and Protection |
20-29 | |
Net Operating Income and SalesInternational |
31-41 | |
Net Operating Loss and SalesU.S. Mortgage Insurance |
43-52 | |
Net Operating Income (Loss)Corporate and Other |
54 | |
Additional Financial Data |
||
Investments Summary |
56 | |
Fixed Maturity Securities Summary |
57 | |
Additional Information on Mortgage-Backed and Asset-Backed Securities By Vintage |
58 | |
Commercial Mortgage Loans Summary |
59-60 | |
General Account GAAP Net Investment Income Yields |
61 | |
Net Investment Gains (Losses), Net of Taxes and Other AdjustmentsDetail |
62 | |
Reconciliations of Non-GAAP Measures |
||
Reconciliation of Operating Return On Equity (ROE) |
64 | |
Reconciliation of Expense Ratio |
65 | |
Reconciliation of Core Premiums |
66 | |
Reconciliation of Core Yield |
67 | |
Corporate Information |
||
Industry Ratings |
69-70 |
Note:
Unless otherwise noted, references in this financial supplement to net income (loss), net income (loss) per share, net operating income (loss), net operating income (loss) per share, book value and book value per common share should be read as net income (loss) available to Genworth Financial, Inc.s common stockholders, net income (loss) available to Genworth Financial, Inc.s common stockholders per share, net operating income (loss) available to Genworth Financial, Inc.s common stockholders, net operating income (loss) available to Genworth Financial, Inc.s common stockholders per share, book value available to Genworth Financial, Inc.s common stockholders and book value available to Genworth Financial, Inc.s common stockholders per share, respectively.
2
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Dear Investor,
In the U.S. Mortgage Insurance segment, the company provided additional details related to the number of delinquencies associated with the companys primary mortgage insurance business. This information can be found on page 44.
Once again, thank you for your continued interest in Genworth Financial.
Please feel free to call with any questions or comments.
Regards,
Alicia Charity
Senior Vice President
Investor Relations
804 662.2248
3
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Use of Non-GAAP Measures
This financial supplement includes the non-GAAP(1) financial measure entitled net operating income (loss). The chief operating decision maker evaluates segment performance and allocates resources on the basis of net operating income (loss). The company defines net operating income (loss) as income (loss) from continuing operations excluding net income attributable to noncontrolling interests, after-tax net investment gains (losses) and other adjustments and infrequent or unusual non-operating items. The company excludes net investment gains (losses) and infrequent or unusual non-operating items because the company does not consider them to be related to the operating performance of the companys segments and Corporate and Other activities. A significant component of net investment gains (losses) is the result of impairments, size and the timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) are often subject to the companys discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Infrequent or unusual non-operating items are also excluded from net operating income (loss) if, in the companys opinion, they are not indicative of overall trends. While some of these items may be significant components of net income (loss) available to Genworth Financial, Inc.s common stockholders in accordance with GAAP, the company believes that net operating income (loss), and measures that are derived from or incorporate net operating income (loss), are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. However, net operating income (loss) is not a substitute for net income (loss) available to Genworth Financial, Inc.s common stockholders determined in accordance with GAAP. In addition, the companys definition of net operating income (loss) may differ from the definitions used by other companies. There were no infrequent or unusual non-operating items excluded from net operating income (loss) available to Genworth Financial, Inc.s common stockholders during the periods other than a $106 million tax benefit related to separation from the companys former parent recorded in the first quarter of 2010. The table on page 8 of this financial supplement reflects net operating income (loss) as determined in accordance with accounting guidance related to segment reporting, and a reconciliation of net operating income (loss) of the companys segments and Corporate and Other activities to net income (loss) available to Genworth Financial, Inc.s common stockholders for the three months ended March 31, 2010 and 2009. The financial supplement includes other non-GAAP measures management believes enhances the understanding and comparability of performance by highlighting underlying business activity and profitability drivers. These additional non-GAAP measures are on pages 64 through 67 of this financial supplement.
Selected Operating Performance Measures
This financial supplement contains selected operating performance measures including sales, assets under management and insurance in-force or risk in-force which are commonly used in the insurance and investment industries as measures of operating performance.
Management regularly monitors and reports the sales metrics as a measure of volume of new and renewal business generated in a period. Sales refer to (1) annualized first-year premiums for term life, long-term care and Medicare supplement insurance; (2) new and additional premiums/deposits for universal life insurance, linked-benefits, spread-based and variable products; (3) gross and net flows, which represent gross flows less redemptions, for the wealth management business; (4) written premiums and deposits, gross of ceded reinsurance and cancellations, and premium equivalents, where the company earns a fee for administrative services only business, for lifestyle protection insurance business; (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 the Mexican insurance 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, gross and net flows, written premiums, premium equivalents and new insurance written to be measures of the companys operating performance because they represent a measure of new sales of insurance policies or contracts during a specified period, rather than measures of the companys revenues or profitability during that period.
Management regularly monitors and reports assets under management for the wealth management business, insurance in-force and risk in-force. Assets under management for the wealth management business represent third-party assets under management that are not consolidated in the financial statements. Insurance in-force for the life insurance, international and U.S. mortgage insurance businesses is a measure of the aggregate face value of outstanding insurance policies as of the respective reporting date. Risk in-force for the international and U.S. mortgage insurance businesses is a measure that recognizes that the loss on any particular mortgage loan will be reduced by the net proceeds received upon sale of the underlying property. The company considers assets under management for its wealth management business, insurance in-force and risk in-force to be measures of the companys operating performance because they represent measures of the size of the business at a specific date, rather than measures of the companys revenues or profitability during that period.
This financial supplement also includes a metric related to loss mitigation activities for the U.S. mortgage insurance business. The company defines loss mitigation activities as rescissions, cancellations, borrower loan modifications, repayment plans, lender- and borrower-titled pre-sales and other loan workouts and claim mitigation actions. Estimated savings related to rescissions are the reduction in carried loss reserves, net of premium refunds and reinstatement of prior rescissions. Estimated savings related to loan modifications and other cure related loss mitigation actions represent the reduction in carried loss reserves. For non-cure related actions, including pre-sales, the estimated savings represent the difference between the full claim obligation and the actual amount paid. The company believes that this metric helps to enhance the understanding of the operating performance of the U.S. mortgage insurance business.
These operating measures enable the company to compare its operating performance across periods without regard to revenues or profitability related to policies or contracts sold in prior periods or from investments or other sources.
(1) | U.S. Generally Accepted Accounting Principles |
4
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Financial Highlights
(amounts in millions, except per share data)
Balance Sheet Data |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
|||||||||||||||
Total Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss) |
$ | 12,544 | $ | 12,440 | $ | 12,394 | $ | 11,839 | $ | 11,527 | ||||||||||
Total accumulated other comprehensive income (loss) |
347 | (164 | ) | 23 | (1,869 | ) | (3,298 | ) | ||||||||||||
Total Genworth Financial, Inc.s stockholders equity |
$ | 12,891 | $ | 12,276 | $ | 12,417 | $ | 9,970 | $ | 8,229 | ||||||||||
Book value per common share |
$ | 26.36 | $ | 25.12 | $ | 25.42 | $ | 23.01 | $ | 19.00 | ||||||||||
Book value per common share, excluding accumulated other comprehensive income (loss) |
$ | 25.65 | $ | 25.46 | $ | 25.37 | $ | 27.33 | $ | 26.61 | ||||||||||
Common shares outstanding as of the balance sheet date |
489.1 | 488.6 | 488.5 | 433.2 | 433.2 | |||||||||||||||
Twelve months ended | ||||||||||||||||||||
Twelve Month Rolling Average ROE |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
|||||||||||||||
GAAP Basis ROE |
1.5 | % | -3.8 | % | -6.8 | % | -9.1 | % | -9.5 | % | ||||||||||
Operating ROE(1) |
2.5 | % | 1.6 | % | -0.9 | % | 0.3 | % | 2.0 | % | ||||||||||
Three months ended | ||||||||||||||||||||
Quarterly Average ROE |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
|||||||||||||||
GAAP Basis ROE |
5.7 | % | 1.3 | % | 0.6 | % | -1.7 | % | -16.0 | % | ||||||||||
Operating ROE(1) |
3.7 | % | 3.0 | % | 2.7 | % | 0.3 | % | 0.5 | % | ||||||||||
Basic and Diluted Shares |
Three months ended March 31, 2010 |
|||||||||||||||||||
Weighted-average shares used in basic earnings per common share calculations |
488.8 | |||||||||||||||||||
Potentially dilutive securities: |
||||||||||||||||||||
Stock options, restricted stock units and stock appreciation rights |
4.7 | |||||||||||||||||||
Weighted-average shares used in diluted earnings per common share calculations |
493.5 | |||||||||||||||||||
(1) | See page 64 herein for a reconciliation of GAAP Basis ROE to Operating ROE. |
5
First Quarter Results
6
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Income (Loss)
(amounts in millions)
Three months ended March 31, |
||||||||
2010 | 2009 | |||||||
REVENUES: |
||||||||
Premiums |
$ | 1,470 | $ | 1,502 | ||||
Net investment income |
765 | 711 | ||||||
Net investment gains (losses) |
(70 | ) | (770 | ) | ||||
Insurance and investment product fees and other |
256 | 291 | ||||||
Total revenues |
2,421 | 1,734 | ||||||
BENEFITS AND EXPENSES: |
||||||||
Benefits and other changes in policy reserves |
1,315 | 1,508 | ||||||
Interest credited |
213 | 275 | ||||||
Acquisition and operating expenses, net of deferrals |
475 | 441 | ||||||
Amortization of deferred acquisition costs and intangibles |
184 | 247 | ||||||
Interest expense |
115 | 96 | ||||||
Total benefits and expenses |
2,302 | 2,567 | ||||||
INCOME (LOSS) BEFORE INCOME TAXES |
119 | (833 | ) | |||||
Benefit for income taxes |
(93 | ) | (364 | ) | ||||
Effective tax rate |
-78.2 | % | 43.7 | % | ||||
NET INCOME (LOSS) |
212 | (469 | ) | |||||
Less: net income attributable to noncontrolling interests |
34 | | ||||||
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
$ | 178 | $ | (469 | ) | |||
7
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income (Loss) by Segment
(amounts in millions, except per share amounts)
Three months ended March 31, |
||||||||||
2010 | 2009 | |||||||||
Retirement and Protection: |
||||||||||
Wealth Management |
$ | 11 | $ | 6 | ||||||
Retirement Income |
34 | (47 | ) | |||||||
Life Insurance |
37 | 38 | ||||||||
Long-Term Care |
40 | 41 | ||||||||
Total Retirement and Protection |
122 | 38 | ||||||||
International: |
||||||||||
International Mortgage Insurance |
Canada(1) |
41 | 66 | |||||||
Australia |
43 | 29 | ||||||||
Other |
(5 | ) | (5 | ) | ||||||
Lifestyle Protection Insurance |
12 | 11 | ||||||||
Total International |
91 | 101 | ||||||||
U.S. Mortgage Insurance |
(36 | ) | (135 | ) | ||||||
Corporate and Other |
(63 | ) | 10 | |||||||
NET OPERATING INCOME |
114 | 14 | ||||||||
ADJUSTMENTS TO NET OPERATING INCOME: |
||||||||||
Net investment gains (losses), net of taxes and other adjustments(2) |
(42 | ) | (483 | ) | ||||||
Net tax benefit related to separation from the companys former parent |
106 | | ||||||||
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
178 | (469 | ) | |||||||
Add: net income attributable to noncontrolling interests |
34 | | ||||||||
NET INCOME (LOSS) |
$ | 212 | $ | (469 | ) | |||||
Earnings (Loss) Per Share Data: |
||||||||||
Net income (loss) available to Genworth Financial, Inc.s common stockholders per common share |
||||||||||
Basic |
$ | 0.36 | $ | (1.08 | ) | |||||
Diluted |
$ | 0.36 | $ | (1.08 | ) | |||||
Net operating income per common share |
||||||||||
Basic |
$ | 0.23 | $ | 0.03 | ||||||
Diluted |
$ | 0.23 | $ | 0.03 | ||||||
Weighted-average shares outstanding |
||||||||||
Basic |
488.8 | 433.2 | ||||||||
Diluted |
493.5 | 433.2 |
(1) | Adjusted for 42.5% owned by noncontrolling interests beginning in the third quarter of 2009 following the initial public offering of the Canadian mortgage insurance business. The following table shows Canada net operating income assuming 100% ownership and then adjusts for the portion related to noncontrolling interests. |
Three months
ended March 31, | ||||||
2010 | 2009 | |||||
Canadas net operating income |
$ | 74 | $ | 66 | ||
Less: net operating income attributable to noncontrolling interests |
33 | | ||||
Canadas net operating income available to Genworths common stockholders |
$ | 41 | $ | 66 | ||
(2) | See page 62 for details on net investment gains (losses), net of taxes and other adjustments. |
8
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Consolidated Net Income (Loss) by Quarter
(amounts in millions, except per share amounts)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 1,470 | $ | 1,523 | $ | 1,492 | $ | 1,502 | $ | 1,502 | $ | 6,019 | ||||||||||||
Net investment income |
765 | 782 | 759 | 781 | 711 | 3,033 | ||||||||||||||||||
Net investment gains (losses) |
(70 | ) | (96 | ) | (122 | ) | (53 | ) | (770 | ) | (1,041 | ) | ||||||||||||
Insurance and investment product fees and other |
256 | 252 | 262 | 253 | 291 | 1,058 | ||||||||||||||||||
Total revenues |
2,421 | 2,461 | 2,391 | 2,483 | 1,734 | 9,069 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
1,315 | 1,368 | 1,450 | 1,492 | 1,508 | 5,818 | ||||||||||||||||||
Interest credited |
213 | 221 | 225 | 263 | 275 | 984 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
475 | 503 | 484 | 456 | 441 | 1,884 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
184 | 180 | 143 | 212 | 247 | 782 | ||||||||||||||||||
Interest expense |
115 | 87 | 96 | 114 | 96 | 393 | ||||||||||||||||||
Total benefits and expenses |
2,302 | 2,359 | 2,398 | 2,537 | 2,567 | 9,861 | ||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
119 | 102 | (7 | ) | (54 | ) | (833 | ) | (792 | ) | ||||||||||||||
Provision (benefit) for income taxes |
(93 | ) | 27 | (52 | ) | (4 | ) | (364 | ) | (393 | ) | |||||||||||||
NET INCOME (LOSS) |
212 | 75 | 45 | (50 | ) | (469 | ) | (399 | ) | |||||||||||||||
Less: net income attributable to noncontrolling interests |
34 | 35 | 26 | | | 61 | ||||||||||||||||||
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S |
$ | 178 | $ | 40 | $ | 19 | $ | (50 | ) | $ | (469 | ) | $ | (460 | ) | |||||||||
Earnings (Loss) Per Share Data: |
||||||||||||||||||||||||
Net income (loss) available to Genworth Financial, Inc.s common stockholders per common share |
||||||||||||||||||||||||
Basic |
$ | 0.36 | $ | 0.08 | $ | 0.04 | $ | (0.11 | ) | $ | (1.08 | ) | $ | (1.02 | ) | |||||||||
Diluted |
$ | 0.36 | $ | 0.08 | $ | 0.04 | $ | (0.11 | ) | $ | (1.08 | ) | $ | (1.02 | ) | |||||||||
Weighted-average shares outstanding |
||||||||||||||||||||||||
Basic |
488.8 | 488.6 | 448.9 | 433.2 | 433.2 | 451.1 | ||||||||||||||||||
Diluted |
493.5 | 492.2 | 451.6 | 433.2 | 433.2 | 451.1 |
9
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income (Loss) by Segment by Quarter
(amounts in millions, except per share amounts)
2010 | 2009 | |||||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||
Retirement and Protection: |
||||||||||||||||||||||||||
Wealth Management |
$ | 11 | $ | 7 | $ | 8 | $ | 7 | $ | 6 | $ | 28 | ||||||||||||||
Retirement Income |
34 | 30 | 9 | 16 | (47 | ) | 8 | |||||||||||||||||||
Life Insurance |
37 | 43 | 78 | 58 | 38 | 217 | ||||||||||||||||||||
Long-Term Care |
40 | 49 | 39 | 42 | 41 | 171 | ||||||||||||||||||||
Total Retirement and Protection |
122 | 129 | 134 | 123 | 38 | 424 | ||||||||||||||||||||
International: |
||||||||||||||||||||||||||
International Mortgage Insurance |
Canada | 41 | 37 | 45 | 58 | 66 | 206 | |||||||||||||||||||
Australia | 43 | 45 | 42 | 32 | 29 | 148 | ||||||||||||||||||||
Other | (5 | ) | (4 | ) | (9 | ) | (7 | ) | (5 | ) | (25 | ) | ||||||||||||||
Lifestyle Protection Insurance |
12 | 23 | 18 | 4 | 11 | 56 | ||||||||||||||||||||
Total International |
91 | 101 | 96 | 87 | 101 | 385 | ||||||||||||||||||||
U.S. Mortgage Insurance |
(36 | ) | (74 | ) | (116 | ) | (134 | ) | (135 | ) | (459 | ) | ||||||||||||||
Corporate and Other |
(63 | ) | (62 | ) | (33 | ) | (67 | ) | 10 | (152 | ) | |||||||||||||||
NET OPERATING INCOME |
114 | 94 | 81 | 9 | 14 | 198 | ||||||||||||||||||||
ADJUSTMENTS TO NET OPERATING INCOME: |
||||||||||||||||||||||||||
Net investment gains (losses), net of taxes and other adjustments |
(42 | ) | (54 | ) | (62 | ) | (59 | ) | (483 | ) | (658 | ) | ||||||||||||||
Net tax benefit related to separation from the companys former parent |
106 | | | | | | ||||||||||||||||||||
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S |
178 | 40 | 19 | (50 | ) | (469 | ) | (460 | ) | |||||||||||||||||
Add: net income attributable to noncontrolling interests |
34 | 35 | 26 | | | 61 | ||||||||||||||||||||
NET INCOME (LOSS) |
$ | 212 | $ | 75 | $ | 45 | $ | (50 | ) | $ | (469 | ) | $ | (399 | ) | |||||||||||
Earnings (Loss) Per Share Data: |
||||||||||||||||||||||||||
Net income (loss) available to Genworth Financial, Inc.s common stockholders per common share |
||||||||||||||||||||||||||
Basic |
$ | 0.36 | $ | 0.08 | $ | 0.04 | $ | (0.11 | ) | $ | (1.08 | ) | $ | (1.02 | ) | |||||||||||
Diluted |
$ | 0.36 | $ | 0.08 | $ | 0.04 | $ | (0.11 | ) | $ | (1.08 | ) | $ | (1.02 | ) | |||||||||||
Net operating income per common share |
||||||||||||||||||||||||||
Basic |
$ | 0.23 | $ | 0.19 | $ | 0.18 | $ | 0.02 | $ | 0.03 | $ | 0.44 | ||||||||||||||
Diluted |
$ | 0.23 | $ | 0.19 | $ | 0.18 | $ | 0.02 | $ | 0.03 | $ | 0.44 | ||||||||||||||
Weighted-average shares outstanding |
||||||||||||||||||||||||||
Basic |
488.8 | 488.6 | 448.9 | 433.2 | 433.2 | 451.1 | ||||||||||||||||||||
Diluted |
493.5 | 492.2 | 451.6 | 433.2 | 433.2 | 451.1 |
10
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Consolidated Balance Sheets
(amounts in millions)
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 | ||||||||||||
ASSETS |
||||||||||||||||
Investments: |
||||||||||||||||
Fixed maturity securities available-for-sale, at fair value |
$ | 52,040 | $ | 49,752 | $ | 47,746 | $ | 44,322 | $ | 41,319 | ||||||
Equity securities available-for-sale, at fair value |
179 | 159 | 164 | 252 | 221 | |||||||||||
Commercial mortgage loans |
7,336 | 7,499 | 7,704 | 7,872 | 8,023 | |||||||||||
Restricted commercial mortgage loans related to securitization entities(1) |
552 | | | | | |||||||||||
Policy loans |
1,408 | 1,403 | 1,408 | 2,087 | 1,842 | |||||||||||
Other invested assets |
3,972 | 4,702 | 4,949 | 5,305 | 6,080 | |||||||||||
Restricted other invested assets related to securitization entities(1) |
385 | | | | | |||||||||||
Total investments |
65,872 | 63,515 | 61,971 | 59,838 | 57,485 | |||||||||||
Cash and cash equivalents |
3,466 | 5,002 | 7,144 | 5,374 | 7,064 | |||||||||||
Accrued investment income |
775 | 691 | 717 | 639 | 821 | |||||||||||
Deferred acquisition costs |
7,252 | 7,341 | 7,414 | 7,591 | 7,716 | |||||||||||
Intangible assets |
863 | 934 | 961 | 1,079 | 1,142 | |||||||||||
Goodwill |
1,319 | 1,324 | 1,324 | 1,325 | 1,314 | |||||||||||
Reinsurance recoverable |
17,333 | 17,332 | 17,308 | 17,412 | 17,398 | |||||||||||
Other assets |
934 | 954 | 1,141 | 967 | 998 | |||||||||||
Deferred tax asset |
18 | 92 | 140 | 996 | 1,631 | |||||||||||
Separate account assets |
11,261 | 11,002 | 10,712 | 9,605 | 8,576 | |||||||||||
Total assets |
$ | 109,093 | $ | 108,187 | $ | 108,832 | $ | 104,826 | $ | 104,145 | ||||||
(1) | In the first quarter of 2010, the company began reporting restricted assets related to securitization entities required to be consolidated under a new accounting standard effective January 1, 2010. |
11
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Consolidated Balance Sheets
(amounts in millions)
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Future policy benefits |
$ | 29,686 | $ | 29,469 | $ | 29,251 | $ | 29,016 | $ | 28,763 | ||||||||||
Policyholder account balances |
28,107 | 28,470 | 29,381 | 31,356 | 33,196 | |||||||||||||||
Liability for policy and contract claims |
6,389 | 6,567 | 6,415 | 6,250 | 5,815 | |||||||||||||||
Unearned premiums |
4,571 | 4,714 | 4,808 | 4,734 | 4,482 | |||||||||||||||
Other liabilities |
6,185 | 6,298 | 6,708 | 5,787 | 6,316 | |||||||||||||||
Borrowings related to securitization entities(1) |
551 | | | | | |||||||||||||||
Non-recourse funding obligations |
3,437 | 3,443 | 3,443 | 3,443 | 3,443 | |||||||||||||||
Short-term borrowings |
930 | 930 | 930 | 930 | 930 | |||||||||||||||
Long-term borrowings |
3,638 | 3,641 | 3,457 | 3,484 | 4,131 | |||||||||||||||
Deferred tax liability |
313 | 303 | 282 | 251 | 264 | |||||||||||||||
Separate account liabilities |
11,261 | 11,002 | 10,712 | 9,605 | 8,576 | |||||||||||||||
Total liabilities |
95,068 | 94,837 | 95,387 | 94,856 | 95,916 | |||||||||||||||
Stockholders equity: |
||||||||||||||||||||
Common stock |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Additional paid-in capital |
12,064 | 12,034 | 12,028 | 11,492 | 11,485 | |||||||||||||||
Accumulated other comprehensive income (loss): |
||||||||||||||||||||
Net unrealized investment gains (losses): |
||||||||||||||||||||
Net unrealized gains (losses) on securities not other-than-temporarily impaired |
(652 | ) | (1,151 | ) | (1,121 | ) | (2,748 | ) | (4,095 | ) | ||||||||||
Net unrealized gains (losses) on other-than-temporarily impaired securities |
(208 | ) | (247 | ) | (280 | ) | (275 | ) | | |||||||||||
Net unrealized investment gains (losses) |
(860 | ) | (1,398 | ) | (1,401 | ) | (3,023 | ) | (4,095 | ) | ||||||||||
Derivatives qualifying as hedges |
777 | 802 | 1,013 | 948 | 1,061 | |||||||||||||||
Foreign currency translation and other adjustments |
430 | 432 | 411 | 206 | (264 | ) | ||||||||||||||
Total accumulated other comprehensive income (loss) |
347 | (164 | ) | 23 | (1,869 | ) | (3,298 | ) | ||||||||||||
Retained earnings |
3,179 | 3,105 | 3,065 | 3,046 | 2,741 | |||||||||||||||
Treasury stock, at cost |
(2,700 | ) | (2,700 | ) | (2,700 | ) | (2,700 | ) | (2,700 | ) | ||||||||||
Total Genworth Financial, Inc.s stockholders equity |
12,891 | 12,276 | 12,417 | 9,970 | 8,229 | |||||||||||||||
Noncontrolling interests |
1,134 | 1,074 | 1,028 | | | |||||||||||||||
Total stockholders equity |
14,025 | 13,350 | 13,445 | 9,970 | 8,229 | |||||||||||||||
Total liabilities and stockholders equity |
$ | 109,093 | $ | 108,187 | $ | 108,832 | $ | 104,826 | $ | 104,145 | ||||||||||
(1) | In the first quarter of 2010, the company began reporting borrowings related to securitization entities required to be consolidated under a new accounting standard effective January 1, 2010. |
12
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Consolidated Balance Sheet by Segment
(amounts in millions)
March 31, 2010 | ||||||||||||||||||
Retirement and Protection |
International | U.S. Mortgage Insurance |
Corporate and Other(1) |
Total | ||||||||||||||
ASSETS |
||||||||||||||||||
Cash and investments |
$ | 47,137 | $ | 10,793 | $ | 2,826 | $ | 9,357 | $ | 70,113 | ||||||||
Deferred acquisition costs and intangible assets |
8,493 | 834 | 39 | 68 | 9,434 | |||||||||||||
Reinsurance recoverable |
16,577 | 62 | 693 | 1 | 17,333 | |||||||||||||
Deferred tax and other assets |
(1,587 | ) | 361 | 424 | 1,754 | 952 | ||||||||||||
Separate account assets |
11,261 | | | | 11,261 | |||||||||||||
Total assets |
$ | 81,881 | $ | 12,050 | $ | 3,982 | $ | 11,180 | $ | 109,093 | ||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||
Liabilities: |
||||||||||||||||||
Future policy benefits |
$ | 29,686 | $ | | $ | | $ | | $ | 29,686 | ||||||||
Policyholder account balances |
22,726 | 19 | | 5,362 | 28,107 | |||||||||||||
Liability for policy and contract claims |
3,565 | 798 | 2,016 | 10 | 6,389 | |||||||||||||
Unearned premiums |
544 | 3,921 | 106 | | 4,571 | |||||||||||||
Non-recourse funding obligations |
3,537 | | | (100 | ) | 3,437 | ||||||||||||
Deferred tax and other liabilities |
1,734 | 1,486 | 78 | 3,200 | 6,498 | |||||||||||||
Borrowings and capital securities |
| | | 5,119 | 5,119 | |||||||||||||
Separate account liabilities |
11,261 | | | | 11,261 | |||||||||||||
Total liabilities |
73,053 | 6,224 | 2,200 | 13,591 | 95,068 | |||||||||||||
Stockholders equity: |
||||||||||||||||||
Allocated equity, excluding accumulated other comprehensive income (loss) |
8,228 | 4,170 | 1,812 | (1,666 | ) | 12,544 | ||||||||||||
Allocated accumulated other comprehensive income (loss) |
600 | 522 | (30 | ) | (745 | ) | 347 | |||||||||||
Total Genworth Financial, Inc.s stockholders equity |
8,828 | 4,692 | 1,782 | (2,411 | ) | 12,891 | ||||||||||||
Noncontrolling interests |
| 1,134 | | | 1,134 | |||||||||||||
Total stockholders equity |
8,828 | 5,826 | 1,782 | (2,411 | ) | 14,025 | ||||||||||||
Total liabilities and stockholders equity |
$ | 81,881 | $ | 12,050 | $ | 3,982 | $ | 11,180 | $ | 109,093 | ||||||||
(1) | Includes inter-segment eliminations and non-strategic products. |
13
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Consolidated Balance Sheet by Segment
(amounts in millions)
December 31, 2009 | |||||||||||||||||||
Retirement and Protection |
International | U.S. Mortgage Insurance |
Corporate
and Other(1) |
Total | |||||||||||||||
ASSETS |
|||||||||||||||||||
Cash and investments |
$ | 46,603 | $ | 10,869 | $ | 3,098 | $ | 8,638 | $ | 69,208 | |||||||||
Deferred acquisition costs and intangible assets |
8,599 | 896 | 33 | 71 | 9,599 | ||||||||||||||
Reinsurance recoverable |
16,547 | 72 | 712 | 1 | 17,332 | ||||||||||||||
Deferred tax and other assets |
(1,254 | ) | 306 | 404 | 1,590 | 1,046 | |||||||||||||
Separate account assets |
11,002 | | | | 11,002 | ||||||||||||||
Total assets |
$ | 81,497 | $ | 12,143 | $ | 4,247 | $ | 10,300 | $ | 108,187 | |||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
|||||||||||||||||||
Liabilities: |
|||||||||||||||||||
Future policy benefits |
$ | 29,469 | $ | | $ | | $ | | $ | 29,469 | |||||||||
Policyholder account balances |
22,974 | 21 | | 5,475 | 28,470 | ||||||||||||||
Liability for policy and contract claims |
3,452 | 813 | 2,289 | 13 | 6,567 | ||||||||||||||
Unearned premiums |
558 | 4,050 | 106 | | 4,714 | ||||||||||||||
Non-recourse funding obligations |
3,543 | | | (100 | ) | 3,443 | |||||||||||||
Deferred tax and other liabilities |
1,606 | 1,599 | 51 | 3,345 | 6,601 | ||||||||||||||
Borrowings and capital securities |
| | | 4,571 | 4,571 | ||||||||||||||
Separate account liabilities |
11,002 | | | | 11,002 | ||||||||||||||
Total liabilities |
72,604 | 6,483 | 2,446 | 13,304 | 94,837 | ||||||||||||||
Stockholders equity: |
|||||||||||||||||||
Allocated equity, excluding accumulated other comprehensive income (loss) |
8,478 | 4,086 | 1,848 | (1,972 | ) | 12,440 | |||||||||||||
Allocated accumulated other comprehensive income (loss) |
415 | 500 | (47 | ) | (1,032 | ) | (164 | ) | |||||||||||
Total Genworth Financial, Inc.s stockholders equity |
8,893 | 4,586 | 1,801 | (3,004 | ) | 12,276 | |||||||||||||
Noncontrolling interests |
| 1,074 | | | 1,074 | ||||||||||||||
Total stockholders equity |
8,893 | 5,660 | 1,801 | (3,004 | ) | 13,350 | |||||||||||||
Total liabilities and stockholders equity |
$ | 81,497 | $ | 12,143 | $ | 4,247 | $ | 10,300 | $ | 108,187 | |||||||||
(1) | Includes inter-segment eliminations and non-strategic products. |
14
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Deferred Acquisition Costs Rollforward
(amounts in millions)
Retirement and Protection |
International | U.S. Mortgage Insurance |
Corporate and Other |
Total | |||||||||||||||
Unamortized balance as of December 31, 2009 |
$ | 6,501 | $ | 727 | $ | 24 | $ | 5 | $ | 7,257 | |||||||||
Costs deferred |
155 | 32 | 6 | | 193 | ||||||||||||||
Amortization, net of interest accretion(1) |
(79 | ) | (69 | ) | (3 | ) | | (151 | ) | ||||||||||
Impact of foreign currency translation |
| (18 | ) | | | (18 | ) | ||||||||||||
Unamortized balance as of March 31, 2010 |
6,577 | 672 | 27 | 5 | 7,281 | ||||||||||||||
Effect of accumulated net unrealized investment gains (losses) |
(29 | ) | | | | (29 | ) | ||||||||||||
Balance as of March 31, 2010 |
$ | 6,548 | $ | 672 | $ | 27 | $ | 5 | $ | 7,252 | |||||||||
(1) | Amortization, net of interest accretion, includes $(8) million of amortization related to net investment gains (losses) for the policyholder account balances. |
15
Quarterly Results by Segment
16
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income (Loss) by Segment
(amounts in millions)
Retirement and Protection | International | U.S. Mortgage Insurance |
Corporate and Other(1) |
|||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2010 |
Wealth Management |
Retirement Income |
Life Insurance |
Long-Term Care |
Total | Mortgage Insurance Canada |
Mortgage Insurance Australia |
Other Mortgage Insurance |
Lifestyle Protection Insurance |
Total | Total | |||||||||||||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | | $ | 36 | $ | 229 | $ | 559 | $ | 824 | $ | 147 | $ | 84 | $ | 15 | $ | 258 | $ | 504 | $ | 142 | $ | | $ | 1,470 | ||||||||||||||||||||||||||
Net investment income |
| 276 | 106 | 212 | 594 | 45 | 37 | 3 | 47 | 132 | 30 | 9 | 765 | |||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) |
| (43 | ) | (26 | ) | 2 | (67 | ) | 5 | | 2 | 2 | 9 | 4 | (16 | ) | (70 | ) | ||||||||||||||||||||||||||||||||||
Insurance and investment product fees and other |
81 | 52 | 104 | 5 | 242 | | 1 | 1 | 4 | 6 | 5 | 3 | 256 | |||||||||||||||||||||||||||||||||||||||
Total revenues |
81 | 321 | 413 | 778 | 1,593 | 197 | 122 | 21 | 311 | 651 | 181 | (4 | ) | 2,421 | ||||||||||||||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
| 136 | 228 | 581 | 945 | 56 | 36 | 14 | 68 | 174 | 196 | | 1,315 | |||||||||||||||||||||||||||||||||||||||
Interest credited |
| 113 | 60 | 1 | 174 | | | | | | | 39 | 213 | |||||||||||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
66 | 35 | 37 | 92 | 230 | 22 | 16 | 11 | 154 | 203 | 34 | 8 | 475 | |||||||||||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
1 | 19 | 45 | 40 | 105 | 12 | 9 | 1 | 50 | 72 | 3 | 4 | 184 | |||||||||||||||||||||||||||||||||||||||
Interest expense |
| | 22 | | 22 | | | | 23 | 23 | | 70 | 115 | |||||||||||||||||||||||||||||||||||||||
Total benefits and expenses |
67 | 303 | 392 | 714 | 1,476 | 90 | 61 | 26 | 295 | 472 | 233 | 121 | 2,302 | |||||||||||||||||||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
14 | 18 | 21 | 64 | 117 | 107 | 61 | (5 | ) | 16 | 179 | (52 | ) | (125 | ) | 119 | ||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
3 | 4 | 3 | 23 | 33 | 30 | 18 | (1 | ) | 3 | 50 | (19 | ) | (157 | ) | (93 | ) | |||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) |
11 | 14 | 18 | 41 | 84 | 77 | 43 | (4 | ) | 13 | 129 | (33 | ) | 32 | 212 | |||||||||||||||||||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
| | | | | 34 | | | | 34 | | | 34 | |||||||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
11 | 14 | 18 | 41 | 84 | 43 | 43 | (4 | ) | 13 | 95 | (33 | ) | 32 | 178 | |||||||||||||||||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| 20 | 19 | (1 | ) | 38 | (2 | ) | | (1 | ) | (1 | ) | (4 | ) | (3 | ) | 11 | 42 | |||||||||||||||||||||||||||||||||
Net tax benefit related to separation from the companys former parent |
| | | | | | | | | | | (106 | ) | (106 | ) | |||||||||||||||||||||||||||||||||||||
NET OPERATING INCOME (LOSS) |
$ | 11 | $ | 34 | $ | 37 | $ | 40 | $ | 122 | $ | 41 | $ | 43 | $ | (5 | ) | $ | 12 | $ | 91 | $ | (36 | ) | $ | (63 | ) | $ | 114 | |||||||||||||||||||||||
Effective tax rate (operating income (loss))(2) |
23.7 | % | 31.1 | % | 25.9 | % | 35.9 | % | 30.7 | % | 26.7 | % | 29.4 | % | 28.8 | % | 14.9 | % | 26.6 | % | 36.5 | % | 42.1 | % | 15.2 | % |
(1) | Includes inter-segment eliminations and non-strategic products. |
(2) | The operating income (loss) effective tax rate for all pages in this financial supplement was calculated using whole dollars. As a result, the percentages shown may differ from an operating income (loss) effective tax rate calculated using the rounded numbers in this financial supplement. |
17
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income (Loss) by Segment
(amounts in millions)
Retirement and Protection | International | U.S. Mortgage Insurance |
Corporate and Other(1) |
|||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2009 |
Wealth Management |
Retirement Income |
Life Insurance |
Long-Term Care |
Total | Mortgage Insurance Canada |
Mortgage Insurance Australia |
Other Mortgage Insurance |
Lifestyle Protection Insurance |
Total | Total | |||||||||||||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | | $ | 47 | $ | 243 | $ | 545 | $ | 835 | $ | 127 | $ | 66 | $ | 21 | $ | 282 | $ | 496 | $ | 170 | $ | 1 | $ | 1,502 | ||||||||||||||||||||||||||
Net investment income |
| 236 | 103 | 180 | 519 | 41 | 26 | 5 | 32 | 104 | 33 | 55 | 711 | |||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) |
(1 | ) | (197 | ) | (160 | ) | (216 | ) | (574 | ) | (3 | ) | 3 | (2 | ) | (13 | ) | (15 | ) | (19 | ) | (162 | ) | (770 | ) | |||||||||||||||||||||||||||
Insurance and investment product fees and other |
64 | 44 | 93 | 6 | 207 | | | 1 | 4 | 5 | 4 | 75 | 291 | |||||||||||||||||||||||||||||||||||||||
Total revenues |
63 | 130 | 279 | 515 | 987 | 165 | 95 | 25 | 305 | 590 | 188 | (31 | ) | 1,734 | ||||||||||||||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
| 156 | 222 | 535 | 913 | 50 | 39 | 20 | 83 | 192 | 403 | | 1,508 | |||||||||||||||||||||||||||||||||||||||
Interest credited |
| 124 | 62 | | 186 | | | | | | | 89 | 275 | |||||||||||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
52 | 32 | 33 | 86 | 203 | 17 | 12 | 13 | 153 | 195 | 32 | 11 | 441 | |||||||||||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
1 | 79 | 36 | 47 | 163 | 9 | 5 | 2 | 58 | 74 | 5 | 5 | 247 | |||||||||||||||||||||||||||||||||||||||
Interest expense |
| | 26 | | 26 | 1 | | | 7 | 8 | | 62 | 96 | |||||||||||||||||||||||||||||||||||||||
Total benefits and expenses |
53 | 391 | 379 | 668 | 1,491 | 77 | 56 | 35 | 301 | 469 | 440 | 167 | 2,567 | |||||||||||||||||||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
10 | (261 | ) | (100 | ) | (153 | ) | (504 | ) | 88 | 39 | (10 | ) | 4 | 121 | (252 | ) | (198 | ) | (833 | ) | |||||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
4 | (104 | ) | (35 | ) | (53 | ) | (188 | ) | 25 | 8 | (4 | ) | 1 | 30 | (104 | ) | (102 | ) | (364 | ) | |||||||||||||||||||||||||||||||
NET INCOME (LOSS) |
6 | (157 | ) | (65 | ) | (100 | ) | (316 | ) | 63 | 31 | (6 | ) | 3 | 91 | (148 | ) | (96 | ) | (469 | ) | |||||||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| 110 | 103 | 141 | 354 | 3 | (2 | ) | 1 | 8 | 10 | 13 | 106 | 483 | ||||||||||||||||||||||||||||||||||||||
NET OPERATING INCOME (LOSS) |
$ | 6 | $ | (47 | ) | $ | 38 | $ | 41 | $ | 38 | $ | 66 | $ | 29 | $ | (5 | ) | $ | 11 | $ | 101 | $ | (135 | ) | $ | 10 | $ | 14 | |||||||||||||||||||||||
Effective tax rate (operating income (loss)) |
37.0 | % | 48.8 | % | 35.4 | % | 35.4 | % | 4.4 | % | 28.7 | % | 19.0 | % | 39.8 | % | 34.6 | % | 26.2 | % | 41.7 | % | 128.5 | % | 114.6 | % |
(1) | Includes inter-segment eliminations and non-strategic products. |
18
Retirement and Protection
19
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating IncomeRetirement and Protection
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 824 | $ | 836 | $ | 813 | $ | 829 | $ | 835 | $ | 3,313 | ||||||||||||
Net investment income |
594 | 597 | 576 | 564 | 519 | 2,256 | ||||||||||||||||||
Net investment gains (losses) |
(67 | ) | (105 | ) | (102 | ) | 4 | (574 | ) | (777 | ) | |||||||||||||
Insurance and investment product fees and other |
242 | 224 | 234 | 210 | 207 | 875 | ||||||||||||||||||
Total revenues |
1,593 | 1,552 | 1,521 | 1,607 | 987 | 5,667 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
945 | 907 | 902 | 895 | 913 | 3,617 | ||||||||||||||||||
Interest credited |
174 | 181 | 186 | 184 | 186 | 737 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
230 | 241 | 226 | 211 | 203 | 881 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
105 | 93 | 67 | 138 | 163 | 461 | ||||||||||||||||||
Interest expense |
22 | 24 | 23 | 24 | 26 | 97 | ||||||||||||||||||
Total benefits and expenses |
1,476 | 1,446 | 1,404 | 1,452 | 1,491 | 5,793 | ||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
117 | 106 | 117 | 155 | (504 | ) | (126 | ) | ||||||||||||||||
Provision (benefit) for income taxes |
33 | 34 | 32 | 56 | (188 | ) | (66 | ) | ||||||||||||||||
NET INCOME (LOSS) |
84 | 72 | 85 | 99 | (316 | ) | (60 | ) | ||||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS): |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
38 | 57 | 49 | 24 | 354 | 484 | ||||||||||||||||||
NET OPERATING INCOME |
$ | 122 | $ | 129 | $ | 134 | $ | 123 | $ | 38 | $ | 424 | ||||||||||||
Effective tax rate (operating income) |
30.7 | % | 34.3 | % | 30.5 | % | 35.7 | % | 4.4 | % | 31.7 | % |
20
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income, Sales and Assets Under ManagementWealth Management
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||
Net investment income |
| | | | | | ||||||||||||||||||
Net investment gains (losses) |
| | (1 | ) | 1 | (1 | ) | (1 | ) | |||||||||||||||
Insurance and investment product fees and other |
81 | 77 | 72 | 66 | 64 | 279 | ||||||||||||||||||
Total revenues |
81 | 77 | 71 | 67 | 63 | 278 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
| | | | | | ||||||||||||||||||
Interest credited |
| | | | | | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
66 | 64 | 58 | 55 | 52 | 229 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
1 | 1 | 1 | 1 | 1 | 4 | ||||||||||||||||||
Interest expense |
| | | | | | ||||||||||||||||||
Total benefits and expenses |
67 | 65 | 59 | 56 | 53 | 233 | ||||||||||||||||||
INCOME BEFORE INCOME TAXES |
14 | 12 | 12 | 11 | 10 | 45 | ||||||||||||||||||
Provision for income taxes |
3 | 5 | 4 | 4 | 4 | 17 | ||||||||||||||||||
NET INCOME |
11 | 7 | 8 | 7 | 6 | 28 | ||||||||||||||||||
ADJUSTMENT TO NET INCOME: |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| | | | | | ||||||||||||||||||
NET OPERATING INCOME |
$ | 11 | $ | 7 | $ | 8 | $ | 7 | $ | 6 | $ | 28 | ||||||||||||
Effective tax rate (operating income) |
23.7 | % | 40.1 | % | 36.8 | % | 38.7 | % | 37.0 | % | 38.1 | % | ||||||||||||
SALES: |
||||||||||||||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||
Independent Producers |
$ | 1,265 | $ | 1,298 | $ | 1,134 | $ | 1,014 | $ | 713 | $ | 4,159 | ||||||||||||
Dedicated Sales Specialists |
210 | 199 | 238 | 99 | 83 | 619 | ||||||||||||||||||
Total Sales |
$ | 1,475 | $ | 1,497 | $ | 1,372 | $ | 1,113 | $ | 796 | $ | 4,778 | ||||||||||||
ASSETS UNDER MANAGEMENT: |
||||||||||||||||||||||||
Beginning of period |
$ | 18,865 | $ | 17,992 | $ | 15,909 | $ | 14,210 | $ | 15,447 | $ | 15,447 | ||||||||||||
Gross flows |
1,475 | 1,497 | 1,372 | 1,113 | 796 | 4,778 | ||||||||||||||||||
Redemptions |
(971 | ) | (892 | ) | (904 | ) | (953 | ) | (1,274 | ) | (4,023 | ) | ||||||||||||
Net flows |
504 | 605 | 468 | 160 | (478 | ) | 755 | |||||||||||||||||
Market performance |
668 | 268 | 1,615 | 1,539 | (759 | ) | 2,663 | |||||||||||||||||
End of period |
$ | 20,037 | $ | 18,865 | $ | 17,992 | $ | 15,909 | $ | 14,210 | $ | 18,865 | ||||||||||||
Wealth Management results represent Genworth Financial Wealth Management, Inc., Genworth Financial Advisors Corporation, Genworth Financial Trust Company and Quantuvis Consulting, Inc.
21
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income (Loss)Retirement Income
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 36 | $ | 39 | $ | 30 | $ | 38 | $ | 47 | $ | 154 | ||||||||||||
Net investment income |
276 | 276 | 260 | 258 | 236 | 1,030 | ||||||||||||||||||
Net investment gains (losses) |
(43 | ) | (22 | ) | (63 | ) | 72 | (197 | ) | (210 | ) | |||||||||||||
Insurance and investment product fees and other |
52 | 53 | 47 | 42 | 44 | 186 | ||||||||||||||||||
Total revenues |
321 | 346 | 274 | 410 | 130 | 1,160 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
136 | 133 | 128 | 129 | 156 | 546 | ||||||||||||||||||
Interest credited |
113 | 117 | 122 | 124 | 124 | 487 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
35 | 40 | 39 | 35 | 32 | 146 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
19 | 28 | 23 | 69 | 79 | 199 | ||||||||||||||||||
Interest expense |
| | | 1 | | 1 | ||||||||||||||||||
Total benefits and expenses |
303 | 318 | 312 | 358 | 391 | 1,379 | ||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
18 | 28 | (38 | ) | 52 | (261 | ) | (219 | ) | |||||||||||||||
Provision (benefit) for income taxes |
4 | 8 | (15 | ) | 19 | (104 | ) | (92 | ) | |||||||||||||||
NET INCOME (LOSS) |
14 | 20 | (23 | ) | 33 | (157 | ) | (127 | ) | |||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS): |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
20 | 10 | 32 | (17 | ) | 110 | 135 | |||||||||||||||||
NET OPERATING INCOME (LOSS) |
$ | 34 | $ | 30 | $ | 9 | $ | 16 | $ | (47 | ) | $ | 8 | |||||||||||
Effective tax rate (operating income (loss)) |
31.1 | % | 31.7 | % | 22.5 | % | 39.4 | % | 48.8 | % | 179.8 | % |
22
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income (Loss) and SalesRetirement IncomeFee-Based
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||
Net investment income |
4 | 4 | 7 | 8 | 12 | 31 | ||||||||||||||||||
Net investment gains (losses) |
(15 | ) | (4 | ) | 8 | 91 | (17 | ) | 78 | |||||||||||||||
Insurance and investment product fees and other |
50 | 50 | 46 | 39 | 40 | 175 | ||||||||||||||||||
Total revenues |
39 | 50 | 61 | 138 | 35 | 284 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
9 | 2 | 3 | 4 | 22 | 31 | ||||||||||||||||||
Interest credited |
2 | 2 | 3 | 3 | 3 | 11 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
18 | 20 | 20 | 15 | 14 | 69 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
(2 | ) | 8 | 7 | 49 | 76 | 140 | |||||||||||||||||
Interest expense |
| | | | | | ||||||||||||||||||
Total benefits and expenses |
27 | 32 | 33 | 71 | 115 | 251 | ||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
12 | 18 | 28 | 67 | (80 | ) | 33 | |||||||||||||||||
Provision (benefit) for income taxes |
1 | 2 | 13 | 25 | (41 | ) | (1 | ) | ||||||||||||||||
NET INCOME (LOSS) |
11 | 16 | 15 | 42 | (39 | ) | 34 | |||||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS): |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
6 | 2 | (4 | ) | (27 | ) | 12 | (17 | ) | |||||||||||||||
NET OPERATING INCOME (LOSS) |
$ | 17 | $ | 18 | $ | 11 | $ | 15 | $ | (27 | ) | $ | 17 | |||||||||||
Effective tax rate (operating income (loss)) |
22.4 | % | 14.7 | % | 50.3 | % | 40.7 | % | 55.9 | % | -140.4 | % | ||||||||||||
SALES: |
||||||||||||||||||||||||
Sales by Product: |
||||||||||||||||||||||||
Income Distribution Series(1) |
$ | 170 | $ | 168 | $ | 187 | $ | 131 | $ | 121 | $ | 607 | ||||||||||||
Traditional Variable Annuities(2) |
35 | 36 | 30 | 23 | 22 | 111 | ||||||||||||||||||
Total Sales |
$ | 205 | $ | 204 | $ | 217 | $ | 154 | $ | 143 | $ | 718 | ||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||
Financial Intermediaries |
$ | 195 | $ | 191 | $ | 200 | $ | 136 | $ | 124 | $ | 651 | ||||||||||||
Independent Producers |
5 | 7 | 7 | 8 | 6 | 28 | ||||||||||||||||||
Dedicated Sales Specialists |
5 | 6 | 10 | 10 | 13 | 39 | ||||||||||||||||||
Total Sales |
$ | 205 | $ | 204 | $ | 217 | $ | 154 | $ | 143 | $ | 718 | ||||||||||||
(1) | The Income Distribution Series products are comprised of the deferred and immediate variable annuity products with rider options, that provide guaranteed income benefits including guaranteed minimum withdrawal benefits and certain types of guaranteed annuitization benefits. These products do not include fixed single premium immediate annuities or deferred annuities, which may also serve income distribution needs. |
(2) | The traditional variable annuities include products that provide the potential for tax deferred growth on the policyholders premium. These products do not provide the opportunity for a living benefit through guaranteed minimum withdrawal benefits; however, similar to the Income Distribution Series products, they do provide a variety of guaranteed minimum death benefit options. |
23
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Selected Operating Performance MeasuresRetirement IncomeFee-Based
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
Income Distribution Series |
||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
$ | 5,943 | $ | 5,802 | $ | 5,286 | $ | 5,093 | $ | 5,234 | $ | 5,234 | ||||||||||||
Deposits |
173 | 172 | 190 | 133 | 125 | 620 | ||||||||||||||||||
Surrenders, benefits and product charges |
(127 | ) | (125 | ) | (109 | ) | (109 | ) | (106 | ) | (449 | ) | ||||||||||||
Net flows |
46 | 47 | 81 | 24 | 19 | 171 | ||||||||||||||||||
Interest credited and investment performance |
146 | 94 | 435 | 169 | (160 | ) | 538 | |||||||||||||||||
Account value, net of reinsurance, end of period |
6,135 | 5,943 | 5,802 | 5,286 | 5,093 | 5,943 | ||||||||||||||||||
Traditional Variable Annuities |
||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
2,016 | 1,973 | 1,796 | 1,642 | 1,756 | 1,756 | ||||||||||||||||||
Deposits |
27 | 30 | 25 | 16 | 19 | 90 | ||||||||||||||||||
Surrenders, benefits and product charges |
(65 | ) | (58 | ) | (48 | ) | (60 | ) | (63 | ) | (229 | ) | ||||||||||||
Net flows |
(38 | ) | (28 | ) | (23 | ) | (44 | ) | (44 | ) | (139 | ) | ||||||||||||
Interest credited and investment performance |
70 | 71 | 200 | 198 | (70 | ) | 399 | |||||||||||||||||
Account value, net of reinsurance, end of period |
2,048 | 2,016 | 1,973 | 1,796 | 1,642 | 2,016 | ||||||||||||||||||
Variable Life Insurance |
||||||||||||||||||||||||
Account value, beginning of the period |
298 | 292 | 271 | 248 | 266 | 266 | ||||||||||||||||||
Deposits |
3 | 3 | 3 | 3 | 4 | 13 | ||||||||||||||||||
Surrenders, benefits and product charges |
(10 | ) | (8 | ) | (12 | ) | (9 | ) | (11 | ) | (40 | ) | ||||||||||||
Net flows |
(7 | ) | (5 | ) | (9 | ) | (6 | ) | (7 | ) | (27 | ) | ||||||||||||
Interest credited and investment performance |
12 | 11 | 30 | 29 | (11 | ) | 59 | |||||||||||||||||
Account value, end of period |
303 | 298 | 292 | 271 | 248 | 298 | ||||||||||||||||||
Total Retirement IncomeFee-Based |
$ | 8,486 | $ | 8,257 | $ | 8,067 | $ | 7,353 | $ | 6,983 | $ | 8,257 | ||||||||||||
24
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income (Loss) and SalesRetirement IncomeSpread-Based
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 36 | $ | 39 | $ | 30 | $ | 38 | $ | 47 | $ | 154 | ||||||||||||
Net investment income |
272 | 272 | 253 | 250 | 224 | 999 | ||||||||||||||||||
Net investment gains (losses) |
(28 | ) | (18 | ) | (71 | ) | (19 | ) | (180 | ) | (288 | ) | ||||||||||||
Insurance and investment product fees and other |
2 | 3 | 1 | 3 | 4 | 11 | ||||||||||||||||||
Total revenues |
282 | 296 | 213 | 272 | 95 | 876 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
127 | 131 | 125 | 125 | 134 | 515 | ||||||||||||||||||
Interest credited |
111 | 115 | 119 | 121 | 121 | 476 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
17 | 20 | 19 | 20 | 18 | 77 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
21 | 20 | 16 | 20 | 3 | 59 | ||||||||||||||||||
Interest expense |
| | | 1 | | 1 | ||||||||||||||||||
Total benefits and expenses |
276 | 286 | 279 | 287 | 276 | 1,128 | ||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
6 | 10 | (66 | ) | (15 | ) | (181 | ) | (252 | ) | ||||||||||||||
Provision (benefit) for income taxes |
3 | 6 | (28 | ) | (6 | ) | (63 | ) | (91 | ) | ||||||||||||||
NET INCOME (LOSS) |
3 | 4 | (38 | ) | (9 | ) | (118 | ) | (161 | ) | ||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS): |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
14 | 8 | 36 | 10 | 98 | 152 | ||||||||||||||||||
NET OPERATING INCOME (LOSS) |
$ | 17 | $ | 12 | $ | (2 | ) | $ | 1 | $ | (20 | ) | $ | (9 | ) | |||||||||
Effective tax rate (operating income (loss)) |
38.3 | % | 47.2 | % | 83.0 | % | 13.3 | % | 34.7 | % | 49.2 | % | ||||||||||||
SALES: |
||||||||||||||||||||||||
Sales by Product: |
||||||||||||||||||||||||
Structured Settlements |
$ | | $ | | $ | 1 | $ | 5 | $ | 4 | $ | 10 | ||||||||||||
Single Premium Immediate Annuities |
68 | 75 | 62 | 70 | 74 | 281 | ||||||||||||||||||
Fixed Annuities |
39 | 29 | 64 | 221 | 229 | 543 | ||||||||||||||||||
Total Sales |
$ | 107 | $ | 104 | $ | 127 | $ | 296 | $ | 307 | $ | 834 | ||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||
Financial Intermediaries |
$ | 60 | $ | 54 | $ | 70 | $ | 165 | $ | 162 | $ | 451 | ||||||||||||
Independent Producers |
44 | 47 | 52 | 121 | 127 | 347 | ||||||||||||||||||
Dedicated Sales Specialists |
3 | 3 | 5 | 10 | 18 | 36 | ||||||||||||||||||
Total Sales |
$ | 107 | $ | 104 | $ | 127 | $ | 296 | $ | 307 | $ | 834 | ||||||||||||
PREMIUMS BY PRODUCT: |
||||||||||||||||||||||||
Single Premium Immediate Annuities |
$ | 36 | $ | 39 | $ | 30 | $ | 36 | $ | 44 | $ | 149 | ||||||||||||
Structured Settlements |
| | | 2 | 3 | 5 | ||||||||||||||||||
Total Premiums |
$ | 36 | $ | 39 | $ | 30 | $ | 38 | $ | 47 | $ | 154 | ||||||||||||
25
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Selected Operating Performance MeasuresRetirement IncomeSpread-Based
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
Fixed Annuities |
||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
$ | 11,409 | $ | 11,588 | $ | 11,770 | $ | 11,833 | $ | 11,996 | $ | 11,996 | ||||||||||||
Deposits |
41 | 31 | 69 | 229 | 242 | 571 | ||||||||||||||||||
Surrenders, benefits and product charges |
(312 | ) | (310 | ) | (353 | ) | (394 | ) | (508 | ) | (1,565 | ) | ||||||||||||
Net flows |
(271 | ) | (279 | ) | (284 | ) | (165 | ) | (266 | ) | (994 | ) | ||||||||||||
Interest credited |
96 | 100 | 102 | 102 | 103 | 407 | ||||||||||||||||||
Account value, net of reinsurance, end of period |
11,234 | 11,409 | 11,588 | 11,770 | 11,833 | 11,409 | ||||||||||||||||||
Single Premium Immediate Annuities |
||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
6,675 | 6,753 | 6,827 | 6,925 | 6,957 | 6,957 | ||||||||||||||||||
Premiums and deposits |
95 | 97 | 91 | 101 | 111 | 400 | ||||||||||||||||||
Surrenders, benefits and product charges |
(265 | ) | (264 | ) | (255 | ) | (289 | ) | (236 | ) | (1,044 | ) | ||||||||||||
Net flows |
(170 | ) | (167 | ) | (164 | ) | (188 | ) | (125 | ) | (644 | ) | ||||||||||||
Interest credited |
88 | 89 | 90 | 90 | 93 | 362 | ||||||||||||||||||
Account value, net of reinsurance, end of period |
6,593 | 6,675 | 6,753 | 6,827 | 6,925 | 6,675 | ||||||||||||||||||
Structured Settlements |
||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
1,115 | 1,116 | 1,117 | 1,101 | 1,106 | 1,106 | ||||||||||||||||||
Premiums and deposits |
| | | 6 | 4 | 10 | ||||||||||||||||||
Surrenders, benefits and product charges |
(14 | ) | (16 | ) | (15 | ) | (5 | ) | (23 | ) | (59 | ) | ||||||||||||
Net flows |
(14 | ) | (16 | ) | (15 | ) | 1 | (19 | ) | (49 | ) | |||||||||||||
Interest credited |
14 | 15 | 14 | 15 | 14 | 58 | ||||||||||||||||||
Account value, net of reinsurance, end of period |
1,115 | 1,115 | 1,116 | 1,117 | 1,101 | 1,115 | ||||||||||||||||||
Total Retirement IncomeSpread-Based |
$ | 18,942 | $ | 19,199 | $ | 19,457 | $ | 19,714 | $ | 19,859 | $ | 19,199 | ||||||||||||
26
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income and SalesLife Insurance
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 229 | $ | 228 | $ | 241 | $ | 241 | $ | 243 | $ | 953 | ||||||||||||
Net investment income |
106 | 105 | 111 | 108 | 103 | 427 | ||||||||||||||||||
Net investment gains (losses) |
(26 | ) | (45 | ) | (43 | ) | (42 | ) | (160 | ) | (290 | ) | ||||||||||||
Insurance and investment product fees and other |
104 | 95 | 111 | 96 | 93 | 395 | ||||||||||||||||||
Total revenues |
413 | 383 | 420 | 403 | 279 | 1,485 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
228 | 206 | 211 | 207 | 222 | 846 | ||||||||||||||||||
Interest credited |
60 | 62 | 64 | 59 | 62 | 247 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
37 | 37 | 36 | 31 | 33 | 137 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
45 | 29 | 4 | 28 | 36 | 97 | ||||||||||||||||||
Interest expense |
22 | 23 | 23 | 23 | 26 | 95 | ||||||||||||||||||
Total benefits and expenses |
392 | 357 | 338 | 348 | 379 | 1,422 | ||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
21 | 26 | 82 | 55 | (100 | ) | 63 | |||||||||||||||||
Provision (benefit) for income taxes |
3 | 6 | 24 | 20 | (35 | ) | 15 | |||||||||||||||||
NET INCOME (LOSS) |
18 | 20 | 58 | 35 | (65 | ) | 48 | |||||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS): |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
19 | 23 | 20 | 23 | 103 | 169 | ||||||||||||||||||
NET OPERATING INCOME |
$ | 37 | $ | 43 | $ | 78 | $ | 58 | $ | 38 | $ | 217 | ||||||||||||
Effective tax rate (operating income) |
25.9 | % | 30.3 | % | 30.7 | % | 35.4 | % | 35.4 | % | 32.8 | % | ||||||||||||
SALES: |
||||||||||||||||||||||||
Sales by Product: |
||||||||||||||||||||||||
Term Life |
$ | 14 | $ | 22 | $ | 19 | $ | 18 | $ | 19 | $ | 78 | ||||||||||||
Term Universal Life |
10 | | | | | | ||||||||||||||||||
Universal Life: |
||||||||||||||||||||||||
Annualized first-year deposits |
8 | 8 | 8 | 8 | 9 | 33 | ||||||||||||||||||
Excess deposits |
20 | 25 | 23 | 23 | 28 | 99 | ||||||||||||||||||
Total Universal Life |
28 | 33 | 31 | 31 | 37 | 132 | ||||||||||||||||||
Total Sales |
$ | 52 | $ | 55 | $ | 50 | $ | 49 | $ | 56 | $ | 210 | ||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||
Financial Intermediaries |
$ | | $ | | $ | | $ | 1 | $ | 1 | $ | 2 | ||||||||||||
Independent Producers |
52 | 55 | 50 | 48 | 55 | 208 | ||||||||||||||||||
Total Sales |
$ | 52 | $ | 55 | $ | 50 | $ | 49 | $ | 56 | $ | 210 | ||||||||||||
27
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Life Insurance In-force
(amounts in millions)
2010 | 2009 | |||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | ||||||||||||
Term life insurance |
||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 472,696 | $ | 473,367 | $ | 474,721 | $ | 477,759 | $ | 489,723 | ||||||
Life insurance in-force before reinsurance |
$ | 620,108 | $ | 622,800 | $ | 621,808 | $ | 623,139 | $ | 625,503 | ||||||
Term universal life insurance |
||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 5,453 | $ | | $ | | $ | | $ | | ||||||
Life insurance in-force before reinsurance |
$ | 5,456 | $ | | $ | | $ | | $ | | ||||||
Universal and whole life insurance |
||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 43,712 | $ | 43,915 | $ | 43,875 | $ | 43,800 | $ | 43,901 | ||||||
Life insurance in-force before reinsurance |
$ | 50,655 | $ | 50,919 | $ | 50,952 | $ | 50,994 | $ | 51,201 | ||||||
Total life insurance |
||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 521,861 | $ | 517,282 | $ | 518,596 | $ | 521,559 | $ | 533,624 | ||||||
Life insurance in-force before reinsurance |
$ | 676,219 | $ | 673,719 | $ | 672,760 | $ | 674,133 | $ | 676,704 |
28
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income and SalesLong-Term Care
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 559 | $ | 569 | $ | 542 | $ | 550 | $ | 545 | $ | 2,206 | ||||||||||||
Net investment income |
212 | 216 | 205 | 198 | 180 | 799 | ||||||||||||||||||
Net investment gains (losses) |
2 | (38 | ) | 5 | (27 | ) | (216 | ) | (276 | ) | ||||||||||||||
Insurance and investment product fees and other |
5 | (1 | ) | 4 | 6 | 6 | 15 | |||||||||||||||||
Total revenues |
778 | 746 | 756 | 727 | 515 | 2,744 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
581 | 568 | 563 | 559 | 535 | 2,225 | ||||||||||||||||||
Interest credited |
1 | 2 | | 1 | | 3 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
92 | 100 | 93 | 90 | 86 | 369 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
40 | 35 | 39 | 40 | 47 | 161 | ||||||||||||||||||
Interest expense |
| 1 | | | | 1 | ||||||||||||||||||
Total benefits and expenses |
714 | 706 | 695 | 690 | 668 | 2,759 | ||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
64 | 40 | 61 | 37 | (153 | ) | (15 | ) | ||||||||||||||||
Provision (benefit) for income taxes |
23 | 15 | 19 | 13 | (53 | ) | (6 | ) | ||||||||||||||||
NET INCOME (LOSS) |
41 | 25 | 42 | 24 | (100 | ) | (9 | ) | ||||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS): |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(1 | ) | 24 | (3 | ) | 18 | 141 | 180 | ||||||||||||||||
NET OPERATING INCOME |
$ | 40 | $ | 49 | $ | 39 | $ | 42 | $ | 41 | $ | 171 | ||||||||||||
Effective tax rate (operating income) |
35.9 | % | 38.0 | % | 30.3 | % | 34.2 | % | 35.4 | % | 34.8 | % | ||||||||||||
SALES: |
||||||||||||||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||
Financial Intermediaries |
$ | 4 | $ | 3 | $ | 3 | $ | 2 | $ | 2 | $ | 10 | ||||||||||||
Independent Producers |
16 | 15 | 12 | 11 | 11 | 49 | ||||||||||||||||||
Dedicated Sales Specialist |
11 | 12 | 13 | 12 | 11 | 48 | ||||||||||||||||||
Total Individual Long-Term Care |
31 | 30 | 28 | 25 | 24 | 107 | ||||||||||||||||||
Group Long-Term Care |
8 | 2 | 5 | 1 | 1 | 9 | ||||||||||||||||||
Medicare Supplement and Other A&H |
17 | 21 | 12 | 13 | 17 | 63 | ||||||||||||||||||
Linked-Benefits |
11 | 10 | 8 | 5 | 5 | 28 | ||||||||||||||||||
Total Sales |
$ | 67 | $ | 63 | $ | 53 | $ | 44 | $ | 47 | $ | 207 | ||||||||||||
LOSS RATIOS: |
||||||||||||||||||||||||
Total Long-Term Care |
||||||||||||||||||||||||
Net Earned Premiums |
$ | 479 | $ | 488 | $ | 469 | $ | 478 | $ | 475 | $ | 1,910 | ||||||||||||
Loss Ratio(1) |
64.6 | % | 63.6 | % | 64.6 | % | 67.5 | % | 63.6 | % | 64.8 | % | ||||||||||||
Gross Benefits Ratio(2) |
107.8 | % | 105.6 | % | 108.2 | % | 105.0 | % | 100.0 | % | 104.7 | % | ||||||||||||
Medicare Supplement and A&H(3) |
||||||||||||||||||||||||
Net Earned Premiums |
$ | 80 | $ | 76 | $ | 74 | $ | 73 | $ | 73 | $ | 296 | ||||||||||||
Loss Ratio(1) |
79.7 | % | 70.6 | % | 73.0 | % | 78.8 | % | 82.6 | % | 76.2 | % |
(1) | The loss ratio for the long-term care insurance products was calculated by dividing benefits and other changes in policy reserves less tabular interest on reserves less loss adjustment expenses by net earned premiums. |
(2) | The gross benefits ratio for the long-term care insurance products was calculated by dividing the benefits and other changes in policy reserves by net earned premiums. |
(3) | Net earned premiums and loss ratios for Medicare Supplement and A&H do not include the linked-benefits products. |
29
International
30
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating IncomeInternational
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 504 | $ | 541 | $ | 523 | $ | 508 | $ | 496 | $ | 2,068 | ||||||||||||
Net investment income |
132 | 120 | 124 | 122 | 104 | 470 | ||||||||||||||||||
Net investment gains (losses) |
9 | 3 | 4 | 4 | (15 | ) | (4 | ) | ||||||||||||||||
Insurance and investment product fees and other |
6 | 4 | 12 | 5 | 5 | 26 | ||||||||||||||||||
Total revenues |
651 | 668 | 663 | 639 | 590 | 2,560 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
174 | 189 | 200 | 226 | 192 | 807 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
203 | 212 | 215 | 197 | 195 | 819 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
72 | 77 | 65 | 66 | 74 | 282 | ||||||||||||||||||
Interest expense |
23 | 4 | 15 | 24 | 8 | 51 | ||||||||||||||||||
Total benefits and expenses |
472 | 482 | 495 | 513 | 469 | 1,959 | ||||||||||||||||||
INCOME BEFORE INCOME TAXES |
179 | 186 | 168 | 126 | 121 | 601 | ||||||||||||||||||
Provision for income taxes |
50 | 49 | 45 | 36 | 30 | 160 | ||||||||||||||||||
NET INCOME |
129 | 137 | 123 | 90 | 91 | 441 | ||||||||||||||||||
Less: net income attributable to noncontrolling interests |
34 | 35 | 26 | | | 61 | ||||||||||||||||||
NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S |
95 | 102 | 97 | 90 | 91 | 380 | ||||||||||||||||||
ADJUSTMENT TO NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(4 | ) | (1 | ) | (1 | ) | (3 | ) | 10 | 5 | ||||||||||||||
NET OPERATING INCOME(1) |
$ | 91 | $ | 101 | $ | 96 | $ | 87 | $ | 101 | $ | 385 | ||||||||||||
Effective tax rate (operating income) |
26.6 | % | 27.0 | % | 23.3 | % | 28.7 | % | 26.2 | % | 26.3 | % |
(1) | Net operating income adjusted for foreign exchange as compared to the prior year period for the International segment was $72 million for the three months ended March 31, 2010. |
31
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income and SalesInternational Mortgage InsuranceCanada
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 147 | $ | 146 | $ | 141 | $ | 131 | $ | 127 | $ | 545 | ||||||||||||
Net investment income |
45 | 45 | 43 | 42 | 41 | 171 | ||||||||||||||||||
Net investment gains (losses) |
5 | 3 | 7 | 5 | (3 | ) | 12 | |||||||||||||||||
Insurance and investment product fees and other |
| | 1 | | | 1 | ||||||||||||||||||
Total revenues |
197 | 194 | 192 | 178 | 165 | 729 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
56 | 57 | 58 | 63 | 50 | 228 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
22 | 23 | 22 | 17 | 17 | 79 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
12 | 10 | 10 | 9 | 9 | 38 | ||||||||||||||||||
Interest expense |
| | | | 1 | 1 | ||||||||||||||||||
Total benefits and expenses |
90 | 90 | 90 | 89 | 77 | 346 | ||||||||||||||||||
INCOME BEFORE INCOME TAXES |
107 | 104 | 102 | 89 | 88 | 383 | ||||||||||||||||||
Provision for income taxes |
30 | 31 | 28 | 26 | 25 | 110 | ||||||||||||||||||
NET INCOME |
77 | 73 | 74 | 63 | 63 | 273 | ||||||||||||||||||
Less: net income attributable to noncontrolling interests |
34 | 35 | 26 | | | 61 | ||||||||||||||||||
NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S |
43 | 38 | 48 | 63 | 63 | 212 | ||||||||||||||||||
ADJUSTMENT TO NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(2 | ) | (1 | ) | (3 | ) | (5 | ) | 3 | (6 | ) | |||||||||||||
NET OPERATING INCOME(1) |
$ | 41 | $ | 37 | $ | 45 | $ | 58 | $ | 66 | $ | 206 | ||||||||||||
Effective tax rate (operating income) |
26.7 | % | 32.5 | % | 21.6 | % | 29.2 | % | 28.7 | % | 28.2 | % | ||||||||||||
SALES: |
||||||||||||||||||||||||
New Insurance Written (NIW) |
||||||||||||||||||||||||
Flow |
$ | 4,000 | $ | 4,700 | $ | 4,400 | $ | 3,600 | $ | 2,400 | $ | 15,100 | ||||||||||||
Bulk |
1,800 | 300 | 200 | | 400 | 900 | ||||||||||||||||||
Total Canada NIW(2) |
$ | 5,800 | $ | 5,000 | $ | 4,600 | $ | 3,600 | $ | 2,800 | $ | 16,000 | ||||||||||||
(1) | Net operating income for the Canadian platform adjusted for foreign exchange as compared to the prior year period was $34 million for the three months ended March 31, 2010. |
(2) | New insurance written for the Canadian platform adjusted for foreign exchange as compared to the prior year period was $4,900 million for the three months ended March 31, 2010. |
32
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income and SalesInternational Mortgage InsuranceAustralia
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 84 | $ | 93 | $ | 77 | $ | 77 | $ | 66 | $ | 313 | ||||||||||||
Net investment income |
37 | 36 | 34 | 29 | 26 | 125 | ||||||||||||||||||
Net investment gains (losses) |
| | (1 | ) | | 3 | 2 | |||||||||||||||||
Insurance and investment product fees and other |
1 | 1 | 1 | | | 2 | ||||||||||||||||||
Total revenues |
122 | 130 | 111 | 106 | 95 | 442 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
36 | 42 | 35 | 41 | 39 | 157 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
16 | 16 | 14 | 12 | 12 | 54 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
9 | 8 | 6 | 7 | 5 | 26 | ||||||||||||||||||
Interest expense |
| | | | | | ||||||||||||||||||
Total benefits and expenses |
61 | 66 | 55 | 60 | 56 | 237 | ||||||||||||||||||
INCOME BEFORE INCOME TAXES |
61 | 64 | 56 | 46 | 39 | 205 | ||||||||||||||||||
Provision for income taxes |
18 | 19 | 15 | 14 | 8 | 56 | ||||||||||||||||||
NET INCOME |
43 | 45 | 41 | 32 | 31 | 149 | ||||||||||||||||||
Less: net income attributable to noncontrolling interests |
| | | | | | ||||||||||||||||||
NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S |
43 | 45 | 41 | 32 | 31 | 149 | ||||||||||||||||||
ADJUSTMENT TO NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| | 1 | | (2 | ) | (1 | ) | ||||||||||||||||
NET OPERATING INCOME(1) |
$ | 43 | $ | 45 | $ | 42 | $ | 32 | $ | 29 | $ | 148 | ||||||||||||
Effective tax rate (operating income) |
29.4 | % | 28.8 | % | 27.3 | % | 31.0 | % | 19.0 | % | 27.1 | % | ||||||||||||
SALES: |
||||||||||||||||||||||||
New Insurance Written (NIW) |
||||||||||||||||||||||||
Flow |
$ | 6,700 | $ | 8,700 | $ | 8,900 | $ | 8,700 | $ | 6,600 | $ | 32,900 | ||||||||||||
Bulk |
700 | | | | | | ||||||||||||||||||
Total Australia NIW(2) |
$ | 7,400 | $ | 8,700 | $ | 8,900 | $ | 8,700 | $ | 6,600 | $ | 32,900 | ||||||||||||
(1) | Net operating income for the Australian platform adjusted for foreign exchange as compared to the prior year period was $31 million for the three months ended March 31, 2010. |
(2) | New insurance written for the Australian platform adjusted for foreign exchange as compared to the prior year period was $5,500 million for the three months ended March 31, 2010. |
33
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income and SalesOther International Mortgage Insurance
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 15 | $ | 14 | $ | 18 | $ | 16 | $ | 21 | $ | 69 | ||||||||||||
Net investment income |
3 | 3 | 5 | 4 | 5 | 17 | ||||||||||||||||||
Net investment gains (losses) |
2 | | 1 | | (2 | ) | (1 | ) | ||||||||||||||||
Insurance and investment product fees and other |
1 | 1 | | 1 | 1 | 3 | ||||||||||||||||||
Total revenues |
21 | 18 | 24 | 21 | 25 | 88 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
14 | 14 | 24 | 21 | 20 | 79 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
11 | 10 | 10 | 8 | 13 | 41 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
1 | 3 | 2 | 1 | 2 | 8 | ||||||||||||||||||
Interest expense |
| | | | | | ||||||||||||||||||
Total benefits and expenses |
26 | 27 | 36 | 30 | 35 | 128 | ||||||||||||||||||
LOSS BEFORE INCOME TAXES |
(5 | ) | (9 | ) | (12 | ) | (9 | ) | (10 | ) | (40 | ) | ||||||||||||
Benefit for income taxes |
(1 | ) | (5 | ) | (4 | ) | (1 | ) | (4 | ) | (14 | ) | ||||||||||||
NET LOSS |
(4 | ) | (4 | ) | (8 | ) | (8 | ) | (6 | ) | (26 | ) | ||||||||||||
Less: net income attributable to noncontrolling interests |
| | | | | | ||||||||||||||||||
NET LOSS AVAILABLE TO GENWORTH FINANCIAL, INC.S |
(4 | ) | (4 | ) | (8 | ) | (8 | ) | (6 | ) | (26 | ) | ||||||||||||
ADJUSTMENT TO NET LOSS AVAILABLE TO GENWORTH FINANCIAL, INC.S |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(1 | ) | | (1 | ) | 1 | 1 | 1 | ||||||||||||||||
NET OPERATING LOSS(1) |
$ | (5 | ) | $ | (4 | ) | $ | (9 | ) | $ | (7 | ) | $ | (5 | ) | $ | (25 | ) | ||||||
Effective tax rate (operating loss) |
28.8 | % | 46.7 | % | 38.6 | % | 7.7 | % | 39.8 | % | 34.3 | % | ||||||||||||
SALES: |
||||||||||||||||||||||||
New Insurance Written (NIW) |
||||||||||||||||||||||||
Flow |
$ | 700 | $ | 900 | $ | 900 | $ | 600 | $ | 900 | $ | 3,300 | ||||||||||||
Bulk |
| | | 100 | | 100 | ||||||||||||||||||
Total Other International NIW(2) |
$ | 700 | $ | 900 | $ | 900 | $ | 700 | $ | 900 | $ | 3,400 | ||||||||||||
(1) | Net operating income (loss) for the Other International platform adjusted for foreign exchange as compared to the prior year period was $(5) million for the three months ended March 31, 2010. |
(2) | New insurance written for the Other International platform adjusted for foreign exchange as compared to the prior year period was $600 million for the three months ended March 31, 2010. |
34
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Selected Key Performance MeasuresInternational Mortgage Insurance
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
Net Premiums Written |
||||||||||||||||||||||||
Canada |
$ | 90 | $ | 104 | $ | 94 | $ | 70 | $ | 52 | $ | 320 | ||||||||||||
Australia |
64 | 99 | 101 | 110 | 82 | 392 | ||||||||||||||||||
Other International(2) |
9 | (28 | ) | 9 | 1 | 4 | (14 | ) | ||||||||||||||||
Total International Net Premiums Written |
$ | 163 | $ | 175 | $ | 204 | $ | 181 | $ | 138 | $ | 698 | ||||||||||||
Loss Ratio(3) |
||||||||||||||||||||||||
Canada |
38 | % | 39 | % | 41 | % | 48 | % | 39 | % | 42 | % | ||||||||||||
Australia |
44 | % | 45 | % | 45 | % | 54 | % | 59 | % | 50 | % | ||||||||||||
Other International |
93 | % | 107 | % | 131 | % | 129 | % | 95 | % | 115 | % | ||||||||||||
Total International Loss Ratio |
43 | % | 45 | % | 50 | % | 56 | % | 51 | % | 50 | % | ||||||||||||
GAAP Basis Expense Ratio(4) |
||||||||||||||||||||||||
Canada |
23 | % | 23 | % | 22 | % | 21 | % | 20 | % | 21 | % | ||||||||||||
Australia |
30 | % | 26 | % | 25 | % | 25 | % | 26 | % | 26 | % | ||||||||||||
Other International(2) |
82 | % | 94 | % | 67 | % | 52 | % | 74 | % | 71 | % | ||||||||||||
Total International GAAP Basis Expense Ratio |
29 | % | 28 | % | 26 | % | 24 | % | 27 | % | 26 | % | ||||||||||||
Adjusted Expense Ratio(5) |
||||||||||||||||||||||||
Canada |
38 | % | 32 | % | 33 | % | 38 | % | 50 | % | 36 | % | ||||||||||||
Australia |
39 | % | 24 | % | 20 | % | 17 | % | 21 | % | 20 | % | ||||||||||||
Other International(2) |
129 | % | -45 | % | 127 | % | NM | (1) | 364 | % | -341 | % | ||||||||||||
Total International Adjusted Expense Ratio |
44 | % | 40 | % | 31 | % | 30 | % | 42 | % | 35 | % | ||||||||||||
Primary Insurance In-force |
||||||||||||||||||||||||
Canada |
$ | 225,400 | $ | 213,500 | $ | 204,900 | $ | 186,600 | $ | 169,700 | ||||||||||||||
Australia |
254,400 | 248,000 | 241,400 | 218,500 | 185,800 | |||||||||||||||||||
Other International(2) |
35,700 | 37,200 | 48,800 | 47,700 | 45,100 | |||||||||||||||||||
Total International Primary Insurance In-force |
$ | 515,500 | $ | 498,700 | $ | 495,100 | $ | 452,800 | $ | 400,600 | ||||||||||||||
Primary Risk In-force(6) |
||||||||||||||||||||||||
Canada |
||||||||||||||||||||||||
Flow |
$ | 62,400 | $ | 59,400 | $ | 56,800 | $ | 51,400 | $ | 46,700 | ||||||||||||||
Bulk |
16,500 | 15,300 | 14,900 | 13,900 | 12,700 | |||||||||||||||||||
Total Canada |
78,900 | 74,700 | 71,700 | 65,300 | 59,400 | |||||||||||||||||||
Australia |
||||||||||||||||||||||||
Flow |
79,400 | 77,300 | 75,000 | 67,700 | 57,300 | |||||||||||||||||||
Bulk |
9,600 | 9,500 | 9,500 | 8,800 | 7,700 | |||||||||||||||||||
Total Australia |
89,000 | 86,800 | 84,500 | 76,500 | 65,000 | |||||||||||||||||||
Other International |
||||||||||||||||||||||||
Flow(2) |
4,700 | 4,900 | 5,800 | 5,600 | 5,300 | |||||||||||||||||||
Bulk |
300 | 300 | 600 | 600 | 600 | |||||||||||||||||||
Total Other International |
5,000 | 5,200 | 6,400 | 6,200 | 5,900 | |||||||||||||||||||
Total International Primary Risk In-force |
$ | 172,900 | $ | 166,700 | $ | 162,600 | $ | 148,000 | $ | 130,300 | ||||||||||||||
The loss and expense ratios included above were calculated using whole dollars and may be different than the ratios calculated using the rounded numbers included herein.
(1) | NM is defined as not meaningful for increases or decreases greater than 500%. |
(2) | Includes the impact of settlements and cancelled insurance contracts, primarily with lenders in Europe. |
(3) | The ratio of incurred losses and loss adjustment expense to net earned premiums. In determining the pricing of the mortgage insurance products, the company develops a pricing loss ratio which uses industry and company loss experience over a number of years, which incorporates both favorable and unfavorable economic environments, differing coverage levels and varying capital requirements. Actual results may vary from pricing loss ratios for a number of reasons, which include differing economic conditions and actual individual product and lender performance. New business pricing loss ratios for the international businesses were as follows for all periods: Canada 35%-40%, Australia 25%-35% and Europe 60%-65%. However, in the second half of 2009, re-pricing efforts in Europe resulted in new business pricing loss ratios of 40%-50% in most countries. |
(4) | The ratio of an insurers general expenses to net earned premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. |
(5) | The ratio of an insurers general expenses to net premiums written. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. |
(6) | The businesses in Australia, New Zealand and Canada currently provide 100% coverage on the majority of the loans the company insures in those markets. For the purpose of representing the risk in-force, the company has 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 the highest expected average per-claim payment for any one underwriting year over the life of the businesses in Australia, New Zealand and Canada. This factor was 35% for all periods presented. |
35
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Selected Key Performance MeasuresInternational Mortgage InsuranceCanada
(dollar amounts in millions)
Primary Insurance |
March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | ||||||||||||||||||
Insured loans in-force |
1,232,052 | 1,213,080 | 1,198,792 | 1,188,541 | 1,174,756 | ||||||||||||||||||
Insured delinquent loans |
3,460 | 3,381 | 3,359 | 3,551 | 3,365 | ||||||||||||||||||
Insured delinquency rate |
0.28 | % | 0.28 | % | 0.28 | % | 0.30 | % | 0.29 | % | |||||||||||||
Flow loans in-force |
942,850 | 931,882 | 918,015 | 904,702 | 893,680 | ||||||||||||||||||
Flow delinquent loans |
3,218 | 3,149 | 3,102 | 3,283 | 3,074 | ||||||||||||||||||
Flow delinquency rate |
0.34 | % | 0.34 | % | 0.34 | % | 0.36 | % | 0.34 | % | |||||||||||||
Bulk loans in-force |
289,202 | 281,198 | 280,777 | 283,839 | 281,076 | ||||||||||||||||||
Bulk delinquent loans |
242 | 232 | 257 | 268 | 291 | ||||||||||||||||||
Bulk delinquency rate |
0.08 | % | 0.08 | % | 0.09 | % | 0.09 | % | 0.10 | % | |||||||||||||
Loss Metrics |
March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | ||||||||||||||||||
Beginning Reserves |
$ | 219 | $ | 213 | $ | 192 | $ | 155 | $ | 130 | |||||||||||||
Paid claims |
(59 | ) | (57 | ) | (52 | ) | (39 | ) | (22 | ) | |||||||||||||
Increase in reserves |
56 | 59 | 58 | 62 | 50 | ||||||||||||||||||
Impact of changes in foreign exchange rates |
6 | 4 | 15 | 14 | (3 | ) | |||||||||||||||||
Ending Reserves |
$ | 222 | $ | 219 | $ | 213 | $ | 192 | $ | 155 | |||||||||||||
March 31, 2010 | December 31, 2009 | March 31, 2009 | |||||||||||||||||||||
Province and Territory |
% of Primary Risk In-force |
Primary Delinquency Rate |
% of Primary Risk In-force |
Primary Delinquency Rate |
% of Primary Risk In-force |
Primary Delinquency Rate |
|||||||||||||||||
Ontario |
48 | % | 0.23 | % | 48 | % | 0.23 | % | 48 | % | 0.29 | % | |||||||||||
British Columbia |
16 | 0.25 | % | 16 | 0.25 | % | 16 | 0.17 | % | ||||||||||||||
Alberta |
15 | 0.55 | % | 15 | 0.54 | % | 15 | 0.37 | % | ||||||||||||||
Quebec |
14 | 0.30 | % | 14 | 0.29 | % | 14 | 0.30 | % | ||||||||||||||
Nova Scotia |
2 | 0.26 | % | 2 | 0.28 | % | 2 | 0.29 | % | ||||||||||||||
Saskatchewan |
2 | 0.13 | % | 2 | 0.15 | % | 2 | 0.08 | % | ||||||||||||||
Manitoba |
1 | 0.08 | % | 1 | 0.12 | % | 1 | 0.11 | % | ||||||||||||||
New Brunswick |
1 | 0.26 | % | 1 | 0.29 | % | 1 | 0.23 | % | ||||||||||||||
All Other |
1 | 0.08 | % | 1 | 0.10 | % | 1 | 0.22 | % | ||||||||||||||
Total |
100 | % | 0.28 | % | 100 | % | 0.28 | % | 100 | % | 0.29 | % | |||||||||||
By Policy Year |
|||||||||||||||||||||||
2000 and Prior |
8 | % | 0.02 | % | 8 | % | 0.02 | % | 8 | % | 0.04 | % | |||||||||||
2001 |
3 | 0.03 | % | 3 | 0.03 | % | 3 | 0.07 | % | ||||||||||||||
2002 |
4 | 0.06 | % | 5 | 0.04 | % | 5 | 0.07 | % | ||||||||||||||
2003 |
6 | 0.08 | % | 6 | 0.08 | % | 6 | 0.13 | % | ||||||||||||||
2004 |
9 | 0.11 | % | 9 | 0.12 | % | 10 | 0.20 | % | ||||||||||||||
2005 |
9 | 0.18 | % | 9 | 0.20 | % | 10 | 0.29 | % | ||||||||||||||
2006 |
11 | 0.39 | % | 12 | 0.42 | % | 13 | 0.54 | % | ||||||||||||||
2007 |
24 | 0.59 | % | 24 | 0.58 | % | 27 | 0.51 | % | ||||||||||||||
2008 |
14 | 0.56 | % | 15 | 0.50 | % | 16 | 0.21 | % | ||||||||||||||
2009 |
9 | 0.11 | % | 9 | 0.05 | % | 2 | | % | ||||||||||||||
2010 |
3 | | % | | | % | | | % | ||||||||||||||
Total |
100 | % | 0.28 | % | 100 | % | 0.28 | % | 100 | % | 0.29 | % | |||||||||||
36
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Selected Key Performance MeasuresInternational Mortgage InsuranceCanada
(Canadian dollar amounts in millions)
2010 | 2009 | ||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | ||||||||||||||||||
Paid Claims |
|||||||||||||||||||||||
Flow |
$ | 61 | $ | 58 | $ | 56 | $ | 45 | $ | 27 | $ | 186 | |||||||||||
Bulk |
1 | 2 | 1 | | 1 | 4 | |||||||||||||||||
Total Paid Claims |
$ | 62 | $ | 60 | $ | 57 | $ | 45 | $ | 28 | $ | 190 | |||||||||||
Average Paid Claim (in thousands) |
$ | 69.8 | $ | 71.0 | $ | 69.8 | $ | 66.9 | $ | 64.2 | |||||||||||||
Average Reserve Per Delinquency (in thousands) |
$ | 65.2 | $ | 67.8 | $ | 68.2 | $ | 62.8 | $ | 58.1 | |||||||||||||
Loss Metrics |
|||||||||||||||||||||||
Beginning Reserves |
$ | 229 | $ | 229 | $ | 223 | $ | 196 | $ | 161 | |||||||||||||
Paid claims |
(62 | ) | (60 | ) | (57 | ) | (45 | ) | (28 | ) | |||||||||||||
Increase in reserves |
59 | 60 | 63 | 72 | 63 | ||||||||||||||||||
Ending Reserves |
$ | 226 | $ | 229 | $ | 229 | $ | 223 | $ | 196 | |||||||||||||
Loan Amount |
|||||||||||||||||||||||
Over $550K |
3 | % | 3 | % | 3 | % | 3 | % | 3 | % | |||||||||||||
$400K to $550K |
7 | 7 | 7 | 7 | 6 | ||||||||||||||||||
$250K to $400K |
28 | 28 | 27 | 27 | 27 | ||||||||||||||||||
$100K to $250K |
55 | 55 | 56 | 55 | 56 | ||||||||||||||||||
$100K or Less |
7 | 7 | 7 | 8 | 8 | ||||||||||||||||||
Total |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
Average Primary Loan Size (in thousands) |
$ | 186 | $ | 185 | $ | 183 | $ | 182 | $ | 182 |
All amounts presented in Canadian dollars.
37
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Selected Key Performance MeasuresInternational Mortgage InsuranceAustralia
(dollar amounts in millions)
Primary Insurance |
March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | ||||||||||||||||||
Insured loans in-force |
1,483,844 | 1,475,157 | 1,466,618 | 1,451,862 | 1,439,276 | ||||||||||||||||||
Insured delinquent loans |
7,274 | 6,834 | 6,564 | 7,094 | 6,996 | ||||||||||||||||||
Insured delinquency rate |
0.49 | % | 0.46 | % | 0.45 | % | 0.49 | % | 0.49 | % | |||||||||||||
Flow loans in-force |
1,319,402 | 1,306,302 | 1,295,401 | 1,278,246 | 1,262,895 | ||||||||||||||||||
Flow delinquent loans |
7,149 | 6,724 | 6,438 | 6,963 | 6,851 | ||||||||||||||||||
Flow delinquency rate |
0.54 | % | 0.51 | % | 0.50 | % | 0.54 | % | 0.54 | % | |||||||||||||
Bulk loans in-force |
164,442 | 168,855 | 171,217 | 173,616 | 176,381 | ||||||||||||||||||
Bulk delinquent loans |
125 | 110 | 126 | 131 | 145 | ||||||||||||||||||
Bulk delinquency rate |
0.08 | % | 0.07 | % | 0.07 | % | 0.08 | % | 0.08 | % | |||||||||||||
Loss Metrics |
March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | ||||||||||||||||||
Beginning Reserves |
$ | 202 | $ | 186 | $ | 172 | $ | 154 | $ | 138 | |||||||||||||
Paid claims |
(46 | ) | (28 | ) | (38 | ) | (49 | ) | (23 | ) | |||||||||||||
Increase in reserves |
36 | 41 | 36 | 41 | 39 | ||||||||||||||||||
Impact of changes in foreign exchange rates |
3 | 3 | 16 | 26 | | ||||||||||||||||||
Ending Reserves |
$ | 195 | $ | 202 | $ | 186 | $ | 172 | $ | 154 | |||||||||||||
March 31, 2010 | December 31, 2009 | March 31, 2009 | |||||||||||||||||||||
State and Territory |
% of Primary Risk In-force |
Primary Delinquency Rate |
% of Primary Risk In-force |
Primary Delinquency Rate |
% of Primary Risk In-force |
Primary Delinquency Rate |
|||||||||||||||||
New South Wales |
31 | % | 0.60 | % | 32 | % | 0.60 | % | 32 | % | 0.82 | % | |||||||||||
Victoria |
23 | 0.39 | % | 23 | 0.37 | % | 23 | 0.37 | % | ||||||||||||||
Queensland |
22 | 0.45 | % | 22 | 0.38 | % | 22 | 0.30 | % | ||||||||||||||
Western Australia |
10 | 0.42 | % | 10 | 0.37 | % | 10 | 0.28 | % | ||||||||||||||
South Australia |
6 | 0.38 | % | 5 | 0.29 | % | 5 | 0.27 | % | ||||||||||||||
New Zealand |
3 | 1.57 | % | 3 | 1.57 | % | 3 | 1.24 | % | ||||||||||||||
Australian Capital Territory |
2 | 0.10 | % | 2 | 0.08 | % | 2 | 0.13 | % | ||||||||||||||
Tasmania |
2 | 0.25 | % | 2 | 0.21 | % | 2 | 0.21 | % | ||||||||||||||
Northern Territory |
1 | 0.09 | % | 1 | 0.09 | % | 1 | 0.11 | % | ||||||||||||||
Total |
100 | % | 0.49 | % | 100 | % | 0.46 | % | 100 | % | 0.49 | % | |||||||||||
By Policy Year |
|||||||||||||||||||||||
2000 and Prior |
9 | % | 0.02 | % | 9 | % | 0.02 | % | 9 | % | 0.02 | % | |||||||||||
2001 |
3 | 0.07 | % | 3 | 0.06 | % | 3 | 0.06 | % | ||||||||||||||
2002 |
5 | 0.11 | % | 5 | 0.10 | % | 6 | 0.11 | % | ||||||||||||||
2003 |
6 | 0.24 | % | 6 | 0.25 | % | 7 | 0.28 | % | ||||||||||||||
2004 |
7 | 0.43 | % | 8 | 0.38 | % | 9 | 0.58 | % | ||||||||||||||
2005 |
10 | 0.60 | % | 11 | 0.58 | % | 12 | 0.81 | % | ||||||||||||||
2006 |
14 | 0.83 | % | 14 | 0.81 | % | 17 | 0.95 | % | ||||||||||||||
2007 |
15 | 1.18 | % | 15 | 1.06 | % | 18 | 0.86 | % | ||||||||||||||
2008 |
13 | 0.93 | % | 14 | 0.83 | % | 15 | 0.33 | % | ||||||||||||||
2009 |
15 | 0.13 | % | 15 | 0.10 | % | 4 | | % | ||||||||||||||
2010 |
3 | | % | | | % | | | % | ||||||||||||||
Total |
100 | % | 0.49 | % | 100 | % | 0.46 | % | 100 | % | 0.49 | % | |||||||||||
38
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Selected Key Performance MeasuresInternational Mortgage InsuranceAustralia
(Australian dollar amounts in millions)
2010 | 2009 | ||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | ||||||||||||||||||
Paid Claims |
|||||||||||||||||||||||
Flow |
$ | 51 | $ | 31 | $ | 45 | $ | 62 | $ | 33 | $ | 171 | |||||||||||
Bulk |
| | 1 | | 1 | 2 | |||||||||||||||||
Total Paid Claims |
$ | 51 | $ | 31 | $ | 46 | $ | 62 | $ | 34 | $ | 173 | |||||||||||
Average Paid Claim (in thousands) |
$ | 66.8 | $ | 68.1 | $ | 61.4 | $ | 62.6 | $ | 55.4 | |||||||||||||
Average Reserve Per Delinquency (in thousands) |
$ | 29.1 | $ | 32.8 | $ | 32.1 | $ | 30.0 | $ | 31.6 | |||||||||||||
Loss Metrics |
|||||||||||||||||||||||
Beginning Reserves |
$ | 225 | $ | 211 | $ | 213 | $ | 221 | $ | 197 | |||||||||||||
Paid claims |
(51 | ) | (31 | ) | (46 | ) | (62 | ) | (34 | ) | |||||||||||||
Increase in reserves |
38 | 45 | 44 | 54 | 58 | ||||||||||||||||||
Ending Reserves |
$ | 212 | $ | 225 | $ | 211 | $ | 213 | $ | 221 | |||||||||||||
Loan Amount |
|||||||||||||||||||||||
Over $550K |
10 | % | 10 | % | 10 | % | 10 | % | 10 | % | |||||||||||||
$400K to $550K |
14 | 13 | 13 | 13 | 13 | ||||||||||||||||||
$250K to $400K |
34 | 35 | 34 | 34 | 33 | ||||||||||||||||||
$100K to $250K |
34 | 34 | 35 | 35 | 36 | ||||||||||||||||||
$100K or Less |
8 | 8 | 8 | 8 | 8 | ||||||||||||||||||
Total |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
Average Primary Loan Size (in thousands) |
$ | 187 | $ | 187 | $ | 187 | $ | 186 | $ | 186 |
All amounts presented in Australian dollars.
39
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Selected Key Performance MeasuresInternational Mortgage Insurance
(amounts in millions)
Risk In-force by Loan-To-Value Ratio(1) |
March 31, 2010 | December 31, 2009 | ||||||||||||||||
Primary | Flow | Bulk | Primary | Flow | Bulk | |||||||||||||
Canada |
||||||||||||||||||
95.01% and above |
$ | 26,676 | $ | 26,676 | $ | | $ | 25,251 | $ | 25,251 | $ | | ||||||
90.01% to 95.00% |
20,622 | 20,620 | 3 | 19,703 | 19,700 | 3 | ||||||||||||
80.01% to 90.00% |
13,876 | 12,708 | 1,168 | 13,160 | 12,145 | 1,015 | ||||||||||||
80.00% and below |
17,708 | 2,417 | 15,292 | 16,617 | 2,299 | 14,319 | ||||||||||||
Total Canada |
$ | 78,882 | $ | 62,420 | $ | 16,462 | $ | 74,731 | $ | 59,395 | $ | 15,337 | ||||||
Australia |
||||||||||||||||||
95.01% and above |
$ | 14,131 | $ | 14,130 | $ | 1 | $ | 13,760 | $ | 13,760 | $ | 1 | ||||||
90.01% to 95.00% |
17,275 | 17,263 | 12 | 16,545 | 16,532 | 13 | ||||||||||||
80.01% to 90.00% |
22,294 | 22,159 | 135 | 21,548 | 21,407 | 142 | ||||||||||||
80.00% and below |
35,335 | 25,914 | 9,421 | 34,941 | 25,596 | 9,345 | ||||||||||||
Total Australia |
$ | 89,035 | $ | 79,466 | $ | 9,569 | $ | 86,794 | $ | 77,294 | $ | 9,500 | ||||||
Other International |
||||||||||||||||||
95.01% and above |
$ | 1,094 | $ | 1,094 | $ | | $ | 1,166 | $ | 1,166 | $ | | ||||||
90.01% to 95.00% |
2,155 | 2,107 | 47 | 2,240 | 2,196 | 44 | ||||||||||||
80.01% to 90.00% |
1,502 | 1,282 | 220 | 1,557 | 1,343 | 214 | ||||||||||||
80.00% and below |
224 | 206 | 19 | 230 | 212 | 18 | ||||||||||||
Total Other International |
$ | 4,974 | $ | 4,689 | $ | 285 | $ | 5,193 | $ | 4,916 | $ | 277 | ||||||
Amounts may not total due to rounding.
(1) | Loan amount in loan-to-value ratio calculation includes capitalized premiums, where applicable. |
40
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income and SalesLifestyle Protection Insurance
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 258 | $ | 288 | $ | 287 | $ | 284 | $ | 282 | $ | 1,141 | ||||||||||||
Net investment income |
47 | 36 | 42 | 47 | 32 | 157 | ||||||||||||||||||
Net investment gains (losses) |
2 | | (3 | ) | (1 | ) | (13 | ) | (17 | ) | ||||||||||||||
Insurance and investment product fees and other |
4 | 2 | 10 | 4 | 4 | 20 | ||||||||||||||||||
Total revenues |
311 | 326 | 336 | 334 | 305 | 1,301 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
68 | 76 | 83 | 101 | 83 | 343 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
154 | 163 | 169 | 160 | 153 | 645 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
50 | 56 | 47 | 49 | 58 | 210 | ||||||||||||||||||
Interest expense |
23 | 4 | 15 | 24 | 7 | 50 | ||||||||||||||||||
Total benefits and expenses |
295 | 299 | 314 | 334 | 301 | 1,248 | ||||||||||||||||||
INCOME BEFORE INCOME TAXES |
16 | 27 | 22 | | 4 | 53 | ||||||||||||||||||
Provision (benefit) for income taxes |
3 | 4 | 6 | (3 | ) | 1 | 8 | |||||||||||||||||
NET INCOME |
13 | 23 | 16 | 3 | 3 | 45 | ||||||||||||||||||
Less: net income attributable to noncontrolling interests |
| | | | | | ||||||||||||||||||
NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S |
13 | 23 | 16 | 3 | 3 | 45 | ||||||||||||||||||
ADJUSTMENT TO NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(1 | ) | | 2 | 1 | 8 | 11 | |||||||||||||||||
NET OPERATING INCOME(1) |
$ | 12 | $ | 23 | $ | 18 | $ | 4 | $ | 11 | $ | 56 | ||||||||||||
Effective tax rate (operating income) |
14.9 | % | 17.3 | % | 26.2 | % | -341.2 | % | 34.6 | % | 20.4 | % | ||||||||||||
SALES: |
||||||||||||||||||||||||
Lifestyle Protection Insurance |
||||||||||||||||||||||||
Traditional indemnity premiums |
$ | 263 | $ | 283 | $ | 289 | $ | 272 | $ | 267 | $ | 1,111 | ||||||||||||
Premium equivalents for administrative services only business |
4 | 1 | 4 | 6 | 8 | 19 | ||||||||||||||||||
Reinsurance premiums assumed accounted for under the deposit method |
170 | 180 | 181 | 178 | 132 | 671 | ||||||||||||||||||
Total Lifestyle Protection Insurance(2) |
437 | 464 | 474 | 456 | 407 | 1,801 | ||||||||||||||||||
Mexico Operations |
| | 18 | 16 | 16 | 50 | ||||||||||||||||||
Total Sales |
$ | 437 | $ | 464 | $ | 492 | $ | 472 | $ | 423 | $ | 1,851 | ||||||||||||
SALES BY REGION(3): |
||||||||||||||||||||||||
Lifestyle Protection Insurance |
||||||||||||||||||||||||
Established European Regions |
||||||||||||||||||||||||
Western Region |
$ | 166 | $ | 155 | $ | 165 | $ | 158 | $ | 147 | $ | 625 | ||||||||||||
Southern Region |
100 | 132 | 137 | 138 | 111 | 518 | ||||||||||||||||||
Nordic region |
82 | 90 | 85 | 78 | 69 | 322 | ||||||||||||||||||
Structured Deals(4) |
78 | 77 | 74 | 69 | 66 | 286 | ||||||||||||||||||
Other Countries |
11 | 10 | 13 | 13 | 14 | 50 | ||||||||||||||||||
Total Lifestyle Protection Insurance |
437 | 464 | 474 | 456 | 407 | 1,801 | ||||||||||||||||||
Mexico Operations |
| | 18 | 16 | 16 | 50 | ||||||||||||||||||
Total Sales |
$ | 437 | $ | 464 | $ | 492 | $ | 472 | $ | 423 | $ | 1,851 | ||||||||||||
Loss Ratio(5) |
26 | % | 26 | % | 27 | % | 34 | % | 27 | % | 28 | % |
The loss ratio included above was calculated using whole dollars and may be different than the ratio calculated using the rounded numbers included herein.
(1) | Net operating income adjusted for foreign exchange as compared to the prior year period for the lifestyle protection insurance business was $12 million for the three months ended March 31, 2010. |
(2) | Sales adjusted for foreign exchange as compared to the prior year period for the lifestyle protection insurance business was $399 million for the three months ended March 31, 2010. |
(3) | In the first quarter of 2010, the company changed the way it reports sales by region. All prior period amounts have been re-presented. |
(4) | Structured deals represent in-force blocks of business acquired through reinsurance arrangements and ongoing reciprocal arrangements in place with certain clients. |
(5) | The ratio of incurred losses and loss adjustment expense to net earned premiums excluding amounts associated with the Mexico operations. |
41
U.S. Mortgage Insurance
42
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Loss and SalesU.S. Mortgage Insurance
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 142 | $ | 146 | $ | 156 | $ | 164 | $ | 170 | $ | 636 | ||||||||||||
Net investment income |
30 | 32 | 34 | 35 | 33 | 134 | ||||||||||||||||||
Net investment gains (losses) |
4 | 27 | 41 | | (19 | ) | 49 | |||||||||||||||||
Insurance and investment product fees and other |
5 | 2 | 4 | (3 | ) | 4 | 7 | |||||||||||||||||
Total revenues |
181 | 207 | 235 | 196 | 188 | 826 | ||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
196 | 272 | 346 | 371 | 403 | 1,392 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
34 | 33 | 34 | 33 | 32 | 132 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
3 | 6 | 6 | 5 | 5 | 22 | ||||||||||||||||||
Total benefits and expenses |
233 | 311 | 386 | 409 | 440 | 1,546 | ||||||||||||||||||
LOSS BEFORE INCOME TAXES |
(52 | ) | (104 | ) | (151 | ) | (213 | ) | (252 | ) | (720 | ) | ||||||||||||
Benefit for income taxes |
(19 | ) | (48 | ) | (62 | ) | (79 | ) | (104 | ) | (293 | ) | ||||||||||||
NET LOSS |
(33 | ) | (56 | ) | (89 | ) | (134 | ) | (148 | ) | (427 | ) | ||||||||||||
ADJUSTMENT TO NET LOSS: |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(3 | ) | (18 | ) | (27 | ) | | 13 | (32 | ) | ||||||||||||||
NET OPERATING LOSS |
$ | (36 | ) | $ | (74 | ) | $ | (116 | ) | $ | (134 | ) | $ | (135 | ) | $ | (459 | ) | ||||||
Effective tax rate (operating loss) |
36.5 | % | 43.8 | % | 39.7 | % | 37.2 | % | 41.7 | % | 40.3 | % | ||||||||||||
SALES: |
||||||||||||||||||||||||
New Insurance Written (NIW) |
||||||||||||||||||||||||
Flow |
$ | 1,500 | $ | 1,800 | $ | 1,500 | $ | 1,600 | $ | 2,500 | $ | 7,400 | ||||||||||||
Bulk |
200 | 400 | 500 | 1,700 | 1,100 | 3,700 | ||||||||||||||||||
Pool |
| | | 100 | 100 | 200 | ||||||||||||||||||
Total U.S. Mortgage Insurance NIW |
$ | 1,700 | $ | 2,200 | $ | 2,000 | $ | 3,400 | $ | 3,700 | $ | 11,300 | ||||||||||||
43
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Other MetricsU.S. Mortgage Insurance
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
Net Premiums Written |
$ | 142 | $ | 144 | $ | 150 | $ | 160 | $ | 171 | $ | 625 | ||||||||||||
New Risk Written |
||||||||||||||||||||||||
Flow |
$ | 335 | $ | 373 | $ | 316 | $ | 323 | $ | 510 | $ | 1,522 | ||||||||||||
Bulk |
8 | 18 | 23 | 67 | 45 | 153 | ||||||||||||||||||
Total Primary |
343 | 391 | 339 | 390 | 555 | 1,675 | ||||||||||||||||||
Pool |
| 1 | 2 | 3 | 2 | 8 | ||||||||||||||||||
Total New Risk Written |
$ | 343 | $ | 392 | $ | 341 | $ | 393 | $ | 557 | $ | 1,683 | ||||||||||||
Primary Insurance In-force |
$ | 134,800 | $ | 145,100 | $ | 149,500 | $ | 155,200 | $ | 159,800 | ||||||||||||||
Risk In-force |
||||||||||||||||||||||||
Flow |
$ | 30,206 | $ | 30,951 | $ | 31,846 | $ | 32,803 | $ | 34,085 | ||||||||||||||
Bulk |
523 | 771 | 776 | 775 | 721 | |||||||||||||||||||
Total Primary |
30,729 | 31,722 | 32,622 | 33,578 | 34,806 | |||||||||||||||||||
Pool |
322 | 331 | 339 | 349 | 355 | |||||||||||||||||||
Total Risk In-force |
$ | 31,051 | $ | 32,053 | $ | 32,961 | $ | 33,927 | $ | 35,161 | ||||||||||||||
GAAP Basis Expense Ratio(2) |
26 | % | 27 | % | 25 | % | 23 | % | 22 | % | 24 | % | ||||||||||||
Adjusted Expense Ratio(3) |
26 | % | 28 | % | 26 | % | 24 | % | 22 | % | 25 | % | ||||||||||||
Flow Persistency |
86 | % | 84 | % | 84 | % | 81 | % | 83 | % | ||||||||||||||
Gross Written Premiums Ceded To Captives/Total Direct Written Premiums |
20 | % | 21 | % | 21 | % | 22 | % | 22 | % | ||||||||||||||
Risk To Capital Ratio(4) |
N/A | 14.6:1 | 15.1:1 | 14.8:1 | 13.8:1 | |||||||||||||||||||
Average Primary Loan Size (in thousands) |
$ | 160 | $ | 163 | $ | 163 | $ | 164 | $ | 164 | ||||||||||||||
Primary Risk In-Force Subject To Captives |
48 | % | 50 | % | 51 | % | 52 | % | 53 | % | ||||||||||||||
Primary Risk In-Force That Is GSE Conforming |
96 | % | 96 | % | 96 | % | 96 | % | 96 | % | ||||||||||||||
Beginning Number of Primary Delinquencies |
122,279 | 115,430 | 102,800 | 92,964 | 83,377 | 83,377 | ||||||||||||||||||
New Delinquencies |
31,126 | 37,539 | 40,388 | 36,434 | 39,944 | 154,305 | ||||||||||||||||||
Delinquency Cures |
(41,272 | )(1) | (26,425 | ) | (24,014 | ) | (22,790 | ) | (26,801 | ) | (100,030 | ) | ||||||||||||
Paid Claims |
(5,029 | ) | (4,265 | ) | (3,744 | ) | (3,808 | ) | (3,556 | ) | (15,373 | ) | ||||||||||||
Ending Number of Primary Delinquencies |
107,104 | 122,279 | 115,430 | 102,800 | 92,964 | 122,279 | ||||||||||||||||||
The expense ratios included above were calculated using whole dollars and may be different than the ratios calculated using the rounded numbers included herein.
(1) | In the first quarter of 2010, the company reached a settlement with a GSE counterparty regarding certain bulk Alt-A business. Delinquency cures included approximately 10,100 cures related to this settlement. |
(2) | The ratio of an insurers general expenses to net earned premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals and amortization of DAC and intangibles. |
(3) | The ratio of an insurers general expenses to net written premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals and amortization of DAC and intangibles. |
(4) | Certain states limit a private mortgage insurers risk in-force to 25 times the total of the insurers policyholders surplus plus the statutory contingency reserve, commonly known as the risk to capital requirement. The risk to capital ratio for the U.S. mortgage insurance business is not available for the current period due to the timing of the statutory statement filings. |
44
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Loss MetricsU.S. Mortgage Insurance
(dollar amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
Net Paid Claims |
||||||||||||||||||||||||
Flow |
$ | 219 | $ | 202 | $ | 177 | $ | 187 | $ | 197 | $ | 763 | ||||||||||||
Bulk |
209 | 10 | 205 | 2 | 1 | 218 | ||||||||||||||||||
Total Primary |
428 | 212 | 382 | 189 | 198 | 981 | ||||||||||||||||||
Pool |
| | | 1 | | 1 | ||||||||||||||||||
Total Net Paid Claims |
$ | 428 | (1) | $ | 212 | $ | 382 | (7) | $ | 190 | $ | 198 | $ | 982 | ||||||||||
Average Paid Claim (in thousands) |
$ | 84.7 | (2) | $ | 49.2 | $ | 100.6 | (8) | $ | 49.5 | $ | 55.5 | ||||||||||||
Number of Primary Delinquencies |
||||||||||||||||||||||||
Flow |
102,389 | 107,495 | 100,208 | 87,590 | 79,349 | |||||||||||||||||||
Bulk loans with established reserve |
2,155 | 11,319 | 11,002 | 10,294 | 7,561 | |||||||||||||||||||
Bulk loans with no reserve(3) |
2,560 | 3,465 | 4,220 | 4,916 | 6,054 | |||||||||||||||||||
Average Reserve Per Delinquency (in thousands) |
||||||||||||||||||||||||
Flow |
$ | 19.2 | $ | 18.9 | $ | 20.0 | $ | 22.9 | $ | 23.1 | ||||||||||||||
Bulk loans with established reserve |
21.7 | 20.8 | 19.2 | 12.7 | 11.3 | |||||||||||||||||||
Bulk loans with no reserve(3) |
| | | | | |||||||||||||||||||
Beginning Reserves |
$ | 2,289 | $ | 2,233 | $ | 2,264 | $ | 2,028 | $ | 1,711 | $ | 1,711 | ||||||||||||
Paid claims |
(503 | )(1) | (256 | ) | (425 | )(7) | (213 | ) | (205 | ) | (1,099 | ) | ||||||||||||
Increase in reserves |
230 | (1) | 312 | 394 | (7) | 449 | 522 | 1,677 | ||||||||||||||||
Ending Reserves |
$ | 2,016 | $ | 2,289 | $ | 2,233 | $ | 2,264 | $ | 2,028 | $ | 2,289 | ||||||||||||
Beginning Reinsurance Recoverable(4) |
$ | 674 | $ | 679 | $ | 673 | $ | 619 | $ | 506 | $ | 506 | ||||||||||||
Ceded paid claims |
(75 | ) | (44 | ) | (43 | ) | (23 | ) | (7 | ) | (117 | ) | ||||||||||||
Increase in recoverable |
35 | 39 | 49 | 77 | 120 | 285 | ||||||||||||||||||
Ending Reinsurance Recoverable |
$ | 634 | $ | 674 | $ | 679 | $ | 673 | $ | 619 | $ | 674 | ||||||||||||
Loss Ratio(5) |
138 | % | 186 | % | 223 | % | 225 | % | 237 | % | 219 | % | ||||||||||||
Estimated Savings For Loss Mitigation Activities(6) |
$ | 233 | $ | 290 | $ | 224 | $ | 188 | $ | 145 | $ | 847 |
The loss ratio included above was calculated using whole dollars and may be different than the ratio calculated using the rounded numbers included herein.
(1) | In the first quarter of 2010, the company reached a settlement with a GSE counterparty regarding certain bulk Alt-A business. Net paid claims included $180 million and the change in reserves included a decrease of $185 million related to this settlement. |
(2) | Excluding the settlement in the first quarter of 2010 related to the GSE Alt-A business, the average paid claim was approximately $49,100 in the first quarter of 2010. |
(3) | Reserves were not established on loans where the company was in a secondary loss position due to an existing deductible and the company believes currently have no risk for claim. |
(4) | Reinsurance recoverable excludes ceded unearned premium recoveries and amounts for which cash proceeds have not yet been received. |
(5) | The ratio of incurred losses and loss adjustment expense to net earned premiums. Excluding the effects of the settlement in the first quarter of 2010 related to the GSE Alt-A business, the loss ratio was 141% as of March 31, 2010. Excluding the effects of the settlement in the third quarter of 2009 related to the bulk business, the loss ratios were 162% and 204% for the three months ended September 30, 2009 and the twelve months ended December 31, 2009, respectively. |
(6) | Loss mitigation activities include rescissions, cancellations, borrower loan modifications, repayment plans, lender- and borrower-titled pre-sales and other loan workouts and claim mitigation actions. Estimated savings for rescissions represent the reduction in carried loss reserves, net of premium refunds and reinstatement of prior rescissions. Estimated savings for loan modifications and other cure related loss mitigation actions represent the reduction in carried loss reserves. For non-cure related actions, including pre-sales, the estimated savings represent the difference between the full claim obligation and the actual amount paid. |
(7) | In the third quarter of 2009, the company settled arbitration proceedings with a lender regarding certain bulk transactions related to payment option adjustable rate (POA) loans. The settlement resolves prior claims, or pending and anticipated future unpaid claims for coverage benefits under the policies for the POA loans, and the lenders bad faith counterclaims. Net paid claims included $203 million and the change in reserves included a decrease of $108 million related to this settlement. |
(8) | Excluding the settlement in the third quarter of 2009 related to the bulk business, the average paid claim was approximately $47,200 in the third quarter of 2009. |
45
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Portfolio Quality MetricsU.S. Mortgage Insurance
2010 | 2009 | ||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||
Risk In-force by Credit Quality(1) |
|||||||||||||||
Primary by FICO Scores >679 |
64 | % | 64 | % | 64 | % | 63 | % | 63 | % | |||||
Primary by FICO Scores 620-679 |
28 | % | 28 | % | 28 | % | 29 | % | 29 | % | |||||
Primary by FICO Scores 575-619 |
6 | % | 6 | % | 6 | % | 6 | % | 6 | % | |||||
Primary by FICO Scores <575 |
2 | % | 2 | % | 2 | % | 2 | % | 2 | % | |||||
Flow by FICO Scores >679 |
64 | % | 64 | % | 63 | % | 63 | % | 63 | % | |||||
Flow by FICO Scores 620-679 |
28 | % | 28 | % | 29 | % | 29 | % | 29 | % | |||||
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 >679 |
87 | % | 86 | % | 85 | % | 85 | % | 84 | % | |||||
Bulk by FICO Scores 620-679 |
11 | % | 12 | % | 13 | % | 13 | % | 14 | % | |||||
Bulk by FICO Scores 575-619 |
1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||
Bulk by FICO Scores <575 |
1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||
Primary A minus |
5 | % | 5 | % | 5 | % | 6 | % | 6 | % | |||||
Primary Sub-prime(2) |
5 | % | 5 | % | 5 | % | 5 | % | 5 | % | |||||
Primary Loans |
|||||||||||||||
Primary loans in-force |
840,618 | 890,730 | 914,770 | 947,777 | 973,988 | ||||||||||
Primary delinquent loans |
107,104 | 122,279 | 115,430 | 102,800 | 92,964 | ||||||||||
Primary delinquency rate |
12.74 | % | 13.73 | % | 12.62 | % | 10.85 | % | 9.54 | % | |||||
Flow loans in-force |
735,564 | 753,370 | 774,000 | 796,633 | 826,663 | ||||||||||
Flow delinquent loans |
102,389 | 107,495 | 100,208 | 87,590 | 79,349 | ||||||||||
Flow delinquency rate |
13.92 | % | 14.27 | % | 12.95 | % | 11.00 | % | 9.60 | % | |||||
Bulk loans in-force |
105,054 | 137,360 | 140,770 | 151,144 | 147,325 | ||||||||||
Bulk delinquent loans |
4,715 | 14,784 | 15,222 | 15,210 | 13,615 | ||||||||||
Bulk delinquency rate |
4.49 | % | 10.76 | % | 10.81 | % | 10.06 | % | 9.24 | % | |||||
A minus and sub-prime loans in-force |
86,185 | 89,678 | 93,344 | 97,271 | 101,413 | ||||||||||
A minus and sub-prime delinquent loans |
26,387 | 29,238 | 28,151 | 25,271 | 23,448 | ||||||||||
A minus and sub-prime delinquency rate |
30.62 | % | 32.60 | % | 30.16 | % | 25.98 | % | 23.12 | % | |||||
Pool Loans |
|||||||||||||||
Pool loans in-force |
19,907 | 20,370 | 20,859 | 21,166 | 21,870 | ||||||||||
Pool delinquent loans |
783 | 781 | 741 | 632 | 586 | ||||||||||
Pool delinquency rate |
3.93 | % | 3.83 | % | 3.55 | % | 2.99 | % | 2.68 | % |
(1) | Loans with unknown FICO scores are included in the 620-679 category. |
(2) | Excludes loans classified as A minus. |
46
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Portfolio Quality MetricsU.S. Mortgage Insurance
March 31, 2010 | December 31, 2009 | March 31, 2009 | ||||||||||||||||
% of Primary Risk In-force |
Primary Delinquency Rate |
% of Primary Risk In-force |
Primary Delinquency Rate |
% of Primary Risk In-force |
Primary Delinquency Rate |
|||||||||||||
By Region |
||||||||||||||||||
Southeast(1) |
23 | % | 17.28 | % | 23 | % | 18.36 | % | 24 | % | 13.34 | % | ||||||
South Central(2) |
16 | 11.81 | % | 17 | 12.42 | % | 17 | 8.07 | % | |||||||||
Northeast(3) |
14 | 11.13 | % | 13 | 11.60 | % | 13 | 7.61 | % | |||||||||
North Central(4) |
11 | 11.66 | % | 11 | 12.20 | % | 11 | 7.78 | % | |||||||||
Pacific(5) |
11 | 16.66 | % | 11 | 19.43 | % | 11 | 13.66 | % | |||||||||
Great Lakes(6) |
9 | 9.47 | % | 9 | 10.20 | % | 8 | 8.22 | % | |||||||||
Plains(7) |
6 | 7.72 | % | 6 | 8.29 | % | 6 | 5.27 | % | |||||||||
Mid-Atlantic(8) |
5 | 11.85 | % | 5 | 13.08 | % | 5 | 8.25 | % | |||||||||
New England(9) |
5 | 11.67 | % | 5 | 12.48 | % | 5 | 8.10 | % | |||||||||
Total |
100 | % | 12.74 | % | 100 | % | 13.73 | % | 100 | % | 9.54 | % | ||||||
By State |
||||||||||||||||||
Florida |
8 | % | 29.07 | % | 8 | % | 30.77 | % | 8 | % | 24.49 | % | ||||||
Texas |
7 | % | 9.10 | % | 7 | % | 9.49 | % | 7 | % | 6.10 | % | ||||||
New York |
6 | % | 9.12 | % | 6 | % | 9.42 | % | 6 | % | 6.04 | % | ||||||
California |
5 | % | 17.72 | % | 5 | % | 21.87 | % | 5 | % | 16.70 | % | ||||||
Illinois |
5 | % | 16.09 | % | 5 | % | 16.40 | % | 5 | % | 10.27 | % | ||||||
Georgia |
4 | % | 17.40 | % | 4 | % | 17.62 | % | 4 | % | 11.33 | % | ||||||
North Carolina |
4 | % | 11.50 | % | 4 | % | 11.73 | % | 4 | % | 7.37 | % | ||||||
Pennsylvania |
4 | % | 10.66 | % | 4 | % | 11.13 | % | 4 | % | 7.29 | % | ||||||
New Jersey |
4 | % | 16.68 | % | 4 | % | 17.35 | % | 4 | % | 11.63 | % | ||||||
Ohio |
3 | % | 8.11 | % | 3 | % | 8.47 | % | 3 | % | 7.06 | % |
(1) | Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee |
(2) | Arizona, Colorado, Louisiana, New Mexico, Oklahoma, Texas and Utah |
(3) | New Jersey, New York and Pennsylvania |
(4) | Illinois, Minnesota, Missouri and Wisconsin |
(5) | Alaska, California, Hawaii, Nevada, Oregon and Washington |
(6) | Indiana, Kentucky, Michigan and Ohio |
(7) | Idaho, Iowa, Kansas, Montana, Nebraska, North Dakota, South Dakota and Wyoming |
(8) | Delaware, Maryland, Virginia, Washington D.C. and West Virginia |
(9) | Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont |
47
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Portfolio Quality MetricsU.S. Mortgage Insurance
(amounts in millions)
Primary Risk In-force: |
March 31, 2010 | % of Total |
December 31, 2009 | % of Total |
March 31, 2009 | % of Total |
||||||||||||
Lender concentration (by original applicant) |
$ | 30,729 | $ | 31,722 | $ | 34,806 | ||||||||||||
Top 10 lenders |
15,365 | 15,814 | 17,183 | |||||||||||||||
Top 20 lenders |
17,904 | 18,540 | 20,552 | |||||||||||||||
Loan-to-value ratio |
||||||||||||||||||
95.01% and above |
$ | 7,775 | 25 | % | $ | 7,962 | 25 | % | $ | 8,794 | 25 | % | ||||||
90.01% to 95.00% |
10,594 | 34 | 10,832 | 34 | 11,924 | 34 | ||||||||||||
80.01% to 90.00% |
11,902 | 39 | 12,245 | 39 | 13,419 | 39 | ||||||||||||
80.00% and below |
458 | 2 | 683 | 2 | 669 | 2 | ||||||||||||
Total |
$ | 30,729 | 100 | % | $ | 31,722 | 100 | % | $ | 34,806 | 100 | % | ||||||
Loan grade |
||||||||||||||||||
Prime |
$ | 27,525 | 90 | % | $ | 28,376 | 89 | % | $ | 30,970 | 89 | % | ||||||
A minus and sub-prime |
3,204 | 10 | 3,346 | 11 | 3,836 | 11 | ||||||||||||
Total |
$ | 30,729 | 100 | % | $ | 31,722 | 100 | % | $ | 34,806 | 100 | % | ||||||
Loan type(1) |
||||||||||||||||||
First mortgages |
||||||||||||||||||
Fixed rate mortgage |
||||||||||||||||||
Flow |
$ | 29,502 | 96 | % | $ | 30,196 | 95 | % | $ | 33,130 | 95 | % | ||||||
Bulk |
498 | 2 | 690 | 2 | 629 | 2 | ||||||||||||
Adjustable rate mortgage |
||||||||||||||||||
Flow |
704 | 2 | 755 | 3 | 955 | 3 | ||||||||||||
Bulk |
25 | | 81 | | 92 | | ||||||||||||
Second mortgages |
| | | | | | ||||||||||||
Total |
$ | 30,729 | 100 | % | $ | 31,722 | 100 | % | $ | 34,806 | 100 | % | ||||||
Type of documentation |
||||||||||||||||||
Alt-A |
||||||||||||||||||
Flow |
$ | 991 | 3 | % | $ | 1,064 | 3 | % | $ | 1,290 | 4 | % | ||||||
Bulk |
65 | | 244 | 1 | 279 | 1 | ||||||||||||
Standard(2) |
||||||||||||||||||
Flow |
29,215 | 95 | 29,887 | 94 | 32,795 | 94 | ||||||||||||
Bulk |
458 | 2 | 527 | 2 | 442 | 1 | ||||||||||||
Total |
$ | 30,729 | 100 | % | $ | 31,722 | 100 | % | $ | 34,806 | 100 | % | ||||||
Mortgage term |
||||||||||||||||||
15 years and under |
$ | 360 | 1 | % | $ | 367 | 1 | % | $ | 372 | 1 | % | ||||||
More than 15 years |
30,369 | 99 | 31,355 | 99 | 34,434 | 99 | ||||||||||||
Total |
$ | 30,729 | 100 | % | $ | 31,722 | 100 | % | $ | 34,806 | 100 | % | ||||||
(1) | For loan type in this table, any loan with an interest rate that is fixed for an initial term of five years or more is categorized as a fixed rate mortgage. |
(2) | Standard includes loans with reduced or different documentation requirements that meet specifications of GSE approved underwriting systems with historical and expected delinquency rates consistent with the companys standard portfolio. |
48
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Portfolio Quality MetricsU.S. Mortgage Insurance
(amounts in millions)
March 31, 2010 | ||||||||||||||||
Policy Year |
Average Rate(1) | Primary Insurance In-force |
% of Total |
Primary Risk In-force |
% of Total | |||||||||||
1999 and Prior |
7.81 | % | $ | 2,091 | 1.5 | % | $ | 543 | 1.8 | % | ||||||
2000 |
8.26 | % | 367 | 0.3 | 92 | 0.3 | ||||||||||
2001 |
7.47 | % | 1,362 | 1.0 | 343 | 1.1 | ||||||||||
2002 |
6.62 | % | 3,257 | 2.4 | 790 | 2.6 | ||||||||||
2003 |
5.65 | % | 13,047 | 9.7 | 2,198 | 7.1 | ||||||||||
2004 |
5.87 | % | 7,638 | 5.7 | 1,707 | 5.6 | ||||||||||
2005 |
5.98 | % | 11,983 | 8.9 | 3,033 | 9.9 | ||||||||||
2006 |
6.53 | % | 16,016 | 11.9 | 3,855 | 12.5 | ||||||||||
2007 |
6.62 | % | 35,364 | 26.2 | 8,452 | 27.5 | ||||||||||
2008 |
6.20 | % | 31,675 | 23.5 | 7,789 | 25.3 | ||||||||||
2009 |
5.08 | % | 10,255 | 7.6 | 1,585 | 5.2 | ||||||||||
2010 |
4.96 | % | 1,721 | 1.3 | 342 | 1.1 | ||||||||||
Total |
6.24 | % | $ | 134,776 | 100.0 | % | $ | 30,729 | 100.0 | % | ||||||
Occupancy and Property Type |
March 31, 2010 | December 31, 2009 | ||||||||||||||
Occupancy Status % of Primary Risk In-force |
|
|||||||||||||||
Primary residence |
|
93.4 | % | 93.2 | % | |||||||||||
Second home |
|
4.0 | 4.1 | |||||||||||||
Non-owner occupied |
|
2.6 | 2.7 | |||||||||||||
Total |
|
100.0 | % | 100.0 | % | |||||||||||
Property Type % of Primary Risk In-force |
|
|||||||||||||||
Single family detached |
|
85.7 | % | 85.6 | % | |||||||||||
Condominium and co-operative |
|
11.3 | 11.3 | |||||||||||||
Multi-family and other |
|
3.0 | 3.1 | |||||||||||||
Total |
|
100.0 | % | 100.0 | % | |||||||||||
(1) | Average Annual Mortgage Interest Rate |
49
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Portfolio Quality MetricsU.S. Mortgage Insurance
(amounts in billions)
FICO > 679 | FICO 620 - 679(1) | FICO < 620 | Total | |||||||||||||
2010 | 2010 | 2010 | 2010 | |||||||||||||
Primary Risk In-force |
1Q | 1Q | 1Q | 1Q | ||||||||||||
Total Primary Risk In-force |
$ | 19.8 | $ | 8.6 | $ | 2.3 | $ | 30.7 | ||||||||
Delinquency rate(2) |
7.9 | % | 19.7 | % | 31.0 | % | 12.7 | % | ||||||||
2010 policy year |
$ | 0.3 | $ | | $ | | $ | 0.3 | ||||||||
Delinquency rate |
| % | 0.2 | % | | % | | % | ||||||||
2009 policy year |
$ | 1.5 | $ | 0.1 | $ | | $ | 1.6 | ||||||||
Delinquency rate |
0.2 | % | 1.2 | % | 9.2 | % | 0.2 | % | ||||||||
2008 policy year |
$ | 6.0 | $ | 1.5 | $ | 0.3 | $ | 7.8 | ||||||||
Delinquency rate |
5.7 | % | 14.8 | % | 28.2 | % | 8.3 | % | ||||||||
2007 policy year |
$ | 4.8 | $ | 2.8 | $ | 0.9 | $ | 8.5 | ||||||||
Delinquency rate |
13.3 | % | 24.7 | % | 36.5 | % | 19.6 | % | ||||||||
2006 policy year |
$ | 2.2 | $ | 1.3 | $ | 0.4 | $ | 3.9 | ||||||||
Delinquency rate |
13.2 | % | 23.5 | % | 31.9 | % | 18.5 | % | ||||||||
2005 policy year |
$ | 1.7 | $ | 1.0 | $ | 0.2 | $ | 2.9 | ||||||||
Delinquency rate |
11.5 | % | 20.9 | % | 27.0 | % | 15.8 | % | ||||||||
2004 and prior policy years |
$ | 3.3 | $ | 1.9 | $ | 0.5 | $ | 5.7 | ||||||||
Delinquency rate |
5.6 | % | 15.9 | % | 25.2 | % | 10.0 | % | ||||||||
Fixed rate mortgage |
$ | 19.4 | $ | 8.4 | $ | 2.2 | $ | 30.0 | ||||||||
Delinquency rate |
7.6 | % | 19.5 | % | 30.8 | % | 12.5 | % | ||||||||
Adjustable rate mortgage |
$ | 0.4 | $ | 0.2 | $ | 0.1 | $ | 0.7 | ||||||||
Delinquency rate |
23.5 | % | 27.8 | % | 37.7 | % | 26.2 | % | ||||||||
Loan-to-value > 95% |
$ | 4.0 | $ | 2.9 | $ | 0.9 | $ | 7.8 | ||||||||
Delinquency rate |
9.9 | % | 22.9 | % | 35.8 | % | 18.0 | % | ||||||||
Alt-A(3) |
$ | 0.7 | $ | 0.3 | $ | 0.1 | $ | 1.1 | ||||||||
Delinquency rate |
20.5 | % | 35.1 | % | 37.0 | % | 24.7 | % | ||||||||
Interest only and option ARMs |
$ | 1.7 | $ | 0.6 | $ | 0.1 | $ | 2.4 | ||||||||
Delinquency rate |
26.5 | % | 39.0 | % | 45.8 | % | 30.6 | % |
(1) | Loans with unknown FICO scores are included in the 620679 category. |
(2) | Delinquency rate represents the number of lender reported delinquencies divided by the number of remaining policies consistent with mortgage insurance practices. |
(3) | Alt-A consists of loans with reduced documentation or verification of income or assets and a higher historical and expected delinquency rate than standard documentation loans. |
50
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Other MetricsU.S. Mortgage Insurance Bulk Risk In-force
(dollar amounts in millions)
March 31, 2010 | December 31, 2009 | March 31, 2009 | ||||||||||
GSE Alt-A |
||||||||||||
Risk in-force |
$ | 58 | $ | 295 | $ | 336 | ||||||
Average FICO score |
721 | 721 | 720 | |||||||||
Loan-to-value ratio |
79 | % | 79 | % | 79 | % | ||||||
Standard documentation(1) |
18 | % | 24 | % | 23 | % | ||||||
Stop loss |
100 | % | 100 | % | 100 | % | ||||||
Deductible |
49 | % | 81 | % | 81 | % | ||||||
FHLB |
||||||||||||
Risk in-force |
$ | 382 | $ | 391 | $ | 297 | ||||||
Average FICO score |
757 | 755 | 750 | |||||||||
Loan-to-value ratio |
70 | % | 75 | % | 75 | % | ||||||
Standard documentation(1) |
96 | % | 96 | % | 95 | % | ||||||
Stop loss |
90 | % | 90 | % | 83 | % | ||||||
Deductible |
100 | % | 100 | % | 100 | % | ||||||
Other |
||||||||||||
Risk in-force |
$ | 83 | $ | 85 | $ | 88 | ||||||
Average FICO score |
699 | 701 | 691 | |||||||||
Loan-to-value ratio |
91 | % | 91 | % | 92 | % | ||||||
Standard documentation(1) |
97 | % | 96 | % | 96 | % | ||||||
Stop loss |
9 | % | 9 | % | 9 | % | ||||||
Deductible |
| % | | % | | % | ||||||
Total Bulk Risk In-force |
$ | 523 | $ | 771 | $ | 721 |
(1) | Standard documentation includes loans with reduced or different documentation requirements that meet specifications of GSE approved underwriting systems with historical and expected delinquency rates consistent with the standard portfolio. |
51
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Aggregate Book Year Analysis Provided to Illustrate Directional Progression Toward Captive Attachment( 1)
March 31, 2010 | |||||||||||||||
Book Year(2) |
Original Book Risk In-force ($B) |
Progression To Attachment Point |
Current Risk In-force ($B) |
Ever-To-Date Incurred Losses ($MM) |
Captive Benefits ($MM) |
||||||||||
2004 |
0-50% | $ | 0.2 | $ | 16 | ||||||||||
2004 |
50-75% | 0.5 | 40 | ||||||||||||
2004 |
75-99% | 0.2 | 22 | ||||||||||||
2004 |
Attached | | 9 | ||||||||||||
2004 Total |
$ | 3.3 | $ | 0.9 | $ | 87 | $ | | |||||||
2005 |
0-50% | $ | | $ | 1 | ||||||||||
2005 |
50-75% | | | ||||||||||||
2005 |
75-99% | 0.1 | 7 | ||||||||||||
2005 |
Attached | 1.8 | 335 | ||||||||||||
2005 Total |
$ | 4.2 | $ | 1.9 | $ | 343 | 15 | ||||||||
2006 |
0-50% | $ | | $ | 1 | ||||||||||
2006 |
50-75% | | 1 | ||||||||||||
2006 |
75-99% | | 1 | ||||||||||||
2006 |
Attached | 2.2 | 511 | ||||||||||||
2006 Total |
$ | 3.8 | $ | 2.2 | $ | 514 | 9 | ||||||||
2007 |
0-50% | $ | | $ | | ||||||||||
2007 |
50-75% | | 1 | ||||||||||||
2007 |
75-99% | 0.1 | 5 | ||||||||||||
2007 |
Attached | 4.6 | 892 | ||||||||||||
2007 Total |
$ | 6.2 | $ | 4.7 | $ | 898 | 7 | ||||||||
2008 |
0-50% | $ | 0.7 | $ | 8 | ||||||||||
2008 |
50-75% | 0.4 | 16 | ||||||||||||
2008 |
75-99% | 1.0 | 48 | ||||||||||||
2008 |
Attached | 0.4 | 28 | ||||||||||||
2008 Total |
$ | 3.0 | $ | 2.5 | $ | 100 | 3 | ||||||||
Captive Benefits In Quarter ($MM) |
$ | 34 | |||||||||||||
(1) | Data presented in aggregate for all trusts. Actual trust attachment and exit points will vary by individual lender contract. For purposes of this illustration, ever-to-date incurred losses equal current reserves plus ever-to-date paid claims. The information presented excludes quota share captive reinsurance data. Progress toward captive attachment is determined at a lender level for each book year by dividing ever-to-date incurred losses by original risk in-force for that book year. |
(2) | Book year figures may include loans from additional periods pursuant to reinsurance agreement terms and conditions. |
52
Corporate and Other
53
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Operating Income (Loss)Corporate and Other(1)
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | | $ | | $ | | $ | 1 | $ | 1 | $ | 2 | ||||||||||||
Net investment income |
9 | 33 | 25 | 60 | 55 | 173 | ||||||||||||||||||
Net investment gains (losses) |
(16 | ) | (21 | ) | (65 | ) | (61 | ) | (162 | ) | (309 | ) | ||||||||||||
Insurance and investment product fees and other |
3 | 22 | 12 | 41 | 75 | 150 | ||||||||||||||||||
Total revenues |
(4 | ) | 34 | (28 | ) | 41 | (31 | ) | 16 | |||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
| | 2 | | | 2 | ||||||||||||||||||
Interest credited |
39 | 40 | 39 | 79 | 89 | 247 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
8 | 17 | 9 | 15 | 11 | 52 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
4 | 4 | 5 | 3 | 5 | 17 | ||||||||||||||||||
Interest expense |
70 | 59 | 58 | 66 | 62 | 245 | ||||||||||||||||||
Total benefits and expenses |
121 | 120 | 113 | 163 | 167 | 563 | ||||||||||||||||||
LOSS BEFORE INCOME TAXES |
(125 | ) | (86 | ) | (141 | ) | (122 | ) | (198 | ) | (547 | ) | ||||||||||||
Benefit from income taxes |
(157 | ) | (8 | ) | (67 | ) | (17 | ) | (102 | ) | (194 | ) | ||||||||||||
NET INCOME (LOSS) |
32 | (78 | ) | (74 | ) | (105 | ) | (96 | ) | (353 | ) | |||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
11 | 16 | 41 | 38 | 106 | 201 | ||||||||||||||||||
Net tax benefit related to separation from the companys former parent |
(106 | ) | | | | | | |||||||||||||||||
NET OPERATING INCOME (LOSS) |
$ | (63 | ) | $ | (62 | ) | $ | (33 | ) | $ | (67 | ) | $ | 10 | $ | (152 | ) | |||||||
Effective tax rate (operating income (loss)) |
42.1 | % | 2.8 | % | 57.4 | % | -6.8 | % | 128.5 | % | 36.4 | % | ||||||||||||
Guaranteed Investment Contracts, Funding Agreements Backing Notes and Funding Agreements: |
||||||||||||||||||||||||
Account value, beginning of period |
$ | 4,502 | $ | 5,053 | $ | 5,555 | $ | 6,677 | $ | 8,104 | $ | 8,104 | ||||||||||||
Surrenders and benefits(2) |
(171 | ) | (596 | ) | (553 | ) | (1,177 | ) | (1,466 | ) | (3,792 | ) | ||||||||||||
Net flows |
(171 | ) | (596 | ) | (553 | ) | (1,177 | ) | (1,466 | ) | (3,792 | ) | ||||||||||||
Interest credited |
43 | 45 | 47 | 52 | 61 | 205 | ||||||||||||||||||
Foreign currency translation |
(2 | ) | | 4 | 3 | (22 | ) | (15 | ) | |||||||||||||||
Account value, end of period |
$ | 4,372 | $ | 4,502 | $ | 5,053 | $ | 5,555 | $ | 6,677 | $ | 4,502 | ||||||||||||
(1) | Includes inter-segment eliminations and non-strategic products. |
(2) | The company has included in surrenders and benefits the early retirement of institutional contracts at a discount to contract values. |
54
Additional Financial Data
55
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Investments Summary
(amounts in millions)
March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | ||||||||||||||||||||||||||||||
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: |
||||||||||||||||||||||||||||||||||
Public fixed maturity securities |
$ | 28,675 | 41 | % | $ | 27,137 | 40 | % | $ | 26,018 | 38 | % | $ | 23,107 | 35 | % | $ | 20,951 | 32 | % | ||||||||||||||
Private fixed maturity securities |
9,397 | 14 | 9,231 | 14 | 8,622 | 12 | 8,235 | 12 | 7,706 | 12 | ||||||||||||||||||||||||
Residential mortgage-backed securities(1) |
3,141 | 5 | 2,595 | 4 | 1,947 | 3 | 2,179 | 4 | 2,228 | 4 | ||||||||||||||||||||||||
Commercial mortgage-backed securities |
3,457 | 5 | 3,433 | 5 | 3,715 | 5 | 3,538 | 5 | 3,605 | 5 | ||||||||||||||||||||||||
Other asset-backed securities |
2,186 | 3 | 2,205 | 3 | 1,814 | 3 | 1,909 | 3 | 1,885 | 3 | ||||||||||||||||||||||||
Tax-exempt |
1,415 | 2 | 1,521 | 2 | 2,177 | 3 | 2,388 | 4 | 2,463 | 4 | ||||||||||||||||||||||||
Non-investment grade fixed maturity securities |
3,769 | 5 | 3,630 | 5 | 3,453 | 5 | 2,966 | 5 | 2,481 | 4 | ||||||||||||||||||||||||
Equity securities: |
||||||||||||||||||||||||||||||||||
Common stocks and mutual funds |
82 | | 94 | | 105 | | 113 | | 107 | | ||||||||||||||||||||||||
Preferred stocks |
97 | | 65 | | 59 | | 139 | 1 | 114 | | ||||||||||||||||||||||||
Commercial mortgage loans |
7,336 | 10 | 7,499 | 11 | 7,704 | 11 | 7,872 | 12 | 8,023 | 12 | ||||||||||||||||||||||||
Restricted commercial mortgage loans related to securitization entities |
552 | 1 | | | | | | | | | ||||||||||||||||||||||||
Policy loans |
1,408 | 2 | 1,403 | 2 | 1,408 | 2 | 2,087 | 3 | 1,842 | 3 | ||||||||||||||||||||||||
Cash, cash equivalents and short-term investments |
4,763 | 7 | 6,592 | 10 | 8,177 | 12 | 6,845 | 10 | 8,163 | 13 | ||||||||||||||||||||||||
Securities lending |
593 | 1 | 853 | 1 | 899 | 1 | 958 | 2 | 1,069 | 2 | ||||||||||||||||||||||||
Other invested assets: |
Limited partnerships(2) | 371 | 1 | 430 | 1 | 583 | 1 | 610 | 1 | 658 | 1 | |||||||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||||||||||
LTC forward starting swapcash flow |
69 | | 73 | | 281 | 1 | 188 | 1 | 354 | 1 | ||||||||||||||||||||||||
Other cash flow |
101 | | 101 | | 123 | | 76 | | 68 | | ||||||||||||||||||||||||
Fair value |
151 | | 156 | | 180 | | 170 | | 231 | | ||||||||||||||||||||||||
Equity index optionsnon-qualified |
34 | | 39 | | 62 | | 110 | | 154 | | ||||||||||||||||||||||||
LTC swaptionsnon-qualified |
14 | | 54 | | 195 | | 161 | | 527 | 1 | ||||||||||||||||||||||||
Other non-qualified |
490 | 1 | 523 | 1 | 417 | 1 | 485 | 1 | 427 | 1 | ||||||||||||||||||||||||
Trading portfolio | 167 | | 174 | | 180 | | 163 | | 156 | | ||||||||||||||||||||||||
Counterparty collateral | 628 | 1 | 647 | 1 | 937 | 2 | 833 | 1 | 1,248 | 2 | ||||||||||||||||||||||||
Restricted other invested assets related to securitization entities | 385 | 1 | | | | | | | | | ||||||||||||||||||||||||
Other | 57 | | 62 | | 59 | | 80 | | 89 | | ||||||||||||||||||||||||
Total invested assets and cash |
$ | 69,338 | 100 | % | $ | 68,517 | 100 | % | $ | 69,115 | 100 | % | $ | 65,212 | 100 | % | $ | 64,549 | 100 | % | ||||||||||||||
Public Fixed Maturity SecuritiesCredit Quality: | ||||||||||||||||||||||||||||||||||
Rating Agency Designation | ||||||||||||||||||||||||||||||||||
AAA |
$ | 13,625 | 35 | % | $ | 12,516 | 34 | % | $ | 10,880 | 30 | % | $ | 9,188 | 28 | % | $ | 8,934 | 29 | % | ||||||||||||||
AA |
4,808 | 12 | 4,632 | 12 | 4,869 | 14 | 5,105 | 15 | 4,417 | 15 | ||||||||||||||||||||||||
A |
11,034 | 28 | 10,634 | 29 | 10,883 | 30 | 10,261 | 31 | 9,618 | 31 | ||||||||||||||||||||||||
BBB |
7,561 | 19 | 7,247 | 19 | 7,265 | 20 | 6,798 | 20 | 6,218 | 20 | ||||||||||||||||||||||||
BB |
1,441 | 4 | 1,339 | 4 | 1,264 | 4 | 1,278 | 4 | 971 | 3 | ||||||||||||||||||||||||
B |
454 | 1 | 414 | 1 | 522 | 1 | 447 | 1 | 399 | 1 | ||||||||||||||||||||||||
CCC and lower |
400 | 1 | 376 | 1 | 409 | 1 | 207 | 1 | 190 | 1 | ||||||||||||||||||||||||
Not rated |
| | | | 27 | | | | 17 | | ||||||||||||||||||||||||
Total public fixed maturity securities |
$ | 39,323 | 100 | % | $ | 37,158 | 100 | % | $ | 36,119 | 100 | % | $ | 33,284 | 100 | % | $ | 30,764 | 100 | % | ||||||||||||||
Private Fixed Maturity SecuritiesCredit Quality: | ||||||||||||||||||||||||||||||||||
Rating Agency Designation | ||||||||||||||||||||||||||||||||||
AAA |
$ | 1,311 | 10 | % | $ | 1,271 | 10 | % | $ | 1,196 | 10 | % | $ | 1,334 | 12 | % | $ | 1,389 | 13 | % | ||||||||||||||
AA |
1,134 | 9 | 1,021 | 8 | 1,041 | 9 | 986 | 9 | 959 | 9 | ||||||||||||||||||||||||
A |
3,889 | 31 | 3,815 | 30 | 3,540 | 31 | 3,244 | 30 | 3,233 | 31 | ||||||||||||||||||||||||
BBB |
4,909 | 38 | 4,986 | 40 | 4,619 | 39 | 4,440 | 40 | 4,070 | 38 | ||||||||||||||||||||||||
BB |
1,184 | 10 | 1,247 | 10 | 905 | 8 | 801 | 7 | 775 | 8 | ||||||||||||||||||||||||
B |
151 | 1 | 156 | 1 | 212 | 2 | 128 | 1 | 102 | 1 | ||||||||||||||||||||||||
CCC and lower |
139 | 1 | 98 | 1 | 114 | 1 | 105 | 1 | 27 | | ||||||||||||||||||||||||
Total private fixed maturity securities |
$ | 12,717 | 100 | % | $ | 12,594 | 100 | % | $ | 11,627 | 100 | % | $ | 11,038 | 100 | % | $ | 10,555 | 100 | % | ||||||||||||||
(1) The company does not have any material exposure to residential mortgage-backed securities collateralized debt obligations (CDOs). |
||||||||||||||||||||||||||||||||||
(2) Limited partnerships by type: |
||||||||||||||||||||||||||||||||||
Real estate |
$ | 159 | $ | 201 | $ | 213 | $ | 236 | $ | 258 | ||||||||||||||||||||||||
Infrastructure |
113 | 109 | 144 | 147 | 152 | |||||||||||||||||||||||||||||
Other |
99 | 120 | 226 | 227 | 248 | |||||||||||||||||||||||||||||
Total limited partnerships |
$ | 371 | $ | 430 | $ | 583 | $ | 610 | $ | 658 | ||||||||||||||||||||||||
56
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Fixed Maturity Securities Summary
(amounts in millions)
March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | ||||||||||||||||||||||||||
Fair Value |
% of Total |
Fair Value |
% of Total |
Fair Value |
% of Total |
Fair Value |
% of Total |
Fair Value |
% of Total |
|||||||||||||||||||||
Fixed Maturity SecuritiesSecurity Sector: |
||||||||||||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises |
$ | 3,029 | 6 | % | $ | 2,602 | 5 | % | $ | 2,166 | 5 | % | $ | 1,249 | 3 | % | $ | 994 | 2 | % | ||||||||||
Tax-exempt |
1,436 | 3 | 1,544 | 3 | 2,201 | 5 | 2,406 | 5 | 2,464 | 6 | ||||||||||||||||||||
Foreign government |
2,414 | 5 | 2,384 | 5 | 2,254 | 5 | 1,854 | 4 | 1,672 | 4 | ||||||||||||||||||||
U.S. corporate |
22,253 | 43 | 21,412 | 43 | 20,752 | 43 | 19,691 | 44 | 18,142 | 44 | ||||||||||||||||||||
Foreign corporate |
13,151 | 25 | 12,551 | 25 | 12,049 | 25 | 10,874 | 25 | 9,814 | 24 | ||||||||||||||||||||
Residential mortgage-backed securities |
3,810 | 7 | 3,227 | 7 | 2,584 | 5 | 2,644 | 6 | 2,619 | 6 | ||||||||||||||||||||
Commercial mortgage-backed securities |
3,693 | 7 | 3,617 | 7 | 3,886 | 8 | 3,632 | 9 | 3,685 | 9 | ||||||||||||||||||||
Other asset-backed securities |
2,254 | 4 | 2,415 | 5 | 1,854 | 4 | 1,972 | 4 | 1,929 | 5 | ||||||||||||||||||||
Total fixed maturity securities |
$ | 52,040 | 100 | % | $ | 49,752 | 100 | % | $ | 47,746 | 100 | % | $ | 44,322 | 100 | % | $ | 41,319 | 100 | % | ||||||||||
Corporate Bond HoldingsIndustry Sector: |
||||||||||||||||||||||||||||||
Investment Grade: |
||||||||||||||||||||||||||||||
Finance and insurance |
$ | 8,440 | 26 | % | $ | 8,917 | 28 | % | $ | 8,754 | 29 | % | $ | 8,496 | 30 | % | $ | 7,676 | 29 | % | ||||||||||
Utilities and energy |
7,460 | 23 | 7,064 | 22 | 6,896 | 23 | 6,360 | 22 | 5,831 | 22 | ||||||||||||||||||||
Consumernon-cyclical |
3,728 | 11 | 3,622 | 12 | 3,660 | 12 | 3,422 | 12 | 3,334 | 13 | ||||||||||||||||||||
Consumercyclical |
1,559 | 5 | 1,456 | 5 | 1,487 | 5 | 1,461 | 5 | 1,496 | 6 | ||||||||||||||||||||
Capital goods |
1,990 | 6 | 1,997 | 6 | 1,778 | 6 | 1,655 | 6 | 1,621 | 6 | ||||||||||||||||||||
Industrial |
1,431 | 4 | 1,372 | 4 | 1,340 | 4 | 1,244 | 4 | 1,160 | 4 | ||||||||||||||||||||
Technology and communications |
1,925 | 6 | 1,876 | 6 | 1,818 | 6 | 1,592 | 6 | 1,501 | 6 | ||||||||||||||||||||
Transportation |
1,240 | 4 | 1,129 | 4 | 1,253 | 4 | 1,201 | 4 | 1,109 | 4 | ||||||||||||||||||||
Other |
5,101 | 15 | 4,232 | 13 | 3,517 | 11 | 3,070 | 11 | 2,507 | 10 | ||||||||||||||||||||
Subtotal |
$ | 32,874 | 100 | % | $ | 31,665 | 100 | % | $ | 30,503 | 100 | % | $ | 28,501 | 100 | % | $ | 26,235 | 100 | % | ||||||||||
Non-Investment Grade: |
||||||||||||||||||||||||||||||
Finance and insurance |
$ | 669 | 26 | % | $ | 549 | 24 | % | $ | 578 | 25 | % | $ | 501 | 24 | % | $ | 334 | 19 | % | ||||||||||
Utilities and energy |
240 | 10 | 236 | 10 | 241 | 10 | 222 | 11 | 202 | 12 | ||||||||||||||||||||
Consumernon-cyclical |
322 | 13 | 340 | 15 | 286 | 12 | 255 | 12 | 275 | 16 | ||||||||||||||||||||
Consumercyclical |
210 | 8 | 181 | 8 | 183 | 8 | 151 | 7 | 112 | 7 | ||||||||||||||||||||
Capital goods |
379 | 15 | 351 | 15 | 360 | 16 | 363 | 18 | 321 | 19 | ||||||||||||||||||||
Industrial |
354 | 14 | 347 | 15 | 361 | 16 | 290 | 14 | 238 | 14 | ||||||||||||||||||||
Technology and communications |
226 | 9 | 167 | 7 | 183 | 8 | 180 | 9 | 163 | 9 | ||||||||||||||||||||
Transportation |
77 | 3 | 60 | 3 | 64 | 3 | 62 | 3 | 59 | 3 | ||||||||||||||||||||
Other |
53 | 2 | 67 | 3 | 42 | 2 | 40 | 2 | 17 | 1 | ||||||||||||||||||||
Subtotal |
$ | 2,530 | 100 | % | $ | 2,298 | 100 | % | $ | 2,298 | 100 | % | $ | 2,064 | 100 | % | $ | 1,721 | 100 | % | ||||||||||
Total |
$ | 35,404 | 100 | % | $ | 33,963 | 100 | % | $ | 32,801 | 100 | % | $ | 30,565 | 100 | % | $ | 27,956 | 100 | % | ||||||||||
Fixed Maturity SecuritiesContractual Maturity Dates: |
||||||||||||||||||||||||||||||
Due in one year or less |
$ | 2,660 | 5 | % | $ | 2,217 | 4 | % | $ | 1,897 | 4 | % | $ | 1,764 | 4 | % | $ | 1,677 | 4 | % | ||||||||||
Due after one year through five years |
12,582 | 24 | 12,400 | 25 | 12,247 | 26 | 11,429 | 26 | 10,048 | 24 | ||||||||||||||||||||
Due after five years through ten years |
8,152 | 16 | 7,950 | 16 | 7,862 | 16 | 7,334 | 17 | 7,081 | 17 | ||||||||||||||||||||
Due after ten years |
18,889 | 36 | 17,926 | 36 | 17,416 | 37 | 15,547 | 35 | 14,280 | 35 | ||||||||||||||||||||
Subtotal |
42,283 | 81 | 40,493 | 81 | 39,422 | 83 | 36,074 | 82 | 33,086 | 80 | ||||||||||||||||||||
Mortgage and asset-backed |
9,757 | 19 | 9,259 | 19 | 8,324 | 17 | 8,248 | 18 | 8,233 | 20 | ||||||||||||||||||||
Total fixed maturity securities |
$ | 52,040 | 100 | % | $ | 49,752 | 100 | % | $ | 47,746 | 100 | % | $ | 44,322 | 100 | % | $ | 41,319 | 100 | % | ||||||||||
57
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Additional Information on Mortgage-backed and Asset-backed Securities By Vintage As of March 31, 2010(1)
(amounts in millions)
Mortgage-backed and Asset-backed Securities Collateralized by Sub-prime Residential Mortgage Loans(2) :
Fair Value | Net Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||||||||
S&P Equivalent Rating |
2004 and Prior |
2005 | 2006 | 2007 | 2008 | 2009 | Total | 2004 and Prior |
2005 | 2006 | 2007 | 2008 | 2009 | Total | |||||||||||||||||||||||||||||||||
AAA |
$ | 43 | $ | 10 | $ | | $ | | $ | | $ | | $ | 53 | $ | (4 | ) | $ | (1 | ) | $ | | $ | | $ | | $ | | $ | (5 | ) | ||||||||||||||||
AA |
21 | 20 | | 19 | | | 60 | (6 | ) | (10 | ) | | (8 | ) | | | (24 | ) | |||||||||||||||||||||||||||||
A |
12 | 50 | 4 | | | | 66 | (6 | ) | (30 | ) | (1 | ) | | | | (37 | ) | |||||||||||||||||||||||||||||
BBB |
16 | 6 | 1 | | | | 23 | (7 | ) | (13 | ) | (2 | ) | | | | (22 | ) | |||||||||||||||||||||||||||||
BB |
11 | 13 | 14 | | | | 38 | (10 | ) | (11 | ) | (5 | ) | | | | (26 | ) | |||||||||||||||||||||||||||||
B |
4 | 28 | 41 | | | | 73 | (3 | ) | (15 | ) | (26 | ) | (1 | ) | | | (45 | ) | ||||||||||||||||||||||||||||
CCC and lower |
24 | 24 | 63 | 14 | | | 125 | (14 | ) | (55 | ) | (67 | ) | (13 | ) | | | (149 | ) | ||||||||||||||||||||||||||||
Total |
$ | 131 | $ | 151 | $ | 123 | $ | 33 | $ | | $ | | $ | 438 | $ | (50 | ) | $ | (135 | ) | $ | (101 | ) | $ | (22 | ) | $ | | $ | | $ | (308 | ) | ||||||||||||||
Mortgage-backed and Asset-backed Securities Collateralized by Alt-A Residential Mortgage Loans:
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Net Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||||||||
S&P Equivalent Rating |
2004 and Prior |
2005 | 2006 | 2007 | 2008 | 2009 | Total | 2004 and Prior |
2005 | 2006 | 2007 | 2008 | 2009 | Total | |||||||||||||||||||||||||||||||||
AAA |
$ | 44 | $ | | $ | 1 | $ | | $ | | $ | | $ | 45 | $ | (7 | ) | $ | | $ | | $ | | $ | | $ | | $ | (7 | ) | |||||||||||||||||
AA |
8 | 27 | 1 | | | | 36 | (2 | ) | (4 | ) | (2 | ) | | | | (8 | ) | |||||||||||||||||||||||||||||
A |
18 | 23 | 1 | 7 | | | 49 | (2 | ) | (8 | ) | (3 | ) | | | | (13 | ) | |||||||||||||||||||||||||||||
BBB |
23 | 1 | 3 | | | | 27 | (19 | ) | (9 | ) | (10 | ) | | | | (38 | ) | |||||||||||||||||||||||||||||
BB |
| 4 | | 4 | | | 8 | (5 | ) | (2 | ) | | (4 | ) | | | (11 | ) | |||||||||||||||||||||||||||||
B |
3 | 20 | 29 | 5 | | | 57 | (6 | ) | (23 | ) | (22 | ) | (4 | ) | | | (55 | ) | ||||||||||||||||||||||||||||
CCC and lower |
4 | 70 | 33 | 29 | | | 136 | (34 | ) | (59 | ) | (16 | ) | (21 | ) | | | (130 | ) | ||||||||||||||||||||||||||||
Total |
$ | 100 | $ | 145 | $ | 68 | $ | 45 | $ | | $ | | $ | 358 | $ | (75 | ) | $ | (105 | ) | $ | (53 | ) | $ | (29 | ) | $ | | $ | | $ | (262 | ) | ||||||||||||||
Commercial Mortgage-backed Securities(3): |
|||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Net Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||||||||
S&P Equivalent Rating |
2004 and Prior |
2005 | 2006 | 2007 | 2008 | 2009 | Total | 2004 and Prior |
2005 | 2006 | 2007 | 2008 | 2009 | Total | |||||||||||||||||||||||||||||||||
AAA |
$ | 1,960 | $ | 337 | $ | 349 | $ | 119 | $ | | $ | 25 | $ | 2,790 | $ | 68 | $ | (6 | ) | $ | (27 | ) | $ | (2 | ) | $ | | $ | | $ | 33 | ||||||||||||||||
AA |
40 | 46 | 114 | 68 | | | 268 | (23 | ) | (16 | ) | (50 | ) | (8 | ) | | | (97 | ) | ||||||||||||||||||||||||||||
A |
41 | 27 | 68 | 100 | | | 236 | (31 | ) | (27 | ) | (35 | ) | (56 | ) | | | (149 | ) | ||||||||||||||||||||||||||||
BBB |
49 | 18 | 25 | 71 | | | 163 | (24 | ) | (35 | ) | (27 | ) | (71 | ) | | | (157 | ) | ||||||||||||||||||||||||||||
BB |
33 | 6 | 44 | 54 | | | 137 | (21 | ) | (11 | ) | (35 | ) | (34 | ) | | | (101 | ) | ||||||||||||||||||||||||||||
B |
15 | | 8 | 21 | | | 44 | (4 | ) | | (9 | ) | (33 | ) | | | (46 | ) | |||||||||||||||||||||||||||||
CCC and lower |
12 | 5 | 38 | | | | 55 | 2 | (14 | ) | (21 | ) | | | | (33 | ) | ||||||||||||||||||||||||||||||
Total |
$ | 2,150 | $ | 439 | $ | 646 | $ | 433 | $ | | $ | 25 | $ | 3,693 | $ | (33 | ) | $ | (109 | ) | $ | (204 | ) | $ | (204 | ) | $ | | $ | | $ | (550 | ) | ||||||||||||||
(1) | Based on current ratings. |
(2) | The sub-prime securities are principally backed by first lien mortgages. The company does not have a significant exposure to second liens or option adjustable rate mortgages. The company does not have any material exposure to mezzanine CDOs. The company does not have any exposure to net interest margin deals, highly leveraged transactions or CDO-squared investments. |
(3) | As of March 31, 2010, 39% of the commercial mortgage-backed securities related to loans with fixed interest rates and 61% related to loans with floating interest rates. The average original loan-to-value ratio for commercial mortgage-backed securities included in the fixed maturity securities portfolio was 62%. |
58
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Commercial Mortgage Loans Summary
(amounts in millions)
March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | |||||||||||||||||||||||||||||||
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
||||||||||||||||||||||||||
Geographic Region |
|||||||||||||||||||||||||||||||||||
Pacific |
$ | 1,966 | 27 | % | $ | 2,005 | 27 | % | $ | 2,025 | 26 | % | $ | 2,065 | 26 | % | $ | 2,093 | 26 | % | |||||||||||||||
South Atlantic |
1,669 | 23 | 1,711 | 23 | 1,834 | 24 | 1,864 | 24 | 1,901 | 24 | |||||||||||||||||||||||||
Middle Atlantic |
987 | 13 | 1,005 | 13 | 1,016 | 13 | 1,040 | 13 | 1,049 | 13 | |||||||||||||||||||||||||
East North Central |
714 | 10 | 728 | 10 | 742 | 10 | 766 | 10 | 779 | 10 | |||||||||||||||||||||||||
Mountain |
640 | 9 | 650 | 9 | 658 | 9 | 684 | 9 | 697 | 9 | |||||||||||||||||||||||||
West South Central |
325 | 4 | 331 | 4 | 337 | 4 | 343 | 4 | 348 | 4 | |||||||||||||||||||||||||
West North Central |
385 | 5 | 389 | 5 | 396 | 5 | 400 | 5 | 411 | 5 | |||||||||||||||||||||||||
East South Central |
210 | 3 | 230 | 3 | 237 | 3 | 241 | 3 | 247 | 3 | |||||||||||||||||||||||||
New England |
486 | 6 | 492 | 6 | 493 | 6 | 495 | 6 | 520 | 6 | |||||||||||||||||||||||||
Subtotal |
7,382 | 100 | % | 7,541 | 100 | % | 7,738 | 100 | % | 7,898 | 100 | % | 8,045 | 100 | % | ||||||||||||||||||||
Allowance for losses |
(52 | ) | (48 | ) | (41 | ) | (33 | ) | (29 | ) | |||||||||||||||||||||||||
Unamortized fees and costs |
6 | 6 | 7 | 7 | 7 | ||||||||||||||||||||||||||||||
Total |
$ | 7,336 | $ | 7,499 | $ | 7,704 | $ | 7,872 | $ | 8,023 | |||||||||||||||||||||||||
Property Type |
|||||||||||||||||||||||||||||||||||
Office |
$ | 1,991 | 27 | % | $ | 2,025 | 27 | % | $ | 2,052 | 27 | % | $ | 2,097 | 26 | % | $ | 2,125 | 26 | % | |||||||||||||||
Industrial |
1,955 | 27 | 1,979 | 26 | 2,008 | 26 | 2,047 | 26 | 2,099 | 26 | |||||||||||||||||||||||||
Retail |
2,074 | 28 | 2,115 | 28 | 2,246 | 29 | 2,286 | 29 | 2,320 | 29 | |||||||||||||||||||||||||
Apartments |
819 | 11 | 832 | 11 | 847 | 11 | 855 | 11 | 881 | 11 | |||||||||||||||||||||||||
Mixed use/other |
543 | 7 | 590 | 8 | 585 | 7 | 613 | 8 | 620 | 8 | |||||||||||||||||||||||||
Subtotal |
7,382 | 100 | % | 7,541 | 100 | % | 7,738 | 100 | % | 7,898 | 100 | % | 8,045 | 100 | % | ||||||||||||||||||||
Allowance for losses |
(52 | ) | (48 | ) | (41 | ) | (33 | ) | (29 | ) | |||||||||||||||||||||||||
Unamortized fees and costs |
6 | 6 | 7 | 7 | 7 | ||||||||||||||||||||||||||||||
Total |
$ | 7,336 | $ | 7,499 | $ | 7,704 | $ | 7,872 | $ | 8,023 | |||||||||||||||||||||||||
Allowance for Losses onm Commercial Mortgage Loans |
|||||||||||||||||||||||||||||||||||
Beginning balance |
$ | 48 | $ | 41 | $ | 33 | $ | 29 | $ | 23 | |||||||||||||||||||||||||
Provisions |
4 | 7 | 8 | 4 | 6 | ||||||||||||||||||||||||||||||
Releases |
| | | | | ||||||||||||||||||||||||||||||
Ending balance |
$ | 52 | $ | 48 | $ | 41 | $ | 33 | $ | 29 | |||||||||||||||||||||||||
59
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Commercial Mortgage Loans Summary
(amounts in millions)
March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | |||||||||||||||||||||||||||
Loan Size |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
|||||||||||||||||||||
Under $5 million |
$ | 3,069 | 41 | % | $ | 3,146 | 42 | % | $ | 3,170 | 41 | % | $ | 3,265 | 41 | % | $ | 3,314 | 41 | % | |||||||||||
$5 million but less than $10 million |
1,670 | 23 | 1,711 | 23 | 1,754 | 23 | 1,783 | 23 | 1,853 | 23 | |||||||||||||||||||||
$10 million but less than $20 million |
1,378 | 19 | 1,418 | 19 | 1,449 | 19 | 1,460 | 19 | 1,481 | 19 | |||||||||||||||||||||
$20 million but less than $30 million |
311 | 4 | 312 | 4 | 314 | 4 | 335 | 4 | 337 | 4 | |||||||||||||||||||||
$30 million and over |
954 | 13 | 955 | 12 | 1,046 | 13 | 1,047 | 13 | 1,049 | 13 | |||||||||||||||||||||
Subtotal |
7,382 | 100 | % | 7,542 | 100 | % | 7,733 | 100 | % | 7,890 | 100 | % | 8,034 | 100 | % | ||||||||||||||||
Net premium/discount |
| (1 | ) | 5 | 8 | 11 | |||||||||||||||||||||||||
Total |
$ | 7,382 | $ | 7,541 | $ | 7,738 | $ | 7,898 | $ | 8,045 | |||||||||||||||||||||
Commercial Mortgage Loan Information by Vintage
(loan amounts in millions)
March 31, 2010
Loan Year |
Total Loan Balance | Delinquent Loan Balance |
Number of Loans | Number of Delinquent Loans |
Average Balance Per Loan |
Average Balance Per Delinquent Loan |
Average Loan-To-Value(1) |
||||||||||||
2004 and prior |
$ | 2,561 | $ | 17 | 1,016 | 6 | $ | 3 | $ | 3 | 49 | % | |||||||
2005 |
1,577 | | 319 | | $ | 5 | $ | | 64 | % | |||||||||
2006 |
1,508 | 21 | 289 | 4 | $ | 5 | $ | 5 | 72 | % | |||||||||
2007 |
1,442 | 11 | 200 | 4 | $ | 7 | $ | 3 | 82 | % | |||||||||
2008 |
294 | 2 | 60 | 1 | $ | 5 | $ | 2 | 78 | % | |||||||||
Total |
$ | 7,382 | $ | 51 | 1,884 | 15 | $ | 4 | $ | 3 | 65 | % | |||||||
(1) | Represents loan-to-value as of March 31, 2010. |
60
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
General Account GAAP Net Investment Income Yields
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
GAAP Net Investment Income |
||||||||||||||||||||||||
Fixed maturity securitiestaxable |
$ | 626 | $ | 621 | $ | 610 | $ | 604 | $ | 623 | $ | 2,458 | ||||||||||||
Fixed maturity securitiesnon-taxable |
16 | 22 | 27 | 28 | 30 | 107 | ||||||||||||||||||
Commercial mortgage loans |
104 | 103 | 106 | 109 | 114 | 432 | ||||||||||||||||||
Restricted commercial mortgage loans related to securitization entities(1) |
10 | | | | | | ||||||||||||||||||
Equity securities |
2 | 4 | 6 | 3 | 3 | 16 | ||||||||||||||||||
Other invested assets |
32 | 20 | 24 | 26 | 8 | 78 | ||||||||||||||||||
Limited partnerships(2) |
(34 | ) | | (20 | ) | (33 | ) | (107 | ) | (160 | ) | |||||||||||||
Restricted other invested assets related to securitization entities(1) |
1 | | | | | | ||||||||||||||||||
Policy loans |
27 | 28 | 19 | 52 | 44 | 143 | ||||||||||||||||||
Cash, cash equivalents and short-term investments |
5 | 9 | 9 | 14 | 17 | 49 | ||||||||||||||||||
Gross investment income before expenses and fees |
789 | 807 | 781 | 803 | 732 | 3,123 | ||||||||||||||||||
Expenses and fees |
(24 | ) | (25 | ) | (22 | ) | (22 | ) | (21 | ) | (90 | ) | ||||||||||||
Net investment income |
$ | 765 | $ | 782 | $ | 759 | $ | 781 | $ | 711 | $ | 3,033 | ||||||||||||
Annualized Yields |
||||||||||||||||||||||||
Fixed maturity securitiestaxable |
4.9 | % | 5.1 | % | 5.2 | % | 5.2 | % | 5.4 | % | 5.2 | % | ||||||||||||
Fixed maturity securitiesnon-taxable |
4.3 | % | 4.6 | % | 4.6 | % | 4.6 | % | 4.6 | % | 4.7 | % | ||||||||||||
Commercial mortgage loans |
5.8 | % | 5.4 | % | 5.5 | % | 5.5 | % | 5.6 | % | 5.5 | % | ||||||||||||
Restricted commercial mortgage loans related to securitization entities(1) |
7.3 | % | | % | | % | | % | | % | | % | ||||||||||||
Equity securities |
6.6 | % | 9.5 | % | 12.8 | % | 3.6 | % | 4.6 | % | 7.0 | % | ||||||||||||
Other invested assets |
15.0 | % | 7.1 | % | 7.7 | % | 7.6 | % | 1.8 | % | 5.5 | % | ||||||||||||
Limited partnerships(2) |
-34.0 | % | -0.1 | % | -13.4 | % | -21.3 | % | -62.1 | % | -26.8 | % | ||||||||||||
Restricted other invested assets related to securitization entities(1) |
1.0 | % | | % | | % | | % | | % | | % | ||||||||||||
Policy loans |
7.7 | % | 8.1 | % | 4.4 | % | 10.5 | % | 9.6 | % | 8.4 | % | ||||||||||||
Cash, cash equivalents and short-term investments |
0.4 | % | 0.5 | % | 0.5 | % | 0.7 | % | 0.8 | % | 0.6 | % | ||||||||||||
Gross investment income before expenses and fees |
4.6 | % | 4.7 | % | 4.5 | % | 4.7 | % | 4.2 | % | 4.5 | % | ||||||||||||
Expenses and fees |
-0.2 | % | -0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | ||||||||||||
Net investment income |
4.4 | % | 4.6 | % | 4.4 | % | 4.6 | % | 4.1 | % | 4.4 | % | ||||||||||||
Yields for fixed maturity securities and equity securities are based on amortized cost and cost, respectively. Yields for securities lending activity, which is included in other invested assets, are calculated net of the corresponding securities lending liability. |
(1) | Represents investment income and yields related to restricted commercial mortgage loans and other invested assets required to be consolidated under a new accounting standard effective January 1, 2010. |
(2) | Limited partnership investments are equity-based and do not have fixed returns by period. |
61
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Net Investment Gains (Losses), Net of Taxes and Other AdjustmentsDetail
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
Net realized gains (losses) on available-for-sale securities: |
||||||||||||||||||||||||
Fixed maturity securities: |
||||||||||||||||||||||||
U.S. corporate |
$ | (6 | ) | $ | (7 | ) | $ | (13 | ) | $ | (9 | ) | $ | (28 | ) | $ | (57 | ) | ||||||
U.S. government, agencies and government-sponsored enterprises |
(4 | ) | 11 | | | | 11 | |||||||||||||||||
Foreign corporate |
2 | 8 | 10 | (1 | ) | (1 | ) | 16 | ||||||||||||||||
Foreign government |
(2 | ) | 2 | 1 | 1 | 2 | 6 | |||||||||||||||||
Tax-exempt |
4 | 20 | 26 | | 1 | 47 | ||||||||||||||||||
Mortgage-backed securities |
(3 | ) | (3 | ) | 4 | (2 | ) | 4 | 3 | |||||||||||||||
Asset-backed securities |
(1 | ) | | (4 | ) | (8 | ) | | (12 | ) | ||||||||||||||
Equity securities |
| 2 | 1 | 1 | | 4 | ||||||||||||||||||
Foreign exchange |
| (2 | ) | 3 | | | 1 | |||||||||||||||||
Total net realized gains (losses) on available-for-sale securities |
(10 | ) | 31 | 28 | (18 | ) | (22 | ) | 19 | |||||||||||||||
Impairments: |
||||||||||||||||||||||||
Sub-prime residential mortgage-backed securities: |
||||||||||||||||||||||||
AA |
| (2 | ) | (1 | ) | | (11 | ) | (14 | ) | ||||||||||||||
A |
| (1 | ) | | | (1 | ) | (2 | ) | |||||||||||||||
BBB |
| (1 | ) | (2 | ) | (3 | ) | (3 | ) | (9 | ) | |||||||||||||
Below BBB |
(16 | ) | (25 | ) | (25 | ) | (23 | ) | (33 | ) | (106 | ) | ||||||||||||
Alt-A residential mortgage-backed securities: |
||||||||||||||||||||||||
AA |
| | | (6 | ) | (6 | ) | (12 | ) | |||||||||||||||
A |
| | | (1 | ) | (18 | ) | (19 | ) | |||||||||||||||
BBB |
| | | | (1 | ) | (1 | ) | ||||||||||||||||
Below BBB |
(8 | ) | (18 | ) | (19 | ) | (11 | ) | (58 | ) | (106 | ) | ||||||||||||
Total sub-prime and Alt-A residential mortgage-backed securities |
(24 | ) | (47 | ) | (47 | ) | (44 | ) | (131 | ) | (269 | ) | ||||||||||||
Prime residential mortgage-backed securities: |
||||||||||||||||||||||||
AA |
| | | | (12 | ) | (12 | ) | ||||||||||||||||
A |
| | | (1 | ) | (8 | ) | (9 | ) | |||||||||||||||
BBB |
| | | | (3 | ) | (3 | ) | ||||||||||||||||
Below BBB |
(6 | ) | (10 | ) | (13 | ) | (18 | ) | (1 | ) | (42 | ) | ||||||||||||
Other mortgage-backed securities |
| | | | | | ||||||||||||||||||
Other asset-backed securities |
(10 | ) | | | (2 | ) | (9 | ) | (11 | ) | ||||||||||||||
Commercial mortgage-backed securities (CMBS): |
||||||||||||||||||||||||
A |
| (1 | ) | | | (9 | ) | (10 | ) | |||||||||||||||
BBB |
| | (2 | ) | | | (2 | ) | ||||||||||||||||
Below BBB |
(1 | ) | (1 | ) | (1 | ) | (6 | ) | (10 | ) | (18 | ) | ||||||||||||
Corporate fixed maturity securities |
(3 | ) | (6 | ) | (15 | ) | (1 | ) | (37 | ) | (59 | ) | ||||||||||||
Financial hybrid securities |
(4 | ) | (4 | ) | (47 | ) | (4 | ) | (155 | ) | (210 | ) | ||||||||||||
Retained interest on securitized assets |
| | | (23 | ) | | (23 | ) | ||||||||||||||||
Limited partnerships |
(4 | ) | | | | | | |||||||||||||||||
Equity securities |
| | | | (13 | ) | (13 | ) | ||||||||||||||||
Commercial mortgage loans |
| (5 | ) | (2 | ) | | | (7 | ) | |||||||||||||||
Total impairments |
(52 | ) | (74 | ) | (127 | ) | (99 | ) | (388 | ) | (688 | ) | ||||||||||||
Net unrealized gains (losses) on trading securities |
4 | 5 | 10 | 7 | (8 | ) | 14 | |||||||||||||||||
Derivative instruments |
(5 | ) | 6 | 12 | 75 | (79 | ) | 14 | ||||||||||||||||
Bank loans |
3 | | 4 | 4 | | 8 | ||||||||||||||||||
Limited partnerships |
(1 | ) | (26 | ) | | | | (26 | ) | |||||||||||||||
Commercial mortgage loans held-for-sale market valuation allowance |
(3 | ) | (5 | ) | (6 | ) | (3 | ) | (4 | ) | (18 | ) | ||||||||||||
Net gains (losses) related to securitization entities(1) |
7 | | | | | | ||||||||||||||||||
Other |
11 | | | | | | ||||||||||||||||||
Net investment gains (losses), net of taxes |
(46 | ) | (63 | ) | (79 | ) | (34 | ) | (501 | ) | (677 | ) | ||||||||||||
Adjustment for DAC and other intangible amortization and certain benefit reserves, net of taxes |
5 | 10 | 18 | (25 | ) | 18 | 21 | |||||||||||||||||
Adjustment for net investment (gains) losses attributable to noncontrolling interests, net of taxes |
(1 | ) | (1 | ) | (1 | ) | | | (2 | ) | ||||||||||||||
Net investment gains (losses), net of taxes and other adjustments, available to Genworth Financial, Inc.s common stockholders |
$ | (42 | ) | $ | (54 | ) | $ | (62 | ) | $ | (59 | ) | $ | (483 | ) | $ | (658 | ) | ||||||
(1) | Represents net investment gains (losses) related to restricted commercial mortgage loans and other invested assets required to be consolidated under a new accounting standard effective January 1, 2010. |
62
Reconciliations of Non-GAAP Measures
63
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Reconciliation of Operating ROE
(amounts in millions)
Twelve Month Rolling Average ROE |
Twelve months ended | |||||||||||||||||||
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
||||||||||||||||
GAAP Basis ROE |
||||||||||||||||||||
Net income (loss) available to Genworth Financial, Inc.s common stockholders for the twelve months ended(1) |
$ | 187 | $ | (460 | ) | $ | (821 | ) | $ | (1,098 | ) | $ | (1,157 | ) | ||||||
Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss)(2) |
$ | 12,149 | $ | 12,038 | $ | 12,013 | $ | 12,057 | $ | 12,242 | ||||||||||
GAAP Basis ROE (1) divided by (2) |
1.5 | % | -3.8 | % | -6.8 | % | -9.1 | % | -9.5 | % | ||||||||||
Operating ROE |
||||||||||||||||||||
Net operating income (loss) for the twelve months ended(1) |
$ | 298 | $ | 198 | $ | (103 | ) | $ | 36 | $ | 239 | |||||||||
Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss)(2) |
$ | 12,149 | $ | 12,038 | $ | 12,013 | $ | 12,057 | $ | 12,242 | ||||||||||
Operating ROE (1) divided by (2) |
2.5 | % | 1.6 | % | -0.9 | % | 0.3 | % | 2.0 | % | ||||||||||
Quarterly Average ROE |
Three months ended | |||||||||||||||||||
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
||||||||||||||||
GAAP Basis ROE |
||||||||||||||||||||
Net income (loss) available to Genworth Financial, Inc.s common stockholders for the period ended(3) |
$ | 178 | $ | 40 | $ | 19 | $ | (50 | ) | $ | (469 | ) | ||||||||
Average Genworth Financial, Inc.s stockholders equity for the period, excluding accumulated other comprehensive income (loss)(4) |
$ | 12,492 | $ | 12,417 | $ | 12,117 | $ | 11,683 | $ | 11,758 | ||||||||||
Annualized GAAP Quarterly Basis ROE (3) divided by (4) |
5.7 | % | 1.3 | % | 0.6 | % | -1.7 | % | -16.0 | % | ||||||||||
Operating ROE |
||||||||||||||||||||
Net operating income for the period ended(3) |
$ | 114 | $ | 94 | $ | 81 | $ | 9 | $ | 14 | ||||||||||
Quarterly average Genworth Financial, Inc.s stockholders equity for the period, excluding accumulated other comprehensive income (loss)(4) |
$ | 12,492 | $ | 12,417 | $ | 12,117 | $ | 11,683 | $ | 11,758 | ||||||||||
Annualized Operating Quarterly Basis ROE (3) divided by (4) |
3.7 | % | 3.0 | % | 2.7 | % | 0.3 | % | 0.5 | % |
Non-GAAP Definition for Operating ROE
The company references the non-GAAP financial measure entitled operating return on equity or operating ROE. The company defines operating ROE as net operating income (loss) divided by average ending Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss) in average ending Genworth Financial, Inc.s stockholders equity. Management believes that analysis of operating ROE enhances understanding of the efficiency with which the company deploys its capital. However, operating ROE as defined by the company should not be viewed as a substitute for GAAP net income (loss) available to Genworth Financial, Inc.s common stockholders divided by average ending Genworth Financial, Inc.s stockholders equity. |
(1) | The twelve months ended information is derived by adding the four quarters of net income (loss) available to Genworth Financial, Inc.s common stockholders and net operating income (loss) from page 10 herein. |
(2) | Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss), is derived by averaging ending Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss) for the most recent five quarters. |
(3) | Net income (loss) available to Genworth Financial, Inc.s common stockholders and net operating income from page 8 herein. |
(4) | Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss), is derived by averaging ending Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss). |
64
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Reconciliation of Expense Ratio
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
GAAP Basis Expense Ratio |
||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals(1) |
$ | 475 | $ | 503 | $ | 484 | $ | 456 | $ | 441 | $ | 1,884 | ||||||||||||
Total revenues (2) |
$ | 2,421 | $ | 2,461 | $ | 2,391 | $ | 2,483 | $ | 1,734 | $ | 9,069 | ||||||||||||
Expense ratio(1) divided by (2) |
19.6 | % | 20.4 | % | 20.2 | % | 18.4 | % | 25.4 | % | 20.8 | % | ||||||||||||
GAAP Basis, As AdjustedExpense Ratio |
||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
$ | 475 | $ | 503 | $ | 484 | $ | 456 | $ | 441 | $ | 1,884 | ||||||||||||
Less wealth management business |
66 | 64 | 58 | 55 | 52 | 229 | ||||||||||||||||||
Less lifestyle protection insurance business |
154 | 163 | 169 | 160 | 153 | 645 | ||||||||||||||||||
Adjusted acquisition and operating expenses, net of deferrals (3) |
$ | 255 | $ | 276 | $ | 257 | $ | 241 | $ | 236 | $ | 1,010 | ||||||||||||
Total revenues |
$ | 2,421 | $ | 2,461 | $ | 2,391 | $ | 2,483 | $ | 1,734 | $ | 9,069 | ||||||||||||
Less wealth management business |
81 | 77 | 71 | 67 | 63 | 278 | ||||||||||||||||||
Less lifestyle protection insurance business |
311 | 326 | 336 | 334 | 305 | 1,301 | ||||||||||||||||||
Less net investment gains (losses) |
(72 | ) | (96 | ) | (118 | ) | (53 | ) | (756 | ) | (1,023 | ) | ||||||||||||
Adjusted total revenues (4) |
$ | 2,101 | $ | 2,154 | $ | 2,102 | $ | 2,135 | $ | 2,122 | $ | 8,513 | ||||||||||||
Adjusted expense ratio (3) divided by (4) |
12.1 | % | 12.8 | % | 12.2 | % | 11.3 | % | 11.1 | % | 11.9 | % | ||||||||||||
Non-GAAP Definition for Expense Ratio
The company references the non-GAAP financial measure entitled expense ratio as a measure of productivity. The company defines expense ratio as acquisition and operating expenses, net of deferrals, divided by total revenues, excluding the effects of the companys wealth management and lifestyle protection insurance businesses. The wealth management and lifestyle protection insurance businesses are excluded from this ratio as their expense bases are comprised of varying levels of non-deferrable acquisition costs. Management believes that the expense ratio analysis enhances understanding of the productivity of the company. However, the expense ratio as defined by the company should not be viewed as a substitute for GAAP acquisition and operating expenses, net of deferrals, divided by total revenues.
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GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Reconciliation of Core Premiums
(amounts in millions)
2010 | 2009 | |||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||
Reported premiums |
$ | 1,470 | $ | 1,523 | $ | 1,492 | $ | 1,502 | $ | 1,502 | $ | 6,019 | ||||||||||||
Less retirement incomespread-based premiums |
36 | 39 | 30 | 38 | 47 | 154 | ||||||||||||||||||
Less impact of changes in foreign exchange rates |
68 | 73 | (42 | ) | (92 | ) | (120 | ) | (181 | ) | ||||||||||||||
Core premiums |
$ | 1,366 | $ | 1,411 | $ | 1,504 | $ | 1,556 | $ | 1,575 | $ | 6,046 | ||||||||||||
Reported premium percentage change from prior year |
-2.1 | % | -5.8 | % | -14.0 | % | -12.1 | % | -12.5 | % | -11.2 | % | ||||||||||||
Core premium percentage change from prior year |
-13.3 | % | -12.6 | % | -2.2 | % | 1.2 | % | 6.1 | % | -2.1 | % |
Non-GAAP Definition for Core Premiums
The company references the non-GAAP financial measure entitled core premiums as a measure of premium growth. The company defines core premiums as earned premiums less premiums from the retirement incomespread-based business and the impact of changes in foreign exchange rates. The retirement incomespread-based premiums are excluded in this measure primarily because these are single premiums and are not an indication of future premiums. The impact of changes in foreign exchange rates are excluded in this measure to present periods on a comparable exchange rate. Management believes that analysis of core premiums enhances understanding of premium growth of the company. However, core premiums as defined by the company should not be viewed as a substitute for GAAP earned premiums.
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GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Reconciliation of Core Yield
2010 | 2009 | |||||||||||||||||||||||||
(Assetsamounts in billions) | 1Q | 4Q | 3Q | 2Q | 1Q | Total | ||||||||||||||||||||
ReportedTotal Invested Assets and Cash |
$69.3 | $68.5 | $69.1 | $65.2 | $64.5 | $68.5 | ||||||||||||||||||||
Subtract: | ||||||||||||||||||||||||||
Securities lending |
0.6 | 0.9 | 0.9 | 1.0 | 1.1 | 0.9 | ||||||||||||||||||||
Unrealized gains (losses) |
(0.9 | ) | (1.3 | ) | (2.0 | ) | (4.4 | ) | (7.0 | ) | (1.3 | ) | ||||||||||||||
Derivative counterparty collateral |
0.6 | 0.6 | 0.9 | 0.8 | 1.2 | 0.6 | ||||||||||||||||||||
Adjusted end of period invested assets | $ | 69.0 | $ | 68.3 | $ | 69.3 | $ | 67.8 | $ | 69.2 | $ | 68.3 | ||||||||||||||
(A) |
Average Invested Assets Used in Reported Yield Calculation | $ | 68.9 | $ | 68.8 | $ | 68.6 | $ | 68.5 | $ | 70.2 | $ | 69.1 | |||||||||||||
Subtract: | ||||||||||||||||||||||||||
Restricted commercial mortgage loans and other invested assets related to securitization entities(1) |
0.6 | | | | | | ||||||||||||||||||||
(B) |
Average Invested Assets Used in Core Yield Calculation | 68.3 | 68.8 | 68.6 | 68.5 | 70.2 | 69.1 | |||||||||||||||||||
Subtract: | ||||||||||||||||||||||||||
Portfolios supporting floating products and non-recourse funding obligations(2) |
9.3 | 9.7 | 10.2 | 10.7 | 11.6 | 10.6 | ||||||||||||||||||||
(C) |
Average Invested Assets Used in Core Yield (excl. Floating and Non-Recourse Funding) Calculation | $ | 59.0 | $ | 59.1 | $ | 58.4 | $ | 57.8 | $ | 58.6 | $ | 58.5 | |||||||||||||
(Incomeamounts in millions) | ||||||||||||||||||||||||||
(D) |
ReportedNet Investment Income | $ | 765 | $ | 782 | $ | 759 | $ | 781 | $ | 711 | $ | 3,033 | |||||||||||||
Subtract: | ||||||||||||||||||||||||||
Bond calls and commercial mortgage loan prepayments |
7 | 3 | 8 | 4 | 11 | 26 | ||||||||||||||||||||
Reinsurance(3) |
29 | 15 | 22 | 26 | 8 | 71 | ||||||||||||||||||||
Other non-core items(4) |
| 14 | (5 | ) | 1 | 4 | 14 | |||||||||||||||||||
Restricted commercial mortgage loans and other invested assets related to securitization entities(1) |
8 | | | | | | ||||||||||||||||||||
(E) |
Core Net Investment Income | 721 | 750 | 734 | 750 | 688 | 2,922 | |||||||||||||||||||
Subtract: | ||||||||||||||||||||||||||
Investment income from portfolios supporting floating products and non-recourse funding obligations(2) |
2 | 16 | 22 | 29 | 23 | 90 | ||||||||||||||||||||
(F) |
Core Net Investment Income (excl. Floating and Non-Recourse Funding) | $ | 719 | $ | 734 | $ | 712 | $ | 721 | $ | 665 | $ | 2,832 | |||||||||||||
(D)/(A) |
Reported Yield | 4.44 | % | 4.55 | % | 4.43 | % | 4.56 | % | 4.05 | % | 4.39 | % | |||||||||||||
(E)/(B) |
Core Yield | 4.22 | % | 4.36 | % | 4.28 | % | 4.38 | % | 3.92 | % | 4.23 | % | |||||||||||||
(F)/(C) |
Core Yield (excl. Floating and Non-Recourse Funding) | 4.87 | % | 4.97 | % | 4.88 | % | 4.99 | % | 4.54 | % | 4.84 | % |
Notes: |
Columnsmay not add due to rounding. | |
Yieldshave been annualized. |
Non-GAAP Definition for Core Yield
The company references the non-GAAP financial measure entitled core yield as a measure of investment yield. The company defines core yield as the investment yield adjusted for those items that are not recurring in nature. Management believes that analysis of core yield enhances understanding of the investment yield of the company. However, core yield as defined by the company should not be viewed as a substitute for GAAP investment yield.
(1) | Represents the incremental assets and investment income related to restricted commercial mortgage loans and other invested assets required to be consolidated under a new accounting standard effective January 1, 2010. |
(2) | Floating products refer to institutional products and the non-recourse funding obligations support certain term and universal life insurance reserves in the companys life insurance business. |
(3) | Represents imputed investment income related to a reinsurance agreement in the lifestyle protection insurance business. Includes a $17 million reclassification adjustment in the second quarter of 2009 to interest expense related to the reinsurance arrangements accounted for under the deposit method as these arrangements were in a loss position. |
(4) | Includes mark-to-mark adjustment on assets supporting executive deferred compensation and various other immaterial items. |
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Corporate Information
68
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Industry Ratings
The companys principal life insurance subsidiaries are rated by Standard & Poors Financial Services LLC (S&P), Moodys Investors Service, Inc. (Moodys), A.M. Best Company, Inc. (A.M. Best) and Fitch Ratings (Fitch) as follows:
Company |
S&P |
Moodys |
A.M. Best |
Fitch | ||||
Genworth Life Insurance Company |
A | A2 | A | A- | ||||
Genworth Life Insurance Company (short-term rating) |
A-1 | P-1 | Not rated | Not rated | ||||
Genworth Life and Annuity Insurance Company |
A | A2 | A | A- | ||||
Genworth Life and Annuity Insurance Company (short-term rating) |
A -1 | P-1 | Not rated | Not rated | ||||
Genworth Life Insurance Company of New York |
A | A2 | A | A- | ||||
Continental Life Insurance Company of Brentwood, Tennessee |
Not rated | Not rated | A- | A- | ||||
American Continental Insurance Company |
Not rated | Not rated | A- | Not rated | ||||
The companys principal mortgage insurance subsidiaries are rated by S&P and Moodys as follows: | ||||||||
Company |
S&P |
Moodys |
||||||
Genworth Mortgage Insurance Corporation |
BBB- | Baa2 |
||||||
Genworth Financial Mortgage Insurance Pty. Limited (Australia) |
AA- | A1 |
||||||
Genworth Financial Mortgage Insurance Limited (Europe) |
BBB | Baa3 |
||||||
Genworth Residential Mortgage Insurance Corporation of NC |
BBB- | Baa2 |
||||||
Genworth Financial Mortgage Insurance Company Canada(1) |
AA- | Not rated |
||||||
Genworth Seguros de Credito a la Vivienda S.A. de C.V. |
mxAA | Aa3.mx |
||||||
The companys principal lifestyle protection insurance subsidiaries are rated by S&P as follows: | ||||||||
Company |
S&P |
|||||||
Financial Assurance Company Limited |
A- | |||||||
Financial Insurance Company Limited |
A- |
(1) | Genworth Financial Mortgage Insurance Company Canada is also rated AA by Dominion Bond Rating Service (DBRS). |
The S&P, Moodys, A.M. Best 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 the companys securities.
69
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2010
Industry Ratings (continued)
S&P states that an insurer rated AA (Very Strong) has very strong financial security characteristics that outweigh any vulnerabilities, and is highly likely to have the ability to meet financial commitments. An insurer rated A (Strong) has strong financial security characteristics and an insurer rated BBB (Good) has good financial security characteristics. The AA, A and BBB ranges are the second-, third- and fourth-highest of nine financial strength rating ranges assigned by S&P, which range from AAA to R. A plus (+) or minus (-) shows relative standing in a rating category. These suffixes are not added to ratings in the AAA category or to ratings below the CCC category. Accordingly, the AA-, A, A-, BBB and BBB- ratings are the fourth-, sixth-, seventh-, ninth- and tenth-highest of S&Ps 21 ratings categories. The short-term A-1 rating is the highest rating and shows the capacity to meet financial commitments is strong. An obligor rated mxAA has a very strong capacity to meet its financial commitments relative to that of other Mexican obligors. The mxAA rating is the second-highest enterprise credit rating assigned on S&Ps CaVal national scale.
Moodys states that insurance companies rated A (Good) offer good financial security and those rated Baa (Adequate) offer adequate financial security. The A (Good) and Baa (Adequate) ranges are the third- and fourth-highest, respectively, of nine financial strength rating ranges assigned by Moodys, which range from Aaa to C. Numeric modifiers are used to refer to the ranking within the groups, with 1 being the highest and 3 being the lowest. These modifiers are not added to ratings in the Aaa category or to ratings below the Caa category. Accordingly, the A1, A2, Baa2 and Baa3 ratings are the fifth-, sixth-, ninth-and tenth-highest, respectively, of Moodys 21 ratings categories. Short-term rating P-1 is the highest rating and shows superior ability for repayment of short-term debt obligations. Issuers or issues rated Aa.mx demonstrate very strong creditworthiness relative to other issuers in Mexico.
A.M. Best states that its A (Excellent) and A- (Excellent) ratings are assigned to companies that have, in its opinion, an excellent ability to meet their ongoing insurance obligations. The A (Excellent) and A- (Excellent) ratings are the third- and fourth-highest of fifteen ratings assigned by A.M. Best, which range from A++ to F.
Fitch states that A (Strong) rated insurance companies are viewed as possessing strong capacity to meet policyholder and contract obligations. The A rating category is the third-highest of eight financial strength rating categories, which range from AAA to C. 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 A- rating is the seventh-highest of Fitchs 21 ratings categories.
DBRS states that long-term obligations rated AA are of superior credit quality. Given the 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.
S&P, Moodys, A.M. Best, Fitch and DBRS review their ratings periodically and the company cannot assure you that it will maintain the current ratings in the future. Other agencies may also rate the company or its insurance subsidiaries on a solicited or an unsolicited basis.
About Genworth Financial
Genworth is a leading financial security company meeting the retirement, longevity and lifestyle protection, investment and mortgage insurance needs of more than 15 million customers, with a presence in more than 25 countries. For more information, visit www.genworth.com.
Inquiries:
Alicia Charity, 804-662-2248
Alicia.Charity@genworth.com
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