Exhibit 99.2
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Table of Contents |
Page | |||
3 | ||||
4 | ||||
Results of Operations and Selected Operating Performance Measures |
5 | |||
6 | ||||
Consolidated Quarterly Results |
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8 | ||||
Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss) |
9 | |||
10-11 | ||||
12-13 | ||||
14 | ||||
Quarterly Results by Business |
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Adjusted Operating Income and SalesU.S. Mortgage Insurance Segment |
16-22 | |||
Adjusted Operating Income and SalesCanada Mortgage Insurance Segment |
24-27 | |||
Adjusted Operating Income and SalesAustralia Mortgage Insurance Segment |
29-32 | |||
Adjusted Operating Income (Loss)U.S. Life Insurance Segment |
34-37 | |||
39 | ||||
41 | ||||
Additional Financial Data |
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43 | ||||
44 | ||||
45 | ||||
46 | ||||
Reconciliations of Non-GAAP Measures |
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48 | ||||
49 | ||||
Corporate Information |
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51 |
Note:
Unless otherwise stated, all references in this financial supplement to net income (loss), net income (loss) per share, adjusted operating income (loss), adjusted operating income (loss) per share, book value and book value per 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, non-U.S. Generally Accepted Accounting Principles (U.S. GAAP) adjusted operating income (loss) available to Genworth Financial, Inc.s common stockholders, non-GAAP adjusted 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
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Dear Investor,
Thank you for your continued interest in Genworth Financial, Inc.
Regards,
Investor Relations
InvestorInfo@genworth.com
3
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
This financial supplement includes the non-GAAP financial measures entitled adjusted operating income (loss) and adjusted operating income (loss) per share. Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The chief operating decision maker evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The company defines adjusted operating income (loss) as income (loss) from continuing operations excluding the after-tax effects of income (loss) attributable to noncontrolling interests, net investment gains (losses), goodwill impairments, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, gains (losses) on insurance block transactions, restructuring costs and infrequent or unusual non-operating items. Gains (losses) on insurance block transactions are defined as gains (losses) on the early extinguishment of non-recourse funding obligations, early termination fees for other financing restructuring and/or resulting gains (losses) on reinsurance restructuring for certain blocks of business. The company excludes net investment gains (losses) and infrequent or unusual non-operating items because the company does not consider them to be related to the operating performance of the companys segments and Corporate and Other activities. A component of the companys net investment gains (losses) is the result of impairments, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to the companys discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Goodwill impairments, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, gains (losses) on insurance block transactions and restructuring costs are also excluded from adjusted operating income (loss) because, in the companys opinion, they are not indicative of overall operating trends. Infrequent or unusual non-operating items are also excluded from adjusted operating income (loss) if, in the companys opinion, they are not indicative of overall operating trends.
While some of these items may be significant components of net income (loss) available to Genworth Financial, Inc.s common stockholders in accordance with U.S. GAAP, the company believes that adjusted operating income (loss) and measures that are derived from or incorporate adjusted operating income (loss), including adjusted operating income (loss) per share on a basic and diluted basis, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses adjusted operating income (loss) as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. However, the items excluded from adjusted operating income (loss) have occurred in the past and could, and in some cases will, recur in the future. Adjusted operating income (loss) and adjusted operating income (loss) per share on a basic and diluted basis are not substitutes for net income (loss) available to Genworth Financial, Inc.s common stockholders or net income (loss) available to Genworth Financial, Inc.s common stockholders per share on a basic and diluted basis determined in accordance with U.S. GAAP. In addition, the companys definition of adjusted operating income (loss) may differ from the definitions used by other companies.
In the first quarter of 2019, the company revised how it taxes the adjustments to reconcile net income (loss) available to Genworth Financial, Inc.s common stockholders to adjusted operating income (loss) to align the tax rate used in the reconciliation to each segments local jurisdictional tax rate. Beginning in the first quarter of 2019, the company used a tax rate of 27% and 30% for its Canada and Australia Mortgage Insurance segments, respectively, to tax effect their adjustments. Its domestic segments remain at a 21% tax rate. In 2018, the company assumed a flat 21% tax rate on adjustments for all of its segments to reconcile net income (loss) available to Genworth Financial, Inc.s common stockholders and adjusted operating income (loss). These adjustments are also net of the portion attributable to noncontrolling interests and net investment gains (losses) are adjusted for DAC and other intangible amortization and certain benefit reserves (see page 46).
Prior year amounts have not been re-presented to reflect this revised presentation; however, the previous methodology would not have resulted in a materially different segment-level adjusted operating income (loss).
In the second quarter of 2019, the company recorded a pre-tax loss of $1 million, net of the portion attributable to noncontrolling interests, related to the early redemption of CAD$100 million of Genworth MI Canada Inc.s senior notes originally scheduled to mature in June 2020. The company recorded a pre-tax expense of $4 million in the first quarter of 2019 and $2 million in the third quarter of 2018 related to restructuring costs as it continues to evaluate and appropriately size its organizational needs and expenses. There were no infrequent or unusual items excluded from adjusted operating income (loss) during the periods presented other than fees incurred during the fourth quarter of 2018 related to Genworth Holdings, Inc.s bond consent solicitation of $6 million for broker, advisor and investment banking fees.
The table on page 9 of this financial supplement provides a reconciliation of net income (loss) available to Genworth Financial, Inc.s common stockholders to adjusted operating income (loss) for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting. This 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 48 and 49 of this financial supplement.
4
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Results of Operations and Selected Operating Performance Measures
The companys chief operating decision maker evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The table on page 9 of this financial supplement provides a reconciliation of net income (loss) available to Genworth Financial, Inc.s common stockholders to adjusted operating income (loss) for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting.
The company taxes its international businesses at their local jurisdictional tax rates and its domestic businesses at the U.S. corporate federal income tax rate of 21%. The companys segment tax methodology applies the respective jurisdictional or domestic tax rate to the pre-tax income (loss) of each segment, which is then adjusted in each segment to reflect the tax attributes of items unique to that segment such as foreign withholding taxes and permanent differences between U.S. GAAP and local tax law. The difference between the consolidated provision for income taxes and the sum of the provision for income taxes in each segment is reflected in Corporate and Other activities.
The annually-determined tax rates and adjustments to each segments provision for income taxes are estimates which are subject to review and could change from year to year.
This financial supplement contains selected operating performance measures including sales and insurance in-force or risk in-force which are commonly used in the insurance industry as measures of operating performance.
Management regularly monitors and reports sales metrics as a measure of volume of new business generated in a period. Sales refer to new insurance written for mortgage insurance. Sales do not include renewal premiums on policies or contracts written during prior periods. The company considers new insurance written to be a measure of the companys operating performance because it represents a measure of new sales of insurance policies during a specified period, rather than a measure of the companys revenues or profitability during that period.
Management regularly monitors and reports insurance in-force and risk in-force. Insurance in-force for the companys mortgage insurance businesses is a measure of the aggregate original loan balance for outstanding insurance policies as of the respective reporting date. Risk in-force for the companys U.S. mortgage insurance business is based on the coverage percentage applied to the estimated current outstanding loan balance. For risk in-force in the mortgage insurance businesses in Canada and Australia, 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 of 35% that represents the highest expected average per-claim payment for any one underwriting year over the life of the companys mortgage insurance businesses in Canada and Australia. In Australia, the company has certain risk share arrangements where it provides pro-rata coverage of certain loans rather than 100% coverage. As a result, for loans with these risk share arrangements, the applicable pro-rata coverage amount provided is used when applying the factor. The company considers insurance in-force and risk in-force to be measures of its operating performance because they represent measures of the size of its business at a specific date which will generate revenues and profits in a future period, rather than measures of its revenues or profitability during that period.
Management also regularly monitors and reports a loss ratio for the companys businesses. For the mortgage insurance businesses, the loss ratio is the ratio of benefits and other changes in policy reserves to net earned premiums. For the long-term care insurance business, the loss ratio is the ratio of benefits and other changes in reserves less tabular interest on reserves less loss adjustment expenses to net earned premiums. The company considers the loss ratio to be a measure of underwriting performance in these businesses and helps to enhance the understanding of the operating performance of the businesses.
These operating performance measures enable the company to compare its operating performance across periods without regard to revenues or profitability related to policies or contracts sold in prior periods or from investments or other sources.
5
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
(amounts in millions, except per share data)
Balance Sheet Data |
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
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Total Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income |
$ | 10,744 | $ | 10,582 | $ | 10,406 | $ | 10,731 | $ | 10,583 | ||||||||||
Total accumulated other comprehensive income |
3,013 | 2,492 | 2,044 | 2,067 | 2,327 | |||||||||||||||
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Total Genworth Financial, Inc.s stockholders equity |
$ | 13,757 | $ | 13,074 | $ | 12,450 | $ | 12,798 | $ | 12,910 | ||||||||||
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Book value per share |
$ | 27.32 | $ | 25.98 | $ | 24.86 | $ | 25.56 | $ | 25.78 | ||||||||||
Book value per share, excluding accumulated other comprehensive income |
$ | 21.34 | $ | 21.03 | $ | 20.78 | $ | 21.43 | $ | 21.14 | ||||||||||
Common shares outstanding as of the balance sheet date |
503.5 | 503.3 | 500.8 | 500.8 | 500.7 | |||||||||||||||
Twelve months ended | ||||||||||||||||||||
Twelve Month Rolling Average ROE |
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
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U.S. GAAP Basis ROE |
1.5 | % | 1.7 | % | 1.1 | % | 7.7 | % | 7.4 | % | ||||||||||
Operating ROE(1) |
1.7 | % | 1.7 | % | 1.7 | % | 7.6 | % | 7.1 | % | ||||||||||
Three months ended | ||||||||||||||||||||
Quarterly Average ROE |
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
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U.S. GAAP Basis ROE |
6.3 | % | 6.6 | % | (12.5 | )% | 5.5 | % | 7.2 | % | ||||||||||
Operating ROE(1) |
7.7 | % | 4.6 | % | (11.0 | )% | 5.4 | % | 7.6 | % |
Basic and Diluted Shares |
Three months ended June 30, 2019 |
Six months ended June 30, 2019 |
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Weighted-average common shares used in basic earnings per share calculations |
503.4 | 502.3 | ||||||
Potentially dilutive securities: |
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Stock options, restricted stock units and stock appreciation rights |
5.3 | 6.4 | ||||||
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Weighted-average common shares used in diluted earnings per share calculations |
508.7 | 508.7 | ||||||
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(1) | See page 48 herein for a reconciliation of U.S. GAAP Basis ROE to Operating ROE. |
6
Consolidated Quarterly Results
7
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Consolidated Net Income (Loss) by Quarter
(amounts in millions, except per share amounts)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
REVENUES: |
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Premiums |
$ | 1,126 | $ | 1,114 | $ | 2,240 | $ | 1,121 | $ | 1,122 | $ | 1,136 | $ | 1,140 | $ | 4,519 | ||||||||||||||||
Net investment income |
852 | 829 | 1,681 | 815 | 815 | 828 | 804 | 3,262 | ||||||||||||||||||||||||
Net investment gains (losses) |
(45 | ) | 74 | 29 | (114 | ) | 13 | (14 | ) | (31 | ) | (146 | ) | |||||||||||||||||||
Policy fees and other income |
223 | 187 | 410 | 191 | 193 | 209 | 202 | 795 | ||||||||||||||||||||||||
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Total revenues |
2,156 | 2,204 | 4,360 | 2,013 | 2,143 | 2,159 | 2,115 | 8,430 | ||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
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Benefits and other changes in policy reserves |
1,270 | 1,301 | 2,571 | 1,847 | 1,321 | 1,205 | 1,311 | 5,684 | ||||||||||||||||||||||||
Interest credited |
146 | 147 | 293 | 152 | 151 | 152 | 156 | 611 | ||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
247 | 251 | 498 | 261 | 243 | 253 | 240 | 997 | ||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
95 | 91 | 186 | 92 | 83 | 112 | 104 | 391 | ||||||||||||||||||||||||
Interest expense |
73 | 72 | 145 | 74 | 72 | 77 | 76 | 299 | ||||||||||||||||||||||||
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Total benefits and expenses |
1,831 | 1,862 | 3,693 | 2,426 | 1,870 | 1,799 | 1,887 | 7,982 | ||||||||||||||||||||||||
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INCOME (LOSS) BEFORE INCOME TAXES |
325 | 342 | 667 | (413 | ) | 273 | 360 | 228 | 448 | |||||||||||||||||||||||
Provision (benefit) for income taxes |
107 | 112 | 219 | (86 | ) | 63 | 111 | 63 | 151 | |||||||||||||||||||||||
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NET INCOME (LOSS) |
218 | 230 | 448 | (327 | ) | 210 | 249 | 165 | 297 | |||||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
50 | 56 | 106 | 2 | 64 | 59 | 53 | 178 | ||||||||||||||||||||||||
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NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
$ | 168 | $ | 174 | $ | 342 | $ | (329 | ) | $ | 146 | $ | 190 | $ | 112 | $ | 119 | |||||||||||||||
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Earnings (Loss) Per Share Data: |
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Net income (loss) available to Genworth Financial, Inc.s common stockholders per share |
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Basic |
$ | 0.33 | $ | 0.35 | $ | 0.68 | $ | (0.66 | ) | $ | 0.29 | $ | 0.38 | $ | 0.22 | $ | 0.24 | |||||||||||||||
Diluted |
$ | 0.33 | $ | 0.34 | $ | 0.67 | $ | (0.66 | ) | $ | 0.29 | $ | 0.38 | $ | 0.22 | $ | 0.24 | |||||||||||||||
Weighted-average common shares outstanding |
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Basic |
503.4 | 501.2 | 502.3 | 500.8 | 500.7 | 500.6 | 499.6 | 500.4 | ||||||||||||||||||||||||
Diluted(1) |
508.7 | 508.6 | 508.7 | 500.8 | 503.3 | 502.6 | 502.7 | 504.2 |
(1) | Under applicable accounting guidance, companies in a loss position are required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of the net loss for the three months ended December 31, 2018, the company was required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share for the three months ended December 31, 2018, as the inclusion of shares for stock options, restricted stock units and stock appreciation rights of 7.6 million would have been antidilutive to the calculation. If the company had not incurred a net loss for the three months ended December 31, 2018, dilutive potential weighted-average common shares outstanding would have been 508.4 million. |
8
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss)
(amounts in millions, except per share amounts)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
NET INCOME (LOSS) |
$ | 218 | $ | 230 | $ | 448 | $ | (327 | ) | $ | 210 | $ | 249 | $ | 165 | $ | 297 | |||||||||||||||
Less: net income attributable to noncontrolling interests |
50 | 56 | 106 | 2 | 64 | 59 | 53 | 178 | ||||||||||||||||||||||||
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NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
168 | 174 | 342 | (329 | ) | 146 | 190 | 112 | 119 | |||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
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Net investment (gains) losses, net(1) |
43 | (71 | ) | (28 | ) | 42 | (3 | ) | 12 | 17 | 68 | |||||||||||||||||||||
(Gains) losses on early extinguishment of debt, net(2) |
1 | | 1 | | | | | | ||||||||||||||||||||||||
Expenses related to restructuring |
| 4 | 4 | | 2 | | | 2 | ||||||||||||||||||||||||
Fees associated with bond consent solicitation |
| | | 6 | | | | 6 | ||||||||||||||||||||||||
Taxes on adjustments |
(8 | ) | 14 | 6 | (10 | ) | | (2 | ) | (4 | ) | (16 | ) | |||||||||||||||||||
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ADJUSTED OPERATING INCOME (LOSS) |
$ | 204 | $ | 121 | $ | 325 | $ | (291 | ) | $ | 145 | $ | 200 | $ | 125 | $ | 179 | |||||||||||||||
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ADJUSTED OPERATING INCOME (LOSS): |
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U.S. Mortgage Insurance segment |
$ | 147 | $ | 124 | $ | 271 | $ | 124 | $ | 118 | $ | 137 | $ | 111 | $ | 490 | ||||||||||||||||
Canada Mortgage Insurance segment |
41 | 41 | 82 | 48 | 44 | 46 | 49 | 187 | ||||||||||||||||||||||||
Australia Mortgage Insurance segment |
13 | 14 | 27 | 18 | 17 | 22 | 19 | 76 | ||||||||||||||||||||||||
U.S. Life Insurance segment: |
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Long-Term Care Insurance |
37 | (20 | ) | 17 | (314 | ) | (24 | ) | 22 | (32 | ) | (348 | ) | |||||||||||||||||||
Life Insurance |
10 | (2 | ) | 8 | (108 | ) | (2 | ) | 4 | (1 | ) | (107 | ) | |||||||||||||||||||
Fixed Annuities |
19 | 17 | 36 | (3 | ) | 23 | 31 | 28 | 79 | |||||||||||||||||||||||
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Total U.S. Life Insurance segment |
66 | (5 | ) | 61 | (425 | ) | (3 | ) | 57 | (5 | ) | (376 | ) | |||||||||||||||||||
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Runoff segment |
9 | 20 | 29 | (2 | ) | 14 | 13 | 10 | 35 | |||||||||||||||||||||||
Corporate and Other |
(72 | ) | (73 | ) | (145 | ) | (54 | ) | (45 | ) | (75 | ) | (59 | ) | (233 | ) | ||||||||||||||||
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ADJUSTED OPERATING INCOME (LOSS) |
$ | 204 | $ | 121 | $ | 325 | $ | (291 | ) | $ | 145 | $ | 200 | $ | 125 | $ | 179 | |||||||||||||||
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Earnings (Loss) Per Share Data: |
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Net income (loss) available to Genworth Financial, Inc.s common stockholders per share |
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Basic |
$ | 0.33 | $ | 0.35 | $ | 0.68 | $ | (0.66 | ) | $ | 0.29 | $ | 0.38 | $ | 0.22 | $ | 0.24 | |||||||||||||||
Diluted |
$ | 0.33 | $ | 0.34 | $ | 0.67 | $ | (0.66 | ) | $ | 0.29 | $ | 0.38 | $ | 0.22 | $ | 0.24 | |||||||||||||||
Adjusted operating income (loss) per share |
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Basic |
$ | 0.40 | $ | 0.24 | $ | 0.65 | $ | (0.58 | ) | $ | 0.29 | $ | 0.40 | $ | 0.25 | $ | 0.36 | |||||||||||||||
Diluted |
$ | 0.40 | $ | 0.24 | $ | 0.64 | $ | (0.58 | ) | $ | 0.29 | $ | 0.40 | $ | 0.25 | $ | 0.36 | |||||||||||||||
Weighted-average common shares outstanding |
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Basic |
503.4 | 501.2 | 502.3 | 500.8 | 500.7 | 500.6 | 499.6 | 500.4 | ||||||||||||||||||||||||
Diluted(3) |
508.7 | 508.6 | 508.7 | 500.8 | 503.3 | 502.6 | 502.7 | 504.2 |
(1) | Net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests and DAC and other intangible amortization and certain benefit reserves (see page 46 for reconciliation). |
(2) | For the three months ended June 30, 2019, (gains) losses on the early extinguishment of debt were adjusted for the portion attributable to noncontrolling interests of $1 million. |
(3) | Under applicable accounting guidance, companies in a loss position are required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of the net loss for the three months ended December 31, 2018, the company was required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share for the three months ended December 31, 2018, as the inclusion of shares for stock options, restricted stock units and stock appreciation rights of 7.6 million would have been antidilutive to the calculation. If the company had not incurred a net loss for the three months ended December 31, 2018, dilutive potential weighted-average common shares outstanding would have been 508.4 million. |
9
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Consolidated Balance Sheets
(amounts in millions)
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
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ASSETS | ||||||||||||||||||||
Investments: |
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Fixed maturity securities available-for-sale, at fair value |
$ | 63,774 | $ | 61,360 | $ | 59,661 | $ | 59,404 | $ | 60,032 | ||||||||||
Equity securities, at fair value |
644 | 635 | 655 | 783 | 758 | |||||||||||||||
Commercial mortgage loans(1) |
7,019 | 6,988 | 6,749 | 6,655 | 6,570 | |||||||||||||||
Policy loans |
2,076 | 1,994 | 1,861 | 1,859 | 1,872 | |||||||||||||||
Other invested assets |
1,535 | 1,208 | 1,188 | 1,354 | 1,650 | |||||||||||||||
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|
|
|||||||||||
Total investments |
75,048 | 72,185 | 70,114 | 70,055 | 70,882 | |||||||||||||||
Cash, cash equivalents and restricted cash |
1,938 | 2,221 | 2,177 | 2,505 | 2,243 | |||||||||||||||
Accrued investment income |
626 | 726 | 675 | 657 | 602 | |||||||||||||||
Deferred acquisition costs |
2,105 | 2,219 | 3,263 | 3,336 | 3,086 | |||||||||||||||
Intangible assets and goodwill |
244 | 265 | 347 | 355 | 354 | |||||||||||||||
Reinsurance recoverable |
17,211 | 17,257 | 17,278 | 17,351 | 17,385 | |||||||||||||||
Other assets |
564 | 532 | 474 | 467 | 574 | |||||||||||||||
Deferred tax asset |
383 | 573 | 736 | 650 | 601 | |||||||||||||||
Separate account assets |
6,187 | 6,210 | 5,859 | 6,745 | 6,750 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 104,306 | $ | 102,188 | $ | 100,923 | $ | 102,121 | $ | 102,477 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Included restricted commercial mortgage loans of $56 million, $59 million, $62 million, $87 million and $90 million, respectively, as of June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018 and June 30, 2018 related to a securitization entity. |
10
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Consolidated Balance Sheets
(amounts in millions)
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
||||||||||||||||
LIABILITIES AND EQUITY |
||||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Future policy benefits |
$ | 39,583 | $ | 38,369 | $ | 37,940 | $ | 38,018 | $ | 37,913 | ||||||||||
Policyholder account balances |
22,673 | 22,651 | 22,968 | 22,993 | 23,366 | |||||||||||||||
Liability for policy and contract claims |
10,677 | 10,536 | 10,379 | 9,844 | 9,665 | |||||||||||||||
Unearned premiums |
3,488 | 3,482 | 3,546 | 3,668 | 3,669 | |||||||||||||||
Other liabilities |
1,723 | 1,682 | 1,682 | 1,830 | 1,965 | |||||||||||||||
Borrowings related to a securitization entity |
| | | 20 | 28 | |||||||||||||||
Non-recourse funding obligations |
311 | 311 | 311 | 310 | 310 | |||||||||||||||
Long-term borrowings |
4,044 | 4,035 | 4,025 | 4,051 | 4,047 | |||||||||||||||
Deferred tax liability |
28 | 30 | 24 | 21 | 23 | |||||||||||||||
Separate account liabilities |
6,187 | 6,210 | 5,859 | 6,745 | 6,750 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
88,714 | 87,306 | 86,734 | 87,500 | 87,736 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity: |
||||||||||||||||||||
Common stock |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Additional paid-in capital |
11,983 | 11,989 | 11,987 | 11,983 | 11,981 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Accumulated other comprehensive income (loss): |
||||||||||||||||||||
Net unrealized investment gains (losses): |
||||||||||||||||||||
Net unrealized gains (losses) on securities not other-than-temporarily impaired |
1,294 | 932 | 585 | 598 | 726 | |||||||||||||||
Net unrealized gains (losses) on other-than-temporarily impaired securities |
11 | 11 | 10 | 10 | 10 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net unrealized investment gains (losses) |
1,305 | 943 | 595 | 608 | 736 | |||||||||||||||
Derivatives qualifying as hedges |
1,983 | 1,850 | 1,781 | 1,717 | 1,863 | |||||||||||||||
Foreign currency translation and other adjustments |
(275 | ) | (301 | ) | (332 | ) | (258 | ) | (272 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total accumulated other comprehensive income |
3,013 | 2,492 | 2,044 | 2,067 | 2,327 | |||||||||||||||
Retained earnings |
1,460 | 1,292 | 1,118 | 1,447 | 1,301 | |||||||||||||||
Treasury stock, at cost |
(2,700 | ) | (2,700 | ) | (2,700 | ) | (2,700 | ) | (2,700 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Genworth Financial, Inc.s stockholders equity |
13,757 | 13,074 | 12,450 | 12,798 | 12,910 | |||||||||||||||
Noncontrolling interests |
1,835 | 1,808 | 1,739 | 1,823 | 1,831 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total equity |
15,592 | 14,882 | 14,189 | 14,621 | 14,741 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and equity |
$ | 104,306 | $ | 102,188 | $ | 100,923 | $ | 102,121 | $ | 102,477 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
11
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Consolidated Balance Sheet by Segment
(amounts in millions)
June 30, 2019 | ||||||||||||||||||||||||||||
U.S. Mortgage Insurance |
Canada Mortgage Insurance |
Australia Mortgage Insurance |
U.S. Life Insurance |
Runoff | Corporate and Other(1) |
Total | ||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||
Cash and investments |
$ | 3,846 | $ | 5,060 | $ | 2,303 | $ | 62,499 | $ | 2,896 | $ | 1,008 | $ | 77,612 | ||||||||||||||
Deferred acquisition costs and intangible assets |
50 | 140 | 65 | 1,911 | 173 | 10 | 2,349 | |||||||||||||||||||||
Reinsurance recoverable |
| | 2 | 16,474 | 735 | | 17,211 | |||||||||||||||||||||
Deferred tax and other assets |
81 | 72 | 154 | 118 | 27 | 495 | 947 | |||||||||||||||||||||
Separate account assets |
| | | | 6,187 | | 6,187 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total assets |
$ | 3,977 | $ | 5,272 | $ | 2,524 | $ | 81,002 | $ | 10,018 | $ | 1,513 | $ | 104,306 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
LIABILITIES AND EQUITY |
||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||
Future policy benefits |
$ | | $ | | $ | | $ | 39,581 | $ | 2 | $ | | $ | 39,583 | ||||||||||||||
Policyholder account balances |
| | | 19,434 | 3,239 | | 22,673 | |||||||||||||||||||||
Liability for policy and contract claims |
254 | 91 | 209 | 10,102 | 13 | 8 | 10,677 | |||||||||||||||||||||
Unearned premiums |
419 | 1,571 | 997 | 497 | 4 | | 3,488 | |||||||||||||||||||||
Non-recourse funding obligations |
| | | 311 | | | 311 | |||||||||||||||||||||
Deferred tax and other liabilities |
79 | 183 | 185 | 560 | 52 | 692 | 1,751 | |||||||||||||||||||||
Borrowings and capital securities |
| 333 | 140 | | | 3,571 | 4,044 | |||||||||||||||||||||
Separate account liabilities |
| | | | 6,187 | | 6,187 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities |
752 | 2,178 | 1,531 | 70,485 | 9,497 | 4,271 | 88,714 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Equity: |
||||||||||||||||||||||||||||
Allocated equity, excluding accumulated other comprehensive income (loss) |
3,148 | 1,947 | 453 | 7,419 | 515 | (2,738 | ) | 10,744 | ||||||||||||||||||||
Allocated accumulated other comprehensive income (loss) |
77 | (188 | ) | 40 | 3,098 | 6 | (20 | ) | 3,013 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Genworth Financial, Inc.s stockholders equity |
3,225 | 1,759 | 493 | 10,517 | 521 | (2,758 | ) | 13,757 | ||||||||||||||||||||
Noncontrolling interests |
| 1,335 | 500 | | | | 1,835 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total equity |
3,225 | 3,094 | 993 | 10,517 | 521 | (2,758 | ) | 15,592 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and equity |
$ | 3,977 | $ | 5,272 | $ | 2,524 | $ | 81,002 | $ | 10,018 | $ | 1,513 | $ | 104,306 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes inter-segment eliminations and other businesses that are managed outside the operating segments. |
12
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Consolidated Balance Sheet by Segment
(amounts in millions)
March 31, 2019 | ||||||||||||||||||||||||||||
U.S. Mortgage Insurance |
Canada Mortgage Insurance |
Australia Mortgage Insurance |
U.S. Life Insurance |
Runoff | Corporate and Other(1) |
Total | ||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||
Cash and investments |
$ | 3,652 | $ | 4,935 | $ | 2,300 | $ | 61,882 | $ | 2,918 | $ | (555 | ) | $ | 75,132 | |||||||||||||
Deferred acquisition costs and intangible assets |
50 | 137 | 69 | 2,029 | 189 | 10 | 2,484 | |||||||||||||||||||||
Reinsurance recoverable |
| | 4 | 16,513 | 740 | | 17,257 | |||||||||||||||||||||
Deferred tax and other assets |
106 | 74 | 160 | 195 | 25 | 545 | 1,105 | |||||||||||||||||||||
Separate account assets |
| | | | 6,210 | | 6,210 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total assets |
$ | 3,808 | $ | 5,146 | $ | 2,533 | $ | 80,619 | $ | 10,082 | $ | | $ | 102,188 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
LIABILITIES AND EQUITY |
||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||
Future policy benefits |
$ | | $ | | $ | | $ | 38,367 | $ | 2 | $ | | $ | 38,369 | ||||||||||||||
Policyholder account balances |
| | | 19,442 | 3,209 | | 22,651 | |||||||||||||||||||||
Liability for policy and contract claims |
280 | 88 | 204 | 9,946 | 10 | 8 | 10,536 | |||||||||||||||||||||
Unearned premiums |
421 | 1,518 | 1,031 | 508 | 4 | | 3,482 | |||||||||||||||||||||
Non-recourse funding obligations |
| | | 311 | | | 311 | |||||||||||||||||||||
Deferred tax and other liabilities |
104 | 169 | 177 | 618 | 48 | 596 | 1,712 | |||||||||||||||||||||
Borrowings and capital securities |
| 324 | 141 | | | 3,570 | 4,035 | |||||||||||||||||||||
Separate account liabilities |
| | | | 6,210 | | 6,210 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities |
805 | 2,099 | 1,553 | 69,192 | 9,483 | 4,174 | 87,306 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Equity: |
||||||||||||||||||||||||||||
Allocated equity, excluding accumulated other comprehensive income (loss) |
2,973 | 1,960 | 450 | 8,726 | 598 | (4,125 | ) | 10,582 | ||||||||||||||||||||
Allocated accumulated other comprehensive income (loss) |
30 | (229 | ) | 38 | 2,701 | 1 | (49 | ) | 2,492 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Genworth Financial, Inc.s stockholders equity |
3,003 | 1,731 | 488 | 11,427 | 599 | (4,174 | ) | 13,074 | ||||||||||||||||||||
Noncontrolling interests |
| 1,316 | 492 | | | | 1,808 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total equity |
3,003 | 3,047 | 980 | 11,427 | 599 | (4,174 | ) | 14,882 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and equity |
$ | 3,808 | $ | 5,146 | $ | 2,533 | $ | 80,619 | $ | 10,082 | $ | | $ | 102,188 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes inter-segment eliminations and other businesses that are managed outside the operating segments. |
13
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Deferred Acquisition Costs Rollforward
(amounts in millions)
U.S. Mortgage Insurance |
Canada Mortgage Insurance |
Australia Mortgage Insurance |
U.S. Life Insurance |
Runoff | Total | |||||||||||||||||||
Unamortized balance as of March 31, 2019 |
$ | 28 | $ | 122 | $ | 38 | $ | 3,320 | $ | 188 | $ | 3,696 | ||||||||||||
Costs deferred |
3 | 11 | 2 | 2 | | 18 | ||||||||||||||||||
Amortization, net of interest accretion |
(3 | ) | (10 | ) | (3 | ) | (62 | ) | (4 | ) | (82 | ) | ||||||||||||
Impact of foreign currency translation |
| 2 | | | | 2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unamortized balance as of June 30, 2019 |
28 | 125 | 37 | 3,260 | 184 | 3,634 | ||||||||||||||||||
Effect of accumulated net unrealized investment (gains) losses |
| | | (1,510 | ) | (19 | ) | (1,529 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of June 30, 2019 |
$ | 28 | $ | 125 | $ | 37 | $ | 1,750 | $ | 165 | $ | 2,105 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
14
U.S. Mortgage Insurance Segment
15
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Adjusted Operating Income and SalesU.S. Mortgage Insurance Segment
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||
Premiums |
$ | 206 | $ | 194 | $ | 400 | $ | 193 | $ | 190 | $ | 184 | $ | 179 | $ | 746 | ||||||||||||||||
Net investment income |
28 | 28 | 56 | 26 | 23 | 23 | 21 | 93 | ||||||||||||||||||||||||
Net investment gains (losses) |
| | | | | | | | ||||||||||||||||||||||||
Policy fees and other income |
1 | 1 | 2 | | 1 | 1 | | 2 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenues |
235 | 223 | 458 | 219 | 214 | 208 | 200 | 841 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
| 16 | 16 | 14 | 20 | (14 | ) | 16 | 15,800 | |||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
44 | 46 | 90 | 44 | 41 | 45 | 39 | 169 | ||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
4 | 4 | 8 | 3 | 4 | 3 | 4 | 14 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total benefits and expenses |
48 | 66 | 114 | 61 | 65 | 34 | 59 | 219 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
INCOME BEFORE INCOME TAXES |
187 | 157 | 344 | 158 | 149 | 174 | 141 | 622 | ||||||||||||||||||||||||
Provision for income taxes |
40 | 33 | 73 | 34 | 31 | 37 | 30 | 132 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
NET INCOME |
147 | 124 | 271 | 124 | 118 | 137 | 111 | 490 | ||||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME: |
||||||||||||||||||||||||||||||||
Net investment (gains) losses |
| | | | | | | | ||||||||||||||||||||||||
Taxes on adjustments |
| | | | | | | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
ADJUSTED OPERATING INCOME |
$ | 147 | $ | 124 | $ | 271 | $ | 124 | $ | 118 | $ | 137 | $ | 111 | $ | 490 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||
Flow New Insurance Written (NIW) |
$ | 15,800 | $ | 9,600 | $ | 25,400 | $ | 9,300 | $ | 10,300 | $ | 11,400 | $ | 9,000 | $ | 40,000 |
16
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Flow New Insurance Written MetricsU.S. Mortgage Insurance Segment
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||
2Q | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||||||||||||||||||||||||||||||
Flow NIW |
% of Flow NIW |
Flow NIW |
% of Flow NIW |
Flow NIW |
% of Flow NIW |
Flow NIW |
% of Flow NIW |
Flow NIW |
% of Flow NIW |
Flow NIW |
% of Flow NIW |
|||||||||||||||||||||||||||||||||||||
Product |
||||||||||||||||||||||||||||||||||||||||||||||||
Monthly(1) |
$ | 13,900 | 88 | % | $ | 8,400 | 87 | % | $ | 7,900 | 85 | % | $ | 8,400 | 82 | % | $ | 9,700 | 85 | % | $ | 7,300 | 81 | % | ||||||||||||||||||||||||
Single |
1,900 | 12 | 1,200 | 13 | 1,400 | 15 | 1,900 | 18 | 1,700 | 15 | 1,700 | 19 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Flow |
$ | 15,800 | 100 | % | $ | 9,600 | 100 | % | $ | 9,300 | 100 | % | $ | 10,300 | 100 | % | $ | 11,400 | 100 | % | $ | 9,000 | 100 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
FICO Scores |
||||||||||||||||||||||||||||||||||||||||||||||||
Over 735 |
$ | 9,200 | 58 | % | $ | 5,500 | 57 | % | $ | 5,200 | 56 | % | $ | 6,000 | 58 | % | $ | 6,900 | 60 | % | $ | 5,300 | 59 | % | ||||||||||||||||||||||||
680-735 |
5,500 | 35 | 3,300 | 35 | 3,200 | 35 | 3,300 | 32 | 3,700 | 32 | 3,000 | 33 | ||||||||||||||||||||||||||||||||||||
660-679(2) |
600 | 4 | 400 | 4 | 500 | 5 | 500 | 5 | 400 | 4 | 400 | 5 | ||||||||||||||||||||||||||||||||||||
620-659 |
500 | 3 | 400 | 4 | 400 | 4 | 500 | 5 | 400 | 4 | 300 | 3 | ||||||||||||||||||||||||||||||||||||
<620 |
| | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Flow |
$ | 15,800 | 100 | % | $ | 9,600 | 100 | % | $ | 9,300 | 100 | % | $ | 10,300 | 100 | % | $ | 11,400 | 100 | % | $ | 9,000 | 100 | % | ||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Loan-To-Value Ratio |
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95.01% and above |
$ | 2,900 | 18 | % | $ | 1,800 | 19 | % | $ | 2,000 | 21 | % | $ | 2,000 | 19 | % | $ | 2,400 | 21 | % | $ | 1,600 | 18 | % | ||||||||||||||||||||||||
90.01% to 95.00% |
6,900 | 44 | 4,200 | 44 | 4,000 | 43 | 4,500 | 44 | 4,900 | 43 | 3,900 | 43 | ||||||||||||||||||||||||||||||||||||
85.01% to 90.00% |
4,300 | 27 | 2,500 | 26 | 2,300 | 25 | 2,800 | 27 | 2,900 | 25 | 2,500 | 28 | ||||||||||||||||||||||||||||||||||||
85.00% and below |
1,700 | 11 | 1,100 | 11 | 1,000 | 11 | 1,000 | 10 | 1,200 | 11 | 1,000 | 11 | ||||||||||||||||||||||||||||||||||||
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Total Flow |
$ | 15,800 | 100 | % | $ | 9,600 | 100 | % | $ | 9,300 | 100 | % | $ | 10,300 | 100 | % | $ | 11,400 | 100 | % | $ | 9,000 | 100 | % | ||||||||||||||||||||||||
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Origination |
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Purchase |
$ | 13,900 | 88 | % | $ | 8,600 | 90 | % | $ | 8,800 | 95 | % | $ | 9,800 | 95 | % | $ | 10,700 | 94 | % | $ | 8,000 | 89 | % | ||||||||||||||||||||||||
Refinance |
1,900 | 12 | 1,000 | 10 | 500 | 5 | 500 | 5 | 700 | 6 | 1,000 | 11 | ||||||||||||||||||||||||||||||||||||
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Total Flow |
$ | 15,800 | 100 | % | $ | 9,600 | 100 | % | $ | 9,300 | 100 | % | $ | 10,300 | 100 | % | $ | 11,400 | 100 | % | $ | 9,000 | 100 | % | ||||||||||||||||||||||||
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(1) | Includes loans with annual and split payment types. |
(2) | Loans with unknown FICO scores are included in the 660-679 category. |
17
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Other MetricsU.S. Mortgage Insurance Segment
(dollar amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
Net Premiums Written |
$ | 204 | $ | 193 | $ | 397 | $ | 192 | $ | 195 | $ | 191 | $ | 185 | $ | 763 | ||||||||||||||||
Flow New Risk Written |
$ | 3,931 | $ | 2,403 | $ | 6,334 | $ | 2,300 | $ | 2,559 | $ | 2,866 | $ | 2,247 | $ | 9,972 | ||||||||||||||||
Primary Insurance In-Force(1) |
$ | 178,500 | $ | 170,400 | $ | 166,700 | $ | 163,200 | $ | 159,500 | $ | 154,900 | ||||||||||||||||||||
Risk In-Force |
||||||||||||||||||||||||||||||||
Flow(2) |
$ | 42,917 | $ | 41,020 | $ | 40,115 | $ | 39,304 | $ | 38,433 | $ | 37,252 | ||||||||||||||||||||
Bulk(3) |
167 | 173 | 178 | 188 | 195 | 202 | ||||||||||||||||||||||||||
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Total Primary |
43,084 | 41,193 | 40,293 | 39,492 | 38,628 | 37,454 | ||||||||||||||||||||||||||
Pool |
62 | 66 | 69 | 72 | 75 | 80 | ||||||||||||||||||||||||||
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Total Risk In-Force |
$ | 43,146 | $ | 41,259 | $ | 40,362 | $ | 39,564 | $ | 38,703 | $ | 37,534 | ||||||||||||||||||||
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Primary Risk In-Force That Is GSE Conforming |
93 | % | 93 | % | 94 | % | 94 | % | 94 | % | 94 | % | ||||||||||||||||||||
Expense Ratio (Net Earned Premiums)(4) |
24 | % | 25 | % | 25 | % | 24 | % | 23 | % | 26 | % | 24 | % | 25 | % | ||||||||||||||||
Expense Ratio (Net Premiums Written)(5) |
24 | % | 26 | % | 25 | % | 25 | % | 23 | % | 25 | % | 23 | % | 24 | % | ||||||||||||||||
Flow Persistency |
82 | % | 86 | % | 86 | % | 84 | % | 83 | % | 84 | % | ||||||||||||||||||||
Risk To Capital Ratio(6) |
11.8:1 | 11.9:1 | 12.2:1 | 12.3:1 | 12.6:1 | 12.5:1 | ||||||||||||||||||||||||||
PMIERs Sufficiency Ratio(7) |
123 | % | 123 | % | 129 | % | 130 | % | 129 | % | 124 | % | ||||||||||||||||||||
Average Primary Loan Size (in thousands) |
$ | 218 | $ | 215 | $ | 213 | $ | 211 | $ | 209 | $ | 207 |
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) | Primary insurance in-force represents aggregate loan balances for outstanding insurance policies and is used to determine premiums. Original loan balances are presented for policies with level renewal premiums. Amortized loan balances are presented for policies with annual, amortizing renewal premiums. |
(2) | Flow risk in-force represents current loan balances as provided by servicers, lenders and investors and conforms to the presentation under the Private Mortgage Insurer Eligibility Requirements (PMIERs). |
(3) | As of June 30, 2019, 88% of the bulk risk in-force was related to loans financed by lenders who participated in the mortgage programs sponsored by the Federal Home Loan Banks. |
(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) | 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 current period risk to capital ratio is an estimate due to the timing of the filing of statutory statements and is prepared consistent with the presentation of the statutory financial statements in the combined annual statement of the U.S. mortgage insurance business. |
(7) | The PMIERs sufficiency ratio is calculated as available assets divided by required assets as defined within PMIERs. The current period PMIERs sufficiency ratio is an estimate due to the timing of the PMIERs filing for the U.S. mortgage insurance business. As of June 30, 2019 and March 31, 2019, the PMIERs sufficiency ratios were in excess of $650 million and $600 million, respectively, of available assets above the PMIERs requirements. As of December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, the PMIERs sufficiency ratios were in excess of $750 million, $750 million, $700 million and $600 million, respectively, of available assets above the prior PMIERs requirements. |
18
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Loss MetricsU.S. Mortgage Insurance Segment
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
Paid claims |
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Flow |
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Direct |
$ | 24 | $ | 30 | $ | 54 | $ | 34 | $ | 52 | $ | 45 | $ | 53 | $ | 184 | ||||||||||||||||
Assumed(1) |
| | | | | | 1 | 1 | ||||||||||||||||||||||||
Ceded |
| | | | | | (1 | ) | (1 | ) | ||||||||||||||||||||||
Loss adjustment expenses |
2 | 2 | 4 | | 3 | 2 | 2 | 7 | ||||||||||||||||||||||||
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Total Flow |
26 | 32 | 58 | 34 | 55 | 47 | 55 | 191 | ||||||||||||||||||||||||
Bulk |
| | | | 1 | | 1 | 2 | ||||||||||||||||||||||||
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Total Primary |
26 | 32 | 58 | 34 | 56 | 47 | 56 | 193 | ||||||||||||||||||||||||
Pool |
| | | | | 1 | | 1 | ||||||||||||||||||||||||
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Total Paid Claims |
$ | 26 | $ | 32 | $ | 58 | $ | 34 | $ | 56 | $ | 48 | $ | 56 | $ | 194 | ||||||||||||||||
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Average Paid Claim (in thousands) |
$ | 45.4 | $ | 49.0 | $ | 41.4 | $ | 45.9 | $ | 43.1 | $ | 47.5 | ||||||||||||||||||||
Average Reserve Per Delinquency (in thousands) |
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Flow |
$ | 16.5 | $ | 17.4 | $ | 17.3 | $ | 18.8 | $ | 19.6 | $ | 20.2 | ||||||||||||||||||||
Bulk loans with established reserve |
$ | 14.1 | $ | 13.8 | $ | 14.6 | $ | 17.6 | $ | 18.4 | $ | 17.6 | ||||||||||||||||||||
Reserves: |
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Flow direct case |
$ | 222 | $ | 246 | $ | 261 | $ | 280 | $ | 314 | $ | 372 | ||||||||||||||||||||
Bulk direct case |
4 | 4 | 5 | 7 | 8 | 8 | ||||||||||||||||||||||||||
Assumed(1) |
1 | 1 | 2 | 2 | 2 | 2 | ||||||||||||||||||||||||||
All other(2) |
27 | 29 | 28 | 28 | 28 | 33 | ||||||||||||||||||||||||||
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Total Reserves |
$ | 254 | $ | 280 | $ | 296 | $ | 317 | $ | 352 | $ | 415 | ||||||||||||||||||||
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Beginning Reserves |
$ | 280 | $ | 296 | $ | 296 | $ | 317 | $ | 352 | $ | 415 | $ | 455 | $ | 455 | ||||||||||||||||
Paid claims |
(26 | ) | (32 | ) | (58 | ) | (34 | ) | (56 | ) | (48 | ) | (57 | ) | (195 | ) | ||||||||||||||||
Increase (decrease) in reserves |
| 16 | 16 | 13 | 21 | (15 | ) | 17 | 36 | |||||||||||||||||||||||
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Ending Reserves |
$ | 254 | $ | 280 | $ | 254 | $ | 296 | $ | 317 | $ | 352 | $ | 415 | $ | 296 | ||||||||||||||||
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Beginning Reinsurance Recoverable(3) |
$ | | $ | | $ | | $ | | $ | | $ | | $ | 1 | $ | 1 | ||||||||||||||||
Ceded paid claims |
| | | | | | (1 | ) | (1 | ) | ||||||||||||||||||||||
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Ending Reinsurance Recoverable |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
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Loss Ratio(4) |
| % | 8 | % | 4 | % | 7 | % | 11 | % | (8 | )% | 9 | % | 5 | % |
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) | Assumed is comprised of reinsurance arrangements with state governmental housing finance agencies. |
(2) | Other includes loss adjustment expenses, pool and incurred but not reported reserves. |
(3) | Reinsurance recoverable excludes ceded unearned premium recoveries and amounts for which cash proceeds have not yet been received. |
(4) | The ratio of benefits and other changes in policy reserves to net earned premiums. During the second quarter of 2019, the company recorded a favorable reserve adjustment of $10 million, which reduced the loss ratio by five percentage points for the three months ended June 30, 2019. During the second quarter of 2018, the company recorded a favorable reserve adjustment of $28 million, which reduced the loss ratio by four percentage points for the twelve months ended December 31, 2018 and 15 percentage points for the three months ended June 30, 2018. |
19
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Delinquency MetricsU.S. Mortgage Insurance Segment
(dollar amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
Number of Primary Delinquencies |
||||||||||||||||||||||||||||||||
Flow |
15,070 | 15,764 | 16,670 | 16,367 | 17,505 | 20,007 | ||||||||||||||||||||||||||
Bulk loans with an established reserve |
347 | 360 | 403 | 415 | 445 | 494 | ||||||||||||||||||||||||||
Bulk loans with no reserve(1) |
65 | 82 | 86 | 92 | 101 | 101 | ||||||||||||||||||||||||||
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Total Number of Primary Delinquencies |
15,482 | 16,206 | 17,159 | 16,874 | 18,051 | 20,602 | ||||||||||||||||||||||||||
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Beginning Number of Primary Delinquencies |
16,206 | 17,159 | 17,159 | 16,874 | 18,051 | 20,602 | 23,188 | 23,188 | ||||||||||||||||||||||||
New delinquencies |
7,705 | 8,539 | 16,244 | 8,719 | 7,884 | 7,049 | 8,409 | 32,061 | ||||||||||||||||||||||||
Delinquency cures |
(7,872 | ) | (8,835 | ) | (16,707 | ) | (7,601 | ) | (7,857 | ) | (8,488 | ) | (9,840 | ) | (33,786 | ) | ||||||||||||||||
Paid claims |
(557 | ) | (657 | ) | (1,214 | ) | (833 | ) | (1,204 | ) | (1,112 | ) | (1,155 | ) | (4,304 | ) | ||||||||||||||||
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Ending Number of Primary Delinquencies |
15,482 | 16,206 | 15,482 | 17,159 | 16,874 | 18,051 | 20,602 | 17,159 | ||||||||||||||||||||||||
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Composition of Cures |
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Reported delinquent and cured-intraquarter |
1,621 | 2,342 | 1,767 | 1,651 | 1,514 | 2,288 | ||||||||||||||||||||||||||
Number of missed payments delinquent prior to cure: |
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3 payments or less |
4,567 | 4,862 | 4,131 | 3,951 | 4,568 | 5,413 | ||||||||||||||||||||||||||
4 - 11 payments |
1,434 | 1,345 | 1,382 | 1,943 | 2,070 | 1,719 | ||||||||||||||||||||||||||
12 payments or more |
250 | 286 | 321 | 312 | 336 | 420 | ||||||||||||||||||||||||||
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Total |
7,872 | 8,835 | 7,601 | 7,857 | 8,488 | 9,840 | ||||||||||||||||||||||||||
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Primary Delinquencies by Missed Payment Status |
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3 payments or less |
7,807 | 7,873 | 8,578 | 7,853 | 7,539 | 8,335 | ||||||||||||||||||||||||||
4 - 11 payments |
4,243 | 4,755 | 4,689 | 4,745 | 5,657 | 6,875 | ||||||||||||||||||||||||||
12 payments or more |
3,432 | 3,578 | 3,892 | 4,276 | 4,855 | 5,392 | ||||||||||||||||||||||||||
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Primary Delinquencies |
15,482 | 16,206 | 17,159 | 16,874 | 18,051 | 20,602 | ||||||||||||||||||||||||||
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June 30, 2019 | ||||||||||||||||||||||||||||||||
Flow Delinquencies and Percentage Reserved by Payment Status |
Delinquencies | Direct Case Reserves(2) |
Risk In-Force | Reserves as % of Risk In-Force |
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3 payments or less in default |
7,629 | $ | 26 | $ | 341 | 8 | % | |||||||||||||||||||||||||
4 - 11 payments in default |
4,162 | 75 | 190 | 39 | % | |||||||||||||||||||||||||||
12 payments or more in default |
3,279 | 121 | 167 | 72 | % | |||||||||||||||||||||||||||
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Total |
15,070 | $ | 222 | $ | 698 | 32 | % | |||||||||||||||||||||||||
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December 31, 2018 | ||||||||||||||||||||||||||||||||
Flow Delinquencies and Percentage Reserved by Payment Status |
Delinquencies | Direct
Case Reserves(2) |
Risk In-Force | Reserves as % of Risk In-Force |
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3 payments or less in default |
8,360 | $ | 31 | $ | 365 | 8 | % | |||||||||||||||||||||||||
4 - 11 payments in default |
4,591 | 88 | 208 | 42 | % | |||||||||||||||||||||||||||
12 payments or more in default |
3,719 | 142 | 188 | 76 | % | |||||||||||||||||||||||||||
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Total |
16,670 | $ | 261 | $ | 761 | 34 | % | |||||||||||||||||||||||||
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(1) | Reserves were not established on loans where the company was in a secondary loss position due to an existing deductible and the company believes they currently have no risk for claim. |
(2) | Direct flow case reserves exclude loss adjustment expenses, incurred but not reported and reinsurance reserves. |
20
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Portfolio Quality MetricsU.S. Mortgage Insurance Segment
2019 | 2018 | |||||||||||||||||||||||
2Q | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||||||
Primary Loans |
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Primary loans in-force |
818,358 | 792,800 | 783,288 | 773,290 | 762,727 | 749,145 | ||||||||||||||||||
Primary delinquent loans |
15,482 | 16,206 | 17,159 | 16,874 | 18,051 | 20,602 | ||||||||||||||||||
Primary delinquency rate |
1.89 | % | 2.04 | % | 2.19 | % | 2.18 | % | 2.37 | % | 2.75 | % | ||||||||||||
Flow loans in-force |
806,739 | 780,733 | 770,657 | 759,965 | 748,497 | 734,411 | ||||||||||||||||||
Flow delinquent loans |
15,070 | 15,764 | 16,670 | 16,367 | 17,505 | 20,007 | ||||||||||||||||||
Flow delinquency rate |
1.87 | % | 2.02 | % | 2.16 | % | 2.15 | % | 2.34 | % | 2.72 | % | ||||||||||||
Bulk loans in-force |
11,619 | 12,067 | 12,631 | 13,325 | 14,230 | 14,734 | ||||||||||||||||||
Bulk delinquent loans |
412 | 442 | 489 | 507 | 546 | 595 | ||||||||||||||||||
Bulk delinquency rate |
3.55 | % | 3.66 | % | 3.87 | % | 3.80 | % | 3.84 | % | 4.04 | % | ||||||||||||
A minus and sub-prime loans in-force |
14,180 | 14,712 | 15,348 | 16,087 | 16,928 | 17,964 | ||||||||||||||||||
A minus and sub-prime delinquent loans |
2,367 | 2,530 | 2,727 | 2,817 | 3,058 | 3,557 | ||||||||||||||||||
A minus and sub-prime delinquency rate |
16.69 | % | 17.20 | % | 17.77 | % | 17.51 | % | 18.06 | % | 19.80 | % | ||||||||||||
Pool Loans |
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Pool loans in-force |
4,331 | 4,470 | 4,535 | 4,636 | 4,774 | 4,961 | ||||||||||||||||||
Pool delinquent loans |
177 | 187 | 220 | 215 | 204 | 220 | ||||||||||||||||||
Pool delinquency rate |
4.09 | % | 4.18 | % | 4.85 | % | 4.64 | % | 4.27 | % | 4.43 | % | ||||||||||||
Primary Risk In-Force by Credit Quality |
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Over 735 |
57 | % | 57 | % | 57 | % | 57 | % | 57 | % | 57 | % | ||||||||||||
680-735 |
32 | % | 32 | % | 32 | % | 32 | % | 32 | % | 32 | % | ||||||||||||
660-679(1) |
5 | % | 5 | % | 5 | % | 5 | % | 5 | % | 5 | % | ||||||||||||
620-659 |
5 | % | 5 | % | 5 | % | 5 | % | 5 | % | 5 | % | ||||||||||||
<620 |
1 | % | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % |
(1) | Loans with unknown FICO scores are included in the 660-679 category. |
21
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Portfolio Quality MetricsU.S. Mortgage Insurance Segment
(amounts in millions)
June 30, 2019 | ||||||||||||||||||||||||||||
Policy Year |
Average Rate(1) |
% of
Total Reserves(2) |
Primary Insurance In-Force |
% of Total | Primary Risk In-Force |
% of Total | Delinquency Rate |
|||||||||||||||||||||
2004 and prior |
6.10 | % | 8.4 | % | $ | 1,515 | 0.9 | % | $ | 285 | 0.7 | % | 11.39 | % | ||||||||||||||
2005 to 2008 |
5.47 | % | 58.2 | 17,576 | 9.8 | 4,037 | 9.4 | 7.79 | % | |||||||||||||||||||
2009 to 2012 |
4.29 | % | 2.2 | 3,934 | 2.2 | 913 | 2.1 | 1.80 | % | |||||||||||||||||||
2013 |
4.11 | % | 1.8 | 4,755 | 2.7 | 1,162 | 2.7 | 1.44 | % | |||||||||||||||||||
2014 |
4.45 | % | 4.4 | 8,277 | 4.6 | 2,013 | 4.7 | 1.80 | % | |||||||||||||||||||
2015 |
4.15 | % | 6.2 | 16,648 | 9.3 | 4,023 | 9.3 | 1.27 | % | |||||||||||||||||||
2016 |
3.89 | % | 7.5 | 30,515 | 17.1 | 7,348 | 17.0 | 0.93 | % | |||||||||||||||||||
2017 |
4.25 | % | 7.2 | 33,245 | 18.6 | 8,087 | 18.8 | 0.90 | % | |||||||||||||||||||
2018 |
4.77 | % | 3.9 | 36,887 | 20.7 | 9,025 | 20.9 | 0.49 | % | |||||||||||||||||||
2019 |
4.75 | % | 0.2 | 25,129 | 14.1 | 6,191 | 14.4 | 0.07 | % | |||||||||||||||||||
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Total |
4.53 | % | 100.0 | % | $ | 178,481 | 100.0 | % | $ | 43,084 | 100.0 | % | 1.89 | % | ||||||||||||||
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|||||||||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||||||||||||||||||
Primary Risk In-Force |
Primary Delinquency Rate |
Primary Risk In-Force |
Primary Delinquency Rate |
Primary Risk In-Force |
Primary Delinquency Rate |
|||||||||||||||||||||||
Lender concentration (by original applicant) |
$ | 43,084 | 1.89 | % | $ | 41,193 | 2.04 | % | $ | 38,628 | 2.37 | % | ||||||||||||||||
Top 10 lenders |
$ | 12,597 | 2.11 | % | $ | 11,617 | 2.38 | % | $ | 11,249 | 2.83 | % | ||||||||||||||||
Top 20 lenders |
$ | 16,729 | 2.03 | % | $ | 15,555 | 2.27 | % | $ | 15,014 | 2.75 | % | ||||||||||||||||
Loan-to-value ratio |
||||||||||||||||||||||||||||
95.01% and above |
$ | 7,837 | 3.16 | % | $ | 7,401 | 3.46 | % | $ | 6,594 | 4.22 | % | ||||||||||||||||
90.01% to 95.00% |
22,389 | 1.49 | % | 21,433 | 1.59 | % | 20,088 | 1.75 | % | |||||||||||||||||||
80.01% to 90.00% |
12,699 | 1.59 | % | 12,195 | 1.73 | % | 11,762 | 2.05 | % | |||||||||||||||||||
80.00% and below |
159 | 2.43 | % | 164 | 2.43 | % | 184 | 2.81 | % | |||||||||||||||||||
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Total |
$ | 43,084 | 1.89 | % | $ | 41,193 | 2.04 | % | $ | 38,628 | 2.37 | % | ||||||||||||||||
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Loan grade |
||||||||||||||||||||||||||||
Prime |
$ | 42,587 | 1.63 | % | $ | 40,678 | 1.76 | % | $ | 38,035 | 2.01 | % | ||||||||||||||||
A minus and sub-prime |
497 | 16.69 | % | 515 | 17.20 | % | 593 | 18.06 | % | |||||||||||||||||||
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Total |
$ | 43,084 | 1.89 | % | $ | 41,193 | 2.04 | % | $ | 38,628 | 2.37 | % | ||||||||||||||||
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|
(1) | Average Annual Mortgage Interest Rate. |
(2) | Total reserves were $254 million as of June 30, 2019. |
22
Canada Mortgage Insurance Segment
23
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Adjusted Operating Income and SalesCanada Mortgage Insurance Segment
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||
Premiums |
$ | 125 | $ | 126 | $ | 251 | $ | 128 | $ | 127 | $ | 131 | $ | 139 | $ | 525 | ||||||||||||||||
Net investment income |
35 | 34 | 69 | 36 | 34 | 34 | 34 | 138 | ||||||||||||||||||||||||
Net investment gains (losses) |
1 | (1 | ) | | (136 | ) | 29 | (15 | ) | (15 | ) | (137 | ) | |||||||||||||||||||
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Total revenues |
161 | 159 | 320 | 28 | 190 | 150 | 158 | 526 | ||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
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Benefits and other changes in policy reserves |
19 | 19 | 38 | 23 | 18 | 19 | 18 | 78 | ||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
22 | 20 | 42 | 16 | 17 | 20 | 17 | 70 | ||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
11 | 10 | 21 | 11 | 11 | 11 | 10 | 43 | ||||||||||||||||||||||||
Interest expense |
5 | 4 | 9 | 5 | 4 | 4 | 5 | 18 | ||||||||||||||||||||||||
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Total benefits and expenses |
57 | 53 | 110 | 55 | 50 | 54 | 50 | 209 | ||||||||||||||||||||||||
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INCOME (LOSS) BEFORE INCOME TAXES |
104 | 106 | 210 | (27 | ) | 140 | 96 | 108 | 317 | |||||||||||||||||||||||
Provision (benefit) for income taxes |
29 | 29 | 58 | (7 | ) | 37 | 24 | 30 | 84 | |||||||||||||||||||||||
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NET INCOME (LOSS) |
75 | 77 | 152 | (20 | ) | 103 | 72 | 78 | 233 | |||||||||||||||||||||||
Less: net income (loss) attributable to noncontrolling interests |
35 | 36 | 71 | (6 | ) | 46 | 32 | 36 | 108 | |||||||||||||||||||||||
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NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
40 | 41 | 81 | (14 | ) | 57 | 40 | 42 | 125 | |||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||||||||||
Net investment (gains) losses, net(1) |
| | | 78 | (17 | ) | 8 | 9 | 78 | |||||||||||||||||||||||
(Gains) losses on early extinguishment of debt, net(2) |
1 | | 1 | | | | | | ||||||||||||||||||||||||
Taxes on adjustments |
| | | (16 | ) | 4 | (2 | ) | (2 | ) | (16 | ) | ||||||||||||||||||||
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ADJUSTED OPERATING INCOME(3) |
$ | 41 | $ | 41 | $ | 82 | $ | 48 | $ | 44 | $ | 46 | $ | 49 | $ | 187 | ||||||||||||||||
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SALES: |
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New Insurance Written (NIW) |
||||||||||||||||||||||||||||||||
Flow |
$ | 3,900 | $ | 2,200 | $ | 6,100 | $ | 3,300 | $ | 4,200 | $ | 3,700 | $ | 2,500 | $ | 13,700 | ||||||||||||||||
Bulk |
1,900 | 700 | 2,600 | 900 | 600 | 900 | 900 | 3,300 | ||||||||||||||||||||||||
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Total Canada NIW(4) |
$ | 5,800 | $ | 2,900 | $ | 8,700 | $ | 4,200 | $ | 4,800 | $ | 4,600 | $ | 3,400 | $ | 17,000 | ||||||||||||||||
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(1) Net investment (gains) losses were adjusted for the portion of net investment gains (losses) attributable to noncontrolling interests as reconciled below: |
| |||||||||||||||||||||||||||||||
Net investment (gains) losses, gross |
$ | (1 | ) | $ | 1 | $ | | $ | 136 | $ | (29 | ) | $ | 15 | $ | 15 | $ | 137 | ||||||||||||||
Adjustment for net investment gains (losses) attributable to noncontrolling interests |
1 | (1 | ) | | (58 | ) | 12 | (7 | ) | (6 | ) | (59 | ) | |||||||||||||||||||
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Net investment (gains) losses, net |
$ | | $ | | $ | | $ | 78 | $ | (17 | ) | $ | 8 | $ | 9 | $ | 78 | |||||||||||||||
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(2) | For the three months ended June 30, 2019, (gains) losses on the early extinguishment of debt were adjusted for the portion attributable to noncontrolling interests of $1 million. |
(3) | Adjusted operating income for the Canadian platform adjusted for foreign exchange as compared to the prior year period was $43 million and $87 million for the three and six months ended June 30, 2019, respectively. |
(4) | New insurance written for the Canadian platform adjusted for foreign exchange as compared to the prior year period was $6,100 million and $9,100 million for the three and six months ended June 30, 2019, respectively. |
24
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Selected Key Performance MeasuresCanada Mortgage Insurance Segment
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
Net Premiums Written |
$ | 145 | $ | 79 | $ | 224 | $ | 119 | $ | 150 | $ | 133 | $ | 92 | $ | 494 | ||||||||||||||||
Loss Ratio(1) |
15 | % | 15 | % | 15 | % | 18 | % | 14 | % | 15 | % | 13 | % | 15 | % | ||||||||||||||||
Expense Ratio (Net Earned Premiums)(2) |
26 | % | 24 | % | 25 | % | 21 | % | 22 | % | 23 | % | 20 | % | 22 | % | ||||||||||||||||
Expense Ratio (Net Premiums Written)(3) |
22 | % | 39 | % | 28 | % | 23 | % | 19 | % | 23 | % | 30 | % | 23 | % | ||||||||||||||||
Primary Insurance In-Force(4) |
$ | 395,700 | $ | 382,200 | $ | 372,000 | $ | 389,400 | $ | 380,200 | $ | 384,600 | ||||||||||||||||||||
Primary Risk In-Force(5) |
||||||||||||||||||||||||||||||||
Flow |
$ | 94,900 | $ | 91,600 | $ | 89,000 | $ | 92,800 | $ | 89,800 | $ | 90,500 | ||||||||||||||||||||
Bulk |
43,600 | 42,200 | 41,200 | 43,500 | 43,300 | 44,100 | ||||||||||||||||||||||||||
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Total |
$ | 138,500 | $ | 133,800 | $ | 130,200 | $ | 136,300 | $ | 133,100 | $ | 134,600 | ||||||||||||||||||||
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June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||||||||
Risk In-Force by Loan-To-Value Ratio(6) |
Primary | Flow | Bulk | Primary | Flow | Bulk | ||||||||||||||||||||||||||
95.01% and above |
$ | 47,842 | $ | 47,842 | $ | | $ | 45,964 | $ | 45,964 | $ | | ||||||||||||||||||||
90.01% to 95.00% |
27,898 | 27,898 | | 26,987 | 26,987 | | ||||||||||||||||||||||||||
80.01% to 90.00% |
15,974 | 15,974 | | 15,532 | 15,532 | | ||||||||||||||||||||||||||
80.00% and below |
46,774 | 3,152 | 43,622 | 45,303 | 3,075 | 42,228 | ||||||||||||||||||||||||||
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Total |
$ | 138,488 | $ | 94,866 | $ | 43,622 | $ | 133,786 | $ | 91,558 | $ | 42,228 | ||||||||||||||||||||
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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) | The ratio of benefits and other changes in policy reserves to net earned premiums. |
(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 premiums written. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. |
(4) | As part of an ongoing effort to improve the estimate of outstanding insurance exposure, the company is receiving updated outstanding balances in Canada from almost all of its customers. As a result, the company estimates that the outstanding balance of insured mortgages was approximately $157.0 billion, $154.0 billion, $152.0 billion, $163.0 billion, $162.0 billion and $168.0 billion as of June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively. This is based on the extrapolation of the amounts reported by lenders to the entire insured population. The current period reported amount is an estimate due to the timing of information received by the companys customers. |
(5) | The business currently provides 100% coverage on the majority of the loans the company insures. For the purpose of representing the risk in-force, Canada 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 business. This factor was 35% for all periods presented. |
(6) | Loan amount in loan-to-value ratio calculation includes capitalized premiums, where applicable. |
25
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Selected Key Performance MeasuresCanada Mortgage Insurance Segment
(dollar amounts in millions)
Primary Insurance |
June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||||||||||
Insured loans in-force(1),(2) |
2,174,084 | 2,152,048 | 2,143,191 | 2,133,618 | 2,137,221 | |||||||||||||||||||
Insured delinquent loans |
1,701 | 1,760 | 1,684 | 1,695 | 1,742 | |||||||||||||||||||
Insured delinquency rate(2),(3) |
0.08 | % | 0.08 | % | 0.08 | % | 0.08 | % | 0.08 | % | ||||||||||||||
Flow loans in-force(1) |
1,523,128 | 1,507,283 | 1,499,304 | 1,486,859 | 1,470,826 | |||||||||||||||||||
Flow delinquent loans |
1,340 | 1,384 | 1,310 | 1,327 | 1,406 | |||||||||||||||||||
Flow delinquency rate(3) |
0.09 | % | 0.09 | % | 0.09 | % | 0.09 | % | 0.10 | % | ||||||||||||||
Bulk loans in-force(1) |
650,956 | 644,765 | 643,887 | 646,759 | 666,395 | |||||||||||||||||||
Bulk delinquent loans |
361 | 376 | 374 | 368 | 336 | |||||||||||||||||||
Bulk delinquency rate(3) |
0.06 | % | 0.06 | % | 0.06 | % | 0.06 | % | 0.05 | % | ||||||||||||||
Loss Metrics |
June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||||||||||
Beginning Reserves |
$ | 88 | $ | 84 | $ | 82 | $ | 83 | $ | 84 | ||||||||||||||
Paid claims(4) |
(18 | ) | (19 | ) | (18 | ) | (19 | ) | (20 | ) | ||||||||||||||
Increase in reserves |
19 | 21 | 24 | 17 | 21 | |||||||||||||||||||
Impact of changes in foreign exchange rates |
2 | 2 | (4 | ) | 1 | (2 | ) | |||||||||||||||||
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Ending Reserves |
$ | 91 | $ | 88 | $ | 84 | $ | 82 | $ | 83 | ||||||||||||||
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June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||||||||||||||
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 |
47 | % | 0.03 | % | 47 | % | 0.03 | % | 47 | % | 0.03 | % | ||||||||||||
Alberta |
17 | 0.21 | % | 17 | 0.19 | % | 16 | 0.17 | % | |||||||||||||||
British Columbia |
14 | 0.04 | % | 14 | 0.04 | % | 14 | 0.04 | % | |||||||||||||||
Quebec |
13 | 0.07 | % | 13 | 0.09 | % | 13 | 0.10 | % | |||||||||||||||
Saskatchewan |
3 | 0.27 | % | 3 | 0.29 | % | 3 | 0.28 | % | |||||||||||||||
Nova Scotia |
2 | 0.13 | % | 2 | 0.13 | % | 2 | 0.15 | % | |||||||||||||||
Manitoba |
2 | 0.09 | % | 2 | 0.11 | % | 2 | 0.10 | % | |||||||||||||||
New Brunswick |
1 | 0.08 | % | 1 | 0.13 | % | 1 | 0.15 | % | |||||||||||||||
All Other |
1 | 0.20 | % | 1 | 0.20 | % | 2 | 0.20 | % | |||||||||||||||
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Total |
100 | % | 0.08 | % | 100 | % | 0.08 | % | 100 | % | 0.08 | % | ||||||||||||
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By Policy Year |
||||||||||||||||||||||||
2010 and prior |
39 | % | 0.04 | % | 39 | % | 0.04 | % | 41 | % | 0.05 | % | ||||||||||||
2011 |
5 | 0.14 | % | 5 | 0.15 | % | 5 | 0.13 | % | |||||||||||||||
2012 |
6 | 0.16 | % | 6 | 0.17 | % | 6 | 0.18 | % | |||||||||||||||
2013 |
6 | 0.16 | % | 6 | 0.18 | % | 6 | 0.15 | % | |||||||||||||||
2014 |
7 | 0.17 | % | 7 | 0.17 | % | 8 | 0.16 | % | |||||||||||||||
2015 |
10 | 0.11 | % | 11 | 0.12 | % | 11 | 0.11 | % | |||||||||||||||
2016 |
13 | 0.08 | % | 13 | 0.08 | % | 13 | 0.08 | % | |||||||||||||||
2017 |
7 | 0.09 | % | 7 | 0.08 | % | 7 | 0.04 | % | |||||||||||||||
2018 |
5 | 0.03 | % | 5 | 0.02 | % | 3 | | % | |||||||||||||||
2019 |
2 | | % | 1 | | % | | | % | |||||||||||||||
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Total |
100 | % | 0.08 | % | 100 | % | 0.08 | % | 100 | % | 0.08 | % | ||||||||||||
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(1) | Insured loans in-force represent the original number of loans insured for which the coverage term has not expired, and for which no policy level cancellation or termination has been received. |
(2) | As part of an ongoing effort to improve the estimate of outstanding insurance exposure, the company is receiving updated outstanding loans in-force in Canada from almost all of its customers. As a result, the company estimates that the outstanding loans in-force were 901,000 as of June 30, 2019, 902,000 as of March 31, 2019, 910,000 as of December 31, 2018, 924,000 as of September 30, 2018 and 935,000 as of June 30, 2018. This is based on the extrapolation of the amounts reported by lenders to the entire insured population. The corresponding insured delinquency rate was 0.19% as of June 30, 2019, 0.20% as of March 31, 2019, 0.18% as of December 31, 2018 and September 30, 2018 and 0.19% as of June 30, 2018. The current period reported amounts are estimates due to the timing of information received by the companys customers. |
(3) | Delinquency rates are based on insured loans in-force. |
(4) | Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims. |
26
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Selected Key Performance MeasuresCanada Mortgage Insurance Segment
(Canadian dollar amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
Paid claims(1) |
||||||||||||||||||||||||||||||||
Flow |
$ | 22 | $ | 26 | $ | 48 | $ | 18 | $ | 23 | $ | 26 | $ | 23 | $ | 90 | ||||||||||||||||
Bulk |
1 | 1 | 2 | 2 | 2 | 1 | 2 | 7 | ||||||||||||||||||||||||
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Total Paid Claims |
$ | 23 | $ | 27 | $ | 50 | $ | 20 | $ | 25 | $ | 27 | $ | 25 | $ | 97 | ||||||||||||||||
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Average Paid Claim (in thousands) |
$ | 67.0 | $ | 81.2 | $ | 58.1 | $ | 67.4 | $ | 79.4 | $ | 68.5 | ||||||||||||||||||||
Average Reserve Per Delinquency (in thousands) |
$ | 69.9 | $ | 66.4 | $ | 68.0 | $ | 62.6 | $ | 62.5 | $ | 62.7 | ||||||||||||||||||||
Loss Metrics | ||||||||||||||||||||||||||||||||
Beginning Reserves |
$ | 117 | $ | 115 | $ | 115 | $ | 106 | $ | 109 | $ | 108 | $ | 109 | $ | 109 | ||||||||||||||||
Paid claims(1) |
(23 | ) | (27 | ) | (50 | ) | (20 | ) | (25 | ) | (27 | ) | (25 | ) | (97 | ) | ||||||||||||||||
Increase in reserves |
25 | 29 | 54 | 29 | 22 | 28 | 24 | 103 | ||||||||||||||||||||||||
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Ending Reserves |
$ | 119 | $ | 117 | $ | 119 | $ | 115 | $ | 106 | $ | 109 | $ | 108 | $ | 115 | ||||||||||||||||
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Loan Amount(2) |
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Over $550K |
9 | % | 9 | % | 9 | % | 9 | % | 9 | % | 8 | % | ||||||||||||||||||||
$400K to $550K |
15 | 15 | 15 | 15 | 15 | 15 | ||||||||||||||||||||||||||
$250K to $400K |
35 | 35 | 35 | 34 | 34 | 34 | ||||||||||||||||||||||||||
$100K to $250K |
38 | 38 | 38 | 39 | 39 | 39 | ||||||||||||||||||||||||||
$100K or Less |
3 | 3 | 3 | 3 | 3 | 4 | ||||||||||||||||||||||||||
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Total |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||
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Average Primary Loan Size (in thousands) |
$ | 238 | $ | 237 | $ | 237 | $ | 236 | $ | 234 | $ | 233 |
All amounts presented in Canadian dollars.
(1) | Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims. |
(2) | The percentages in this table are based on the amount of primary insurance in-force in each loan band as a percentage of total insurance in-force. |
27
Australia Mortgage Insurance Segment
28
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Adjusted Operating Income and SalesAustralia Mortgage Insurance Segment
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
REVENUES: |
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Premiums |
$ | 80 | $ | 83 | $ | 163 | $ | 82 | $ | 87 | $ | 106 | $ | 98 | $ | 373 | ||||||||||||||||
Net investment income |
15 | 16 | 31 | 15 | 17 | 18 | 17 | 67 | ||||||||||||||||||||||||
Net investment gains (losses) |
1 | 12 | 13 | (19 | ) | 1 | 12 | (9 | ) | (15 | ) | |||||||||||||||||||||
Policy fees and other income |
| (1 | ) | (1 | ) | 1 | | | 1 | 2 | ||||||||||||||||||||||
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Total revenues |
96 | 110 | 206 | 79 | 105 | 136 | 107 | 427 | ||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
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Benefits and other changes in policy reserves |
26 | 28 | 54 | 24 | 27 | 29 | 30 | 110 | ||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
17 | 17 | 34 | 16 | 15 | 17 | 17 | 65 | ||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
9 | 9 | 18 | 10 | 10 | 12 | 11 | 43 | ||||||||||||||||||||||||
Interest expense |
2 | 2 | 4 | 2 | 3 | 2 | 2 | 9 | ||||||||||||||||||||||||
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Total benefits and expenses |
54 | 56 | 110 | 52 | 55 | 60 | 60 | 227 | ||||||||||||||||||||||||
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INCOME BEFORE INCOME TAXES |
42 | 54 | 96 | 27 | 50 | 76 | 47 | 200 | ||||||||||||||||||||||||
Provision for income taxes |
13 | 16 | 29 | 8 | 15 | 23 | 14 | 60 | ||||||||||||||||||||||||
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NET INCOME |
29 | 38 | 67 | 19 | 35 | 53 | 33 | 140 | ||||||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
15 | 20 | 35 | 8 | 18 | 27 | 17 | 70 | ||||||||||||||||||||||||
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NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
14 | 18 | 32 | 11 | 17 | 26 | 16 | 70 | ||||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
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Net investment (gains) losses, net(1) |
(1 | ) | (6 | ) | (7 | ) | 10 | | (6 | ) | 4 | 8 | ||||||||||||||||||||
Taxes on adjustments |
| 2 | 2 | (3 | ) | | 2 | (1 | ) | (2 | ) | |||||||||||||||||||||
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ADJUSTED OPERATING INCOME(2) |
$ | 13 | $ | 14 | $ | 27 | $ | 18 | $ | 17 | $ | 22 | $ | 19 | $ | 76 | ||||||||||||||||
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SALES: |
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New Insurance Written (NIW) |
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Flow |
$ | 3,700 | $ | 3,400 | $ | 7,100 | $ | 4,000 | $ | 3,800 | $ | 3,700 | $ | 3,400 | $ | 14,900 | ||||||||||||||||
Bulk |
1,200 | 500 | 1,700 | 800 | | 900 | | 1,700 | ||||||||||||||||||||||||
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Total Australia NIW(3),(4) |
$ | 4,900 | $ | 3,900 | $ | 8,800 | $ | 4,800 | $ | 3,800 | $ | 4,600 | $ | 3,400 | $ | 16,600 | ||||||||||||||||
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(1) Net investment (gains) losses were adjusted for the portion of net investment gains (losses) attributable to noncontrolling interests as reconciled below:
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Net investment (gains) losses, gross |
$ | (1 | ) | $ | (12 | ) | $ | (13 | ) | $ | 19 | $ | (1 | ) | $ | (12 | ) | $ | 9 | $ | 15 | |||||||||||
Adjustment for net investment gains (losses) attributable to noncontrolling interests |
| 6 | 6 | (9 | ) | 1 | 6 | (5 | ) | (7 | ) | |||||||||||||||||||||
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Net investment (gains) losses, net |
$ | (1 | ) | $ | (6 | ) | $ | (7 | ) | $ | 10 | $ | | $ | (6 | ) | $ | 4 | $ | 8 | ||||||||||||
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(2) | Adjusted operating income for the Australian platform adjusted for foreign exchange as compared to the prior year period was $14 million and $30 million for the three and six months ended June 30, 2019, respectively. |
(3) | New insurance written for the Australian platform adjusted for foreign exchange as compared to the prior year period was $5,400 million and $9,600 million for the three and six months ended June 30, 2019, respectively. |
(4) | The business currently has structured insurance transactions with three lenders where it is in a secondary loss position. The new insurance written associated with these arrangements is excluded from these metrics. |
29
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Selected Key Performance MeasuresAustralia Mortgage Insurance Segment
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
Net Premiums Written |
$ | 58 | $ | 52 | $ | 110 | $ | 70 | $ | 56 | $ | 56 | $ | 60 | $ | 242 | ||||||||||||||||
Loss Ratio(1) |
34 | % | 34 | % | 34 | % | 29 | % | 31 | % | 28 | % | 30 | % | 30 | % | ||||||||||||||||
Expense Ratio (Net Earned Premiums)(2) |
33 | % | 31 | % | 32 | % | 32 | % | 29 | % | 27 | % | 29 | % | 29 | % | ||||||||||||||||
Expense Ratio (Net Premiums Written)(3) |
44 | % | 50 | % | 47 | % | 38 | % | 46 | % | 50 | % | 47 | % | 45 | % | ||||||||||||||||
Primary Insurance In-Force(4) |
$ | 215,600 | $ | 219,200 | $ | 218,200 | $ | 222,500 | $ | 229,400 | $ | 246,300 | ||||||||||||||||||||
Primary Risk In-Force(4),(5) |
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Flow |
$ | 69,100 | $ | 70,600 | $ | 70,300 | $ | 71,900 | $ | 74,000 | $ | 79,600 | ||||||||||||||||||||
Bulk |
6,000 | 5,700 | 5,700 | 5,600 | 5,900 | 6,100 | ||||||||||||||||||||||||||
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Total |
$ | 75,100 | $ | 76,300 | $ | 76,000 | $ | 77,500 | $ | 79,900 | $ | 85,700 | ||||||||||||||||||||
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June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||||||||
Risk In-Force by Loan-To-Value Ratio(4),(6) |
Primary | Flow | Bulk | Primary | Flow | Bulk | ||||||||||||||||||||||||||
95.01% and above |
$ | 10,624 | $ | 10,624 | $ | | $ | 11,045 | $ | 11,045 | $ | | ||||||||||||||||||||
90.01% to 95.00% |
20,938 | 20,932 | 6 | 21,247 | 21,242 | 5 | ||||||||||||||||||||||||||
80.01% to 90.00% |
22,722 | 22,656 | 66 | 22,845 | 22,783 | 62 | ||||||||||||||||||||||||||
80.00% and below |
20,809 | 14,924 | 5,885 | 21,170 | 15,511 | 5,659 | ||||||||||||||||||||||||||
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Total |
$ | 75,093 | $ | 69,136 | $ | 5,957 | $ | 76,307 | $ | 70,581 | $ | 5,726 | ||||||||||||||||||||
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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) | The ratio of benefits and other changes in policy reserves to net earned premiums. |
(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 premiums written. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. |
(4) | The business currently has structured insurance transactions with three lenders where it is in a secondary loss position. The insurance in-force and risk in-force associated with these arrangements are excluded from these metrics. The risk in-force on these transactions was approximately $157 million, $157 million, $154 million, $158 million, $159 million and $160 million as of June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively. |
(5) | The business currently provides 100% coverage on the majority of the loans the company insures. For the purpose of representing the risk in-force, Australia 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 business. This factor was 35% for all periods presented. Australia also has certain risk share arrangements where it provides pro-rata coverage of certain loans rather than 100% coverage. As a result, for loans with these risk share arrangements, the applicable pro-rata coverage amount provided is used when applying the factor. |
(6) | Loan amount in loan-to-value ratio calculation includes capitalized premiums, where applicable. |
30
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Selected Key Performance MeasuresAustralia Mortgage Insurance Segment
(dollar amounts in millions)
Primary Insurance(1) |
June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||||||||||
Insured loans in-force |
1,308,811 | 1,323,172 | 1,332,906 | 1,335,133 | 1,354,614 | |||||||||||||||||||
Insured delinquent loans |
7,891 | 7,490 | 7,145 | 7,350 | 7,306 | |||||||||||||||||||
Insured delinquency rate |
0.60 | % | 0.57 | % | 0.54 | % | 0.55 | % | 0.54 | % | ||||||||||||||
Flow loans in-force |
1,200,603 | 1,217,050 | 1,226,219 | 1,229,558 | 1,247,229 | |||||||||||||||||||
Flow delinquent loans |
7,642 | 7,265 | 6,931 | 7,133 | 7,076 | |||||||||||||||||||
Flow delinquency rate |
0.64 | % | 0.60 | % | 0.57 | % | 0.58 | % | 0.57 | % | ||||||||||||||
Bulk loans in-force |
108,208 | 106,122 | 106,687 | 105,575 | 107,385 | |||||||||||||||||||
Bulk delinquent loans |
249 | 225 | 214 | 217 | 230 | |||||||||||||||||||
Bulk delinquency rate |
0.23 | % | 0.21 | % | 0.20 | % | 0.21 | % | 0.21 | % | ||||||||||||||
Loss Metrics |
June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||||||||||
Beginning Reserves |
$ | 204 | $ | 196 | $ | 201 | $ | 206 | $ | 211 | ||||||||||||||
Paid claims(2) |
(20 | ) | (22 | ) | (25 | ) | (27 | ) | (25 | ) | ||||||||||||||
Increase in reserves |
27 | 28 | 25 | 26 | 29 | |||||||||||||||||||
Impact of changes in foreign exchange rates |
(2 | ) | 2 | (5 | ) | (4 | ) | (9 | ) | |||||||||||||||
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Ending Reserves |
$ | 209 | $ | 204 | $ | 196 | $ | 201 | $ | 206 | ||||||||||||||
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June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||||||||||||||
State and Territory(1) |
% 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 |
27 | % | 0.45 | % | 28 | % | 0.41 | % | 28 | % | 0.37 | % | ||||||||||||
Queensland |
23 | 0.81 | % | 23 | 0.74 | % | 23 | 0.73 | % | |||||||||||||||
Victoria |
23 | 0.45 | % | 22 | 0.42 | % | 23 | 0.42 | % | |||||||||||||||
Western Australia |
13 | 1.10 | % | 13 | 1.05 | % | 12 | 0.99 | % | |||||||||||||||
South Australia |
6 | 0.68 | % | 6 | 0.69 | % | 6 | 0.67 | % | |||||||||||||||
Australian Capital Territory |
3 | 0.25 | % | 3 | 0.19 | % | 3 | 0.18 | % | |||||||||||||||
Tasmania |
2 | 0.31 | % | 2 | 0.28 | % | 2 | 0.34 | % | |||||||||||||||
New Zealand |
2 | 0.02 | % | 2 | 0.04 | % | 2 | 0.06 | % | |||||||||||||||
Northern Territory |
1 | 0.83 | % | 1 | 0.76 | % | 1 | 0.61 | % | |||||||||||||||
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Total |
100 | % | 0.60 | % | 100 | % | 0.57 | % | 100 | % | 0.54 | % | ||||||||||||
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By Policy Year(1) |
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2010 and prior |
44 | % | 0.52 | % | 45 | % | 0.49 | % | 47 | % | 0.49 | % | ||||||||||||
2011 |
4 | 0.80 | % | 4 | 0.78 | % | 5 | 0.75 | % | |||||||||||||||
2012 |
6 | 1.11 | % | 6 | 1.05 | % | 6 | 0.92 | % | |||||||||||||||
2013 |
7 | 1.10 | % | 7 | 0.98 | % | 7 | 0.87 | % | |||||||||||||||
2014 |
8 | 0.97 | % | 8 | 0.90 | % | 9 | 0.79 | % | |||||||||||||||
2015 |
7 | 0.82 | % | 8 | 0.74 | % | 8 | 0.59 | % | |||||||||||||||
2016 |
7 | 0.60 | % | 7 | 0.54 | % | 8 | 0.35 | % | |||||||||||||||
2017 |
7 | 0.36 | % | 7 | 0.28 | % | 7 | 0.11 | % | |||||||||||||||
2018 |
7 | 0.15 | % | 7 | 0.07 | % | 3 | | % | |||||||||||||||
2019 |
3 | 0.01 | % | 1 | | % | | | % | |||||||||||||||
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Total |
100 | % | 0.60 | % | 100 | % | 0.57 | % | 100 | % | 0.54 | % | ||||||||||||
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(1) | The business currently has structured insurance transactions with three lenders where it is in a secondary loss position. The loans in-force, including delinquent loans, and risk in-force associated with these arrangements are excluded from these metrics. |
(2) | Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims. |
31
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Selected Key Performance MeasuresAustralia Mortgage Insurance Segment
(Australian dollar amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
Paid Claims(1) |
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Flow |
$ | 28 | $ | 30 | $ | 58 | $ | 34 | $ | 38 | $ | 33 | $ | 44 | $ | 149 | ||||||||||||||||
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Total Paid Claims |
$ | 28 | $ | 30 | $ | 58 | $ | 34 | $ | 38 | $ | 33 | $ | 44 | $ | 149 | ||||||||||||||||
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Average Paid Claim (in thousands) |
$ | 94.1 | $ | 94.2 | $ | 104.2 | $ | 117.2 | $ | 110.1 | $ | 119.5 | ||||||||||||||||||||
Average Reserve Per Delinquency (in thousands) |
$ | 37.8 | $ | 38.4 | $ | 39.0 | $ | 37.9 | $ | 38.2 | $ | 39.4 | ||||||||||||||||||||
Loss Metrics |
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Beginning Reserves |
$ | 288 | $ | 279 | $ | 279 | $ | 278 | $ | 279 | $ | 274 | $ | 280 | $ | 280 | ||||||||||||||||
Paid claims(1) |
(28 | ) | (30 | ) | (58 | ) | (34 | ) | (38 | ) | (33 | ) | (44 | ) | (149 | ) | ||||||||||||||||
Increase in reserves |
38 | 39 | 77 | 35 | 37 | 38 | 38 | 148 | ||||||||||||||||||||||||
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Ending Reserves |
$ | 298 | $ | 288 | $ | 298 | $ | 279 | $ | 278 | $ | 279 | $ | 274 | $ | 279 | ||||||||||||||||
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Loan Amount(2),(3) |
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Over $550K |
19 | % | 18 | % | 18 | % | 18 | % | 17 | % | 17 | % | ||||||||||||||||||||
$400K to $550K |
21 | 21 | 21 | 21 | 21 | 20 | ||||||||||||||||||||||||||
$250K to $400K |
33 | 34 | 34 | 34 | 34 | 35 | ||||||||||||||||||||||||||
$100K to $250K |
22 | 22 | 22 | 22 | 23 | 23 | ||||||||||||||||||||||||||
$100K or Less |
5 | 5 | 5 | 5 | 5 | 5 | ||||||||||||||||||||||||||
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Total |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||
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Average Primary Loan Size (in thousands)(3) |
$ | 235 | $ | 233 | $ | 232 | $ | 231 | $ | 229 | $ | 228 |
All amounts presented in Australian dollars.
(1) | Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims. |
(2) | The percentages in this table are based on the amount of primary insurance in-force in each loan band as a percentage of total insurance in-force. |
(3) | The business currently has structured insurance transactions with three lenders where it is in a secondary loss position. The loans in-force associated with these arrangements are excluded from these metrics. |
32
U.S. Life Insurance Segment
33
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Adjusted Operating Income (Loss)U.S. Life Insurance Segment
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||
Premiums |
$ | 713 | $ | 709 | $ | 1,422 | $ | 716 | $ | 717 | $ | 712 | $ | 722 | $ | 2,867 | ||||||||||||||||
Net investment income |
724 | 701 | 1,425 | 690 | 696 | 707 | 688 | 2,781 | ||||||||||||||||||||||||
Net investment gains (losses) |
(36 | ) | 84 | 48 | 38 | (7 | ) | (10 | ) | 8 | 29 | |||||||||||||||||||||
Policy fees and other income |
187 | 151 | 338 | 154 | 155 | 169 | 163 | 641 | ||||||||||||||||||||||||
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Total revenues |
1,588 | 1,645 | 3,233 | 1,598 | 1,561 | 1,578 | 1,581 | 6,318 | ||||||||||||||||||||||||
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|
|||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
1,211 | 1,236 | 2,447 | 1,767 | 1,248 | 1,163 | 1,238 | 5,416 | ||||||||||||||||||||||||
Interest credited |
106 | 106 | 212 | 113 | 113 | 116 | 119 | 461 | ||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
142 | 148 | 290 | 153 | 144 | 146 | 141 | 584 | ||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
67 | 66 | 133 | 55 | 53 | 78 | 71 | 257 | ||||||||||||||||||||||||
Interest expense |
4 | 5 | 9 | 4 | 4 | 4 | 4 | 16 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total benefits and expenses |
1,530 | 1,561 | 3,091 | 2,092 | 1,562 | 1,507 | 1,573 | 6,734 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
58 | 84 | 142 | (494 | ) | (1 | ) | 71 | 8 | (416 | ) | |||||||||||||||||||||
Provision (benefit) for income taxes |
19 | 24 | 43 | (101 | ) | 6 | 21 | 6 | (68 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
NET INCOME (LOSS) |
39 | 60 | 99 | (393 | ) | (7 | ) | 50 | 2 | (348 | ) | |||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||
Net investment (gains) losses, net(1) |
35 | (86 | ) | (51 | ) | (41 | ) | 6 | 9 | (9 | ) | (35 | ) | |||||||||||||||||||
Expenses related to restructuring |
(1 | ) | 4 | 3 | | | | | | |||||||||||||||||||||||
Taxes on adjustments |
(7 | ) | 17 | 10 | 9 | (2 | ) | (2 | ) | 2 | 7 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
ADJUSTED OPERATING INCOME (LOSS) |
$ | 66 | $ | (5 | ) | $ | 61 | $ | (425 | ) | $ | (3) | $ | 57 | $ | (5) | $ | (376 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(1) Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below: |
|
|||||||||||||||||||||||||||||||
Net investment (gains) losses, gross |
$ | 36 | $ | (84 | ) | $ | (48 | ) | $ | (38 | ) | $ | 7 | $ | 10 | $ | (8 | ) | $ | (29 | ) | |||||||||||
Adjustment for DAC and other intangible amortization and certain benefit reserves |
(1 | ) | (2 | ) | (3 | ) | (3 | ) | (1 | ) | (1 | ) | (1 | ) | (6 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net investment (gains) losses, net |
$ | 35 | $ | (86 | ) | $ | (51 | ) | $ | (41 | ) | $ | 6 | $ | 9 | $ | (9 | ) | $ | (35 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Adjusted Operating Income (Loss)U.S. Life Insurance SegmentLong-Term Care Insurance
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||
Premiums |
$ | 640 | $ | 628 | $ | 1,268 | $ | 650 | $ | 648 | $ | 632 | $ | 631 | $ | 2,561 | ||||||||||||||||
Net investment income |
428 | 406 | 834 | 398 | 397 | 399 | 382 | 1,576 | ||||||||||||||||||||||||
Net investment gains (losses) |
(15 | ) | 80 | 65 | 46 | 4 | 3 | 6 | 59 | |||||||||||||||||||||||
Policy fees and other income |
2 | | 2 | | (1 | ) | 1 | 1 | 1 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenues |
1,055 | 1,114 | 2,169 | 1,094 | 1,048 | 1,035 | 1,020 | 4,197 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
896 | 927 | 1,823 | 1,311 | 944 | 874 | 928 | 4,057 | ||||||||||||||||||||||||
Interest credited |
| | | | | | | | ||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
93 | 101 | 194 | 105 | 99 | 101 | 93 | 398 | ||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
26 | 25 | 51 | 25 | 24 | 22 | 27 | 98 | ||||||||||||||||||||||||
Interest expense |
| | | | | | | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total benefits and expenses |
1,015 | 1,053 | 2,068 | 1,441 | 1,067 | 997 | 1,048 | 4,553 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
40 | 61 | 101 | (347 | ) | (19 | ) | 38 | (28 | ) | (356 | ) | ||||||||||||||||||||
Provision (benefit) for income taxes |
15 | 19 | 34 | (69 | ) | 1 | 14 | (1 | ) | (55 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
NET INCOME (LOSS) |
25 | 42 | 67 | (278 | ) | (20 | ) | 24 | (27 | ) | (301 | ) | ||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||
Net investment (gains) losses |
15 | (80 | ) | (65 | ) | (46 | ) | (4 | ) | (3 | ) | (6 | ) | (59 | ) | |||||||||||||||||
Expenses related to restructuring |
(1 | ) | 2 | 1 | | | | | | |||||||||||||||||||||||
Taxes on adjustments |
(2 | ) | 16 | 14 | 10 | | 1 | 1 | 12 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
ADJUSTED OPERATING INCOME (LOSS) |
$ | 37 | $ | (20 | ) | $ | 17 | $ | (314 | ) | $ | (24 | ) | $ | 22 | $ | (32 | ) | $ | (348 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
RATIOS: |
||||||||||||||||||||||||||||||||
Loss Ratio(1) |
74 | % | 81 | % | 78 | % | 138 | % | 83 | % | 75 | % | 84 | % | 95 | % | ||||||||||||||||
Gross Benefits Ratio(2) |
140 | % | 148 | % | 144 | % | 202 | % | 146 | % | 138 | % | 147 | % | 158 | % |
(1) | The loss ratio 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 was calculated by dividing benefits and other changes in policy reserves by net earned premiums. |
35
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Adjusted Operating Income (Loss)U.S. Life Insurance SegmentLife Insurance
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||
Premiums |
$ | 73 | $ | 81 | $ | 154 | $ | 66 | $ | 69 | $ | 80 | $ | 91 | $ | 306 | ||||||||||||||||
Net investment income |
130 | 133 | 263 | 127 | 128 | 125 | 124 | 504 | ||||||||||||||||||||||||
Net investment gains (losses) |
(3 | ) | 10 | 7 | (5 | ) | (4 | ) | (2 | ) | 5 | (6 | ) | |||||||||||||||||||
Policy fees and other income |
182 | 148 | 330 | 151 | 152 | 164 | 159 | 626 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenues |
382 | 372 | 754 | 339 | 345 | 367 | 379 | 1,430 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
244 | 242 | 486 | 367 | 239 | 225 | 247 | 1,078 | ||||||||||||||||||||||||
Interest credited |
58 | 58 | 116 | 61 | 59 | 60 | 61 | 241 | ||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
37 | 34 | 71 | 35 | 33 | 33 | 35 | 136 | ||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
28 | 27 | 55 | 14 | 16 | 42 | 29 | 101 | ||||||||||||||||||||||||
Interest expense |
4 | 5 | 9 | 4 | 4 | 4 | 4 | 16 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total benefits and expenses |
371 | 366 | 737 | 481 | 351 | 364 | 376 | 1,572 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
11 | 6 | 17 | (142 | ) | (6 | ) | 3 | 3 | (142 | ) | |||||||||||||||||||||
Provision (benefit) for income taxes |
3 | 1 | 4 | (30 | ) | (1 | ) | 1 | | (30 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
NET INCOME (LOSS) |
8 | 5 | 13 | (112 | ) | (5 | ) | 2 | 3 | (112 | ) | |||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||
Net investment (gains) losses |
3 | (10 | ) | (7 | ) | 5 | 4 | 2 | (5 | ) | 6 | |||||||||||||||||||||
Expenses related to restructuring |
| 1 | 1 | | | | | | ||||||||||||||||||||||||
Taxes on adjustments |
(1 | ) | 2 | 1 | (1 | ) | (1 | ) | | 1 | (1 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
ADJUSTED OPERATING INCOME (LOSS) |
$ | 10 | $ | (2 | ) | $ | 8 | $ | (108 | ) | $ | (2 | ) | $ | 4 | $ | (1 | ) | $ | (107 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
36
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Adjusted Operating Income (Loss)U.S. Life Insurance SegmentFixed Annuities
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||
Premiums |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Net investment income |
166 | 162 | 328 | 165 | 171 | 183 | 182 | 701 | ||||||||||||||||||||||||
Net investment gains (losses) |
(18 | ) | (6 | ) | (24 | ) | (3 | ) | (7 | ) | (11 | ) | (3 | ) | (24 | ) | ||||||||||||||||
Policy fees and other income |
3 | 3 | 6 | 3 | 4 | 4 | 3 | 14 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenues |
151 | 159 | 310 | 165 | 168 | 176 | 182 | 691 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
71 | 67 | 138 | 89 | 65 | 64 | 63 | 281 | ||||||||||||||||||||||||
Interest credited |
48 | 48 | 96 | 52 | 54 | 56 | 58 | 220 | ||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
12 | 13 | 25 | 13 | 12 | 12 | 13 | 50 | ||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
13 | 14 | 27 | 16 | 13 | 14 | 15 | 58 | ||||||||||||||||||||||||
Interest expense |
| | | | | | | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total benefits and expenses |
144 | 142 | 286 | 170 | 144 | 146 | 149 | 609 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
7 | 17 | 24 | (5 | ) | 24 | 30 | 33 | 82 | |||||||||||||||||||||||
Provision (benefit) for income taxes |
1 | 4 | 5 | (2 | ) | 6 | 6 | 7 | 17 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
NET INCOME (LOSS) |
6 | 13 | 19 | (3 | ) | 18 | 24 | 26 | 65 | |||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||
Net investment (gains) losses, net(1) |
17 | 4 | 21 | | 6 | 10 | 2 | 18 | ||||||||||||||||||||||||
Expenses related to restructuring |
| 1 | 1 | | | | | | ||||||||||||||||||||||||
Taxes on adjustments |
(4 | ) | (1 | ) | (5 | ) | | (1 | ) | (3 | ) | | (4 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
ADJUSTED OPERATING INCOME (LOSS) |
$ | 19 | $ | 17 | $ | 36 | $ | (3 | ) | $ | 23 | $ | 31 | $ | 28 | $ | 79 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(1) Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below: |
|
|||||||||||||||||||||||||||||||
Net investment (gains) losses, gross |
$ | 18 | $ | 6 | $ | 24 | $ | 3 | $ | 7 | $ | 11 | $ | 3 | $ | 24 | ||||||||||||||||
Adjustment for DAC and other intangible amortization and certain benefit reserves |
(1 | ) | (2 | ) | (3 | ) | (3 | ) | (1 | ) | (1 | ) | (1 | ) | (6 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net investment (gains) losses, net |
$ | 17 | $ | 4 | $ | 21 | $ | | $ | 6 | $ | 10 | $ | 2 | $ | 18 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
Runoff Segment
38
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Adjusted Operating Income (Loss)Runoff Segment
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||
Net investment income |
$ | 47 | $ | 47 | $ | 94 | $ | 45 | $ | 44 | $ | 43 | $ | 42 | $ | 174 | ||||||||||||||||
Net investment gains (losses) |
(4 | ) | | (4 | ) | (15 | ) | (3 | ) | (1 | ) | (14 | ) | (33 | ) | |||||||||||||||||
Policy fees and other income |
35 | 35 | 70 | 37 | 38 | 38 | 40 | 153 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenues |
78 | 82 | 160 | 67 | 79 | 80 | 68 | 294 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
13 | 1 | 14 | 17 | 7 | 7 | 8 | 39 | ||||||||||||||||||||||||
Interest credited |
40 | 41 | 81 | 39 | 38 | 36 | 37 | 150 | ||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
13 | 13 | 26 | 14 | 14 | 14 | 15 | 57 | ||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
4 | 2 | 6 | 13 | 5 | 8 | 7 | 33 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total benefits and expenses |
70 | 57 | 127 | 83 | 64 | 65 | 67 | 279 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
8 | 25 | 33 | (16 | ) | 15 | 15 | 1 | 15 | |||||||||||||||||||||||
Provision (benefit) for income taxes |
1 | 5 | 6 | (3 | ) | 2 | 3 | | 2 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
NET INCOME (LOSS) |
7 | 20 | 27 | (13 | ) | 13 | 12 | 1 | 13 | |||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||
Net investment (gains) losses, net(1) |
2 | | 2 | 13 | 1 | 1 | 12 | 27 | ||||||||||||||||||||||||
Taxes on adjustments |
| | | (2 | ) | | | (3 | ) | (5 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
ADJUSTED OPERATING INCOME (LOSS) |
$ | 9 | $ | 20 | $ | 29 | $ | (2 | ) | $ | 14 | $ | 13 | $ | 10 | $ | 35 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
(1) Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below: |
| |||||||||||||||||||||||||||||||
Net investment (gains) losses, gross |
$ | 4 | $ | | $ | 4 | $ | 15 | $ | 3 | $ | 1 | $ | 14 | $ | 33 | ||||||||||||||||
Adjustment for DAC and other intangible amortization and certain benefit reserves |
(2 | ) | | (2 | ) | (2 | ) | (2 | ) | | (2 | ) | (6 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net investment (gains) losses, net |
$ | 2 | $ | | $ | 2 | $ | 13 | $ | 1 | $ | 1 | $ | 12 | $ | 27 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39
Corporate and Other
40
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Adjusted Operating LossCorporate and Other(1)
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||
Premiums |
$ | 2 | $ | 2 | $ | 4 | $ | 2 | $ | 1 | $ | 3 | $ | 2 | $ | 8 | ||||||||||||||||
Net investment income |
3 | 3 | 6 | 3 | 1 | 3 | 2 | 9 | ||||||||||||||||||||||||
Net investment gains (losses) |
(7 | ) | (21 | ) | (28 | ) | 18 | (7 | ) | | (1 | ) | 10 | |||||||||||||||||||
Policy fees and other income |
| 1 | 1 | (1 | ) | (1 | ) | 1 | (2 | ) | (3 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenues | (2) | (15) | (17) | 22 | (6) | 7 | 1 | 24 | ||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
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Benefits and other changes in policy reserves |
1 | 1 | 2 | 2 | 1 | 1 | 1 | 5 | ||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
9 | 7 | 16 | 18 | 12 | 11 | 11 | 52 | ||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
| | | | | | 1 | 1 | ||||||||||||||||||||||||
Interest expense |
62 | 61 | 123 | 63 | 61 | 67 | 65 | 256 | ||||||||||||||||||||||||
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Total benefits and expenses | 72 | 69 | 141 | 83 | 74 | 79 | 78 | 314 | ||||||||||||||||||||||||
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LOSS BEFORE INCOME TAXES |
(74 | ) | (84 | ) | (158 | ) | (61 | ) | (80 | ) | (72 | ) | (77 | ) | (290 | ) | ||||||||||||||||
Provision (benefit) for income taxes |
5 | 5 | 10 | (17 | ) | (28 | ) | 3 | (17 | ) | (59 | ) | ||||||||||||||||||||
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NET LOSS |
(79 | ) | (89 | ) | (168 | ) | (44 | ) | (52 | ) | (75 | ) | (60 | ) | (231 | ) | ||||||||||||||||
ADJUSTMENTS TO NET LOSS: |
||||||||||||||||||||||||||||||||
Net investment (gains) losses |
7 | 21 | 28 | (18 | ) | 7 | | 1 | (10 | ) | ||||||||||||||||||||||
Expenses related to restructuring |
1 | | 1 | | 2 | | | 2 | ||||||||||||||||||||||||
Fees associated with bond consent solicitation |
| | | 6 | | | | 6 | ||||||||||||||||||||||||
Taxes on adjustments |
(1 | ) | (5 | ) | (6 | ) | 2 | (2 | ) | | | | ||||||||||||||||||||
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ADJUSTED OPERATING LOSS |
$ | (72 | ) | $ | (73 | ) | $ | (145 | ) | $ | (54 | ) | $ | (45 | ) | $ | (75 | ) | $ | (59 | ) | $ | (233 | ) | ||||||||
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(1) | Includes inter-segment eliminations and the results of other businesses that are managed outside the operating segments, including certain smaller international mortgage insurance businesses. |
41
Additional Financial Data
42
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Investments Summary
(amounts in millions)
June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | ||||||||||||||||||||||||||||||||||||||
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 |
$ | 35,114 | 45 | % | $ | 33,634 | 45 | % | $ | 32,630 | 45 | % | $ | 32,496 | 45 | % | $ | 32,813 | 45 | % | ||||||||||||||||||||||
Private fixed maturity securities |
14,501 | 19 | 13,838 | 19 | 13,000 | 18 | 12,628 | 17 | 12,362 | 17 | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities(1) |
2,697 | 4 | 2,908 | 4 | 2,998 | 4 | 3,178 | 5 | 3,522 | 5 | ||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities |
2,970 | 4 | 2,943 | 4 | 3,007 | 4 | 3,146 | 4 | 3,340 | 5 | ||||||||||||||||||||||||||||||||
Other asset-backed securities |
3,698 | 5 | 3,405 | 5 | 3,414 | 5 | 3,044 | 4 | 2,950 | 4 | ||||||||||||||||||||||||||||||||
State and political subdivisions |
2,636 | 3 | 2,546 | 3 | 2,552 | 4 | 2,795 | 4 | 2,855 | 4 | ||||||||||||||||||||||||||||||||
Non-investment grade fixed maturity securities |
2,158 | 3 | 2,086 | 3 | 2,060 | 3 | 2,117 | 3 | 2,190 | 3 | ||||||||||||||||||||||||||||||||
Equity securities: |
||||||||||||||||||||||||||||||||||||||||||
Common stocks and mutual funds |
111 | | 103 | | 141 | | 171 | | 164 | | ||||||||||||||||||||||||||||||||
Preferred stocks |
533 | 1 | 532 | 1 | 514 | 1 | 612 | 1 | 594 | 1 | ||||||||||||||||||||||||||||||||
Commercial mortgage loans |
6,963 | 9 | 6,929 | 9 | 6,687 | 9 | 6,568 | 9 | 6,480 | 9 | ||||||||||||||||||||||||||||||||
Restricted commercial mortgage loans related to a securitization entity |
56 | | 59 | | 62 | | 87 | | 90 | | ||||||||||||||||||||||||||||||||
Policy loans |
2,076 | 3 | 1,994 | 3 | 1,861 | 3 | 1,859 | 3 | 1,872 | 3 | ||||||||||||||||||||||||||||||||
Cash, cash equivalents, restricted cash and short-term investments |
2,211 | 3 | 2,360 | 3 | 2,407 | 3 | 2,864 | 4 | 2,951 | 4 | ||||||||||||||||||||||||||||||||
Securities lending |
113 | | 106 | | 103 | | 166 | | 211 | | ||||||||||||||||||||||||||||||||
Other invested assets: |
Limited partnerships |
512 | 1 | 462 | 1 | 409 | 1 | 372 | 1 | 335 | | |||||||||||||||||||||||||||||||
Derivatives:(2) |
||||||||||||||||||||||||||||||||||||||||||
Long-term care (LTC) forward starting swapcash flow |
144 | | 59 | | 42 | | 36 | | 49 | | ||||||||||||||||||||||||||||||||
Other cash flow |
5 | | 3 | | 6 | | 2 | | 2 | | ||||||||||||||||||||||||||||||||
Equity index optionsnon-qualified |
65 | | 60 | | 39 | | 80 | | 70 | | ||||||||||||||||||||||||||||||||
Other non-qualified |
66 | | 65 | | 91 | | 127 | | 109 | | ||||||||||||||||||||||||||||||||
Other |
357 | | 314 | | 268 | | 212 | | 166 | | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total invested assets and cash |
$ | 76,986 | 100 | % | $ | 74,406 | 100 | % | $ | 72,291 | 100 | % | $ | 72,560 | 100 | % | $ | 73,125 | 100 | % | ||||||||||||||||||||||
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Public Fixed Maturity SecuritiesCredit Quality: |
||||||||||||||||||||||||||||||||||||||||||
NRSRO(3) Designation |
||||||||||||||||||||||||||||||||||||||||||
AAA |
$ | 10,856 | 24 | % | $ | 10,778 | 25 | % | $ | 10,799 | 26 | % | $ | 11,642 | 28 | % | $ | 12,269 | 29 | % | ||||||||||||||||||||||
AA |
4,202 | 10 | 4,084 | 10 | 4,117 | 10 | 4,358 | 10 | 4,428 | 10 | ||||||||||||||||||||||||||||||||
A |
12,555 | 29 | 12,301 | 29 | 12,005 | 29 | 11,984 | 28 | 12,174 | 28 | ||||||||||||||||||||||||||||||||
BBB |
15,171 | 34 | 14,240 | 33 | 13,669 | 32 | 12,994 | 31 | 12,929 | 30 | ||||||||||||||||||||||||||||||||
BB |
1,128 | 3 | 1,081 | 3 | 1,149 | 3 | 1,156 | 3 | 1,221 | 3 | ||||||||||||||||||||||||||||||||
B |
76 | | 76 | | 93 | | 130 | | 123 | | ||||||||||||||||||||||||||||||||
CCC and lower |
25 | | 25 | | 25 | | 27 | | 31 | | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total public fixed maturity securities |
$ | 44,013 | 100 | % | $ | 42,585 | 100 | % | $ | 41,857 | 100 | % | $ | 42,291 | 100 | % | $ | 43,175 | 100 | % | ||||||||||||||||||||||
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Private Fixed Maturity SecuritiesCredit Quality: |
||||||||||||||||||||||||||||||||||||||||||
NRSRO(3) Designation |
||||||||||||||||||||||||||||||||||||||||||
AAA |
$ | 2,726 | 14 | % | $ | 2,545 | 14 | % | $ | 2,540 | 14 | % | $ | 2,109 | 12 | % | $ | 2,045 | 12 | % | ||||||||||||||||||||||
AA |
2,507 | 13 | 2,364 | 13 | 2,198 | 13 | 2,224 | 13 | 2,156 | 13 | ||||||||||||||||||||||||||||||||
A |
5,496 | 28 | 5,228 | 28 | 4,866 | 27 | 4,695 | 27 | 4,750 | 28 | ||||||||||||||||||||||||||||||||
BBB |
8,103 | 41 | 7,734 | 41 | 7,407 | 42 | 7,281 | 43 | 7,091 | 42 | ||||||||||||||||||||||||||||||||
BB |
869 | 4 | 843 | 4 | 737 | 4 | 724 | 4 | 733 | 4 | ||||||||||||||||||||||||||||||||
B |
58 | | 59 | | 54 | | 78 | 1 | 80 | 1 | ||||||||||||||||||||||||||||||||
CCC and lower |
2 | | 2 | | 2 | | 2 | | 2 | | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total private fixed maturity securities |
$ | 19,761 | 100 | % | $ | 18,775 | 100 | % | $ | 17,804 | 100 | % | $ | 17,113 | 100 | % | $ | 16,857 | 100 | % | ||||||||||||||||||||||
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(1) | The company does not have any material exposure to residential mortgage-backed securities collateralized debt obligations (CDOs). |
(2) | Certain derivative balances have been reclassified as of June 30, 2018 to conform to the current period presentation. |
(3) | Nationally Recognized Statistical Rating Organizations. |
43
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Fixed Maturity Securities Summary
(amounts in millions)
June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | ||||||||||||||||||||||||||||||||||||
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 |
$ | 4,987 | 8 | % | $ | 4,731 | 8 | % | $ | 4,631 | 8 | % | $ | 5,181 | 9 | % | $ | 5,353 | 9 | % | ||||||||||||||||||||
State and political subdivisions |
2,636 | 4 | 2,546 | 4 | 2,552 | 4 | 2,795 | 5 | 2,855 | 5 | ||||||||||||||||||||||||||||||
Foreign government |
2,649 | 4 | 2,518 | 4 | 2,393 | 4 | 2,289 | 4 | 2,380 | 4 | ||||||||||||||||||||||||||||||
U.S. corporate |
31,401 | 49 | 29,941 | 49 | 28,762 | 48 | 27,538 | 46 | 27,569 | 46 | ||||||||||||||||||||||||||||||
Foreign corporate |
12,647 | 20 | 12,286 | 20 | 11,837 | 20 | 12,173 | 20 | 12,002 | 20 | ||||||||||||||||||||||||||||||
Residential mortgage-backed securities |
2,738 | 4 | 2,950 | 5 | 3,044 | 5 | 3,222 | 6 | 3,567 | 6 | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities |
2,989 | 5 | 2,962 | 5 | 3,016 | 5 | 3,156 | 5 | 3,349 | 5 | ||||||||||||||||||||||||||||||
Other asset-backed securities |
3,727 | 6 | 3,426 | 5 | 3,426 | 6 | 3,050 | 5 | 2,957 | 5 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total fixed maturity securities |
$ | 63,774 | 100 | % | $ | 61,360 | 100 | % | $ | 59,661 | 100 | % | $ | 59,404 | 100 | % | $ | 60,032 | 100 | % | ||||||||||||||||||||
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|||||||||||||||||||||
Corporate Bond HoldingsIndustry Sector: |
||||||||||||||||||||||||||||||||||||||||
Investment Grade: |
||||||||||||||||||||||||||||||||||||||||
Finance and insurance |
$ | 10,009 | 23 | % | $ | 9,605 | 22 | % | $ | 9,062 | 22 | % | $ | 8,712 | 22 | % | $ | 8,616 | 22 | % | ||||||||||||||||||||
Utilities |
5,944 | 13 | 5,718 | 14 | 5,665 | 14 | 5,674 | 14 | 5,785 | 15 | ||||||||||||||||||||||||||||||
Energy |
3,898 | 9 | 3,757 | 9 | 3,449 | 8 | 3,358 | 8 | 3,310 | 8 | ||||||||||||||||||||||||||||||
Consumernon-cyclical |
6,107 | 14 | 5,798 | 14 | 5,595 | 14 | 5,232 | 13 | 5,042 | 13 | ||||||||||||||||||||||||||||||
Consumercyclical |
2,055 | 5 | 1,950 | 5 | 1,900 | 5 | 1,887 | 5 | 1,875 | 5 | ||||||||||||||||||||||||||||||
Capital goods |
3,158 | 7 | 3,005 | 7 | 2,876 | 7 | 2,788 | 7 | 2,815 | 7 | ||||||||||||||||||||||||||||||
Industrial |
2,142 | 5 | 2,029 | 5 | 1,957 | 5 | 1,899 | 5 | 2,028 | 5 | ||||||||||||||||||||||||||||||
Technology and communications |
3,964 | 9 | 3,720 | 9 | 3,582 | 9 | 3,424 | 9 | 3,346 | 8 | ||||||||||||||||||||||||||||||
Transportation |
2,244 | 5 | 2,164 | 5 | 2,017 | 5 | 1,945 | 5 | 1,973 | 5 | ||||||||||||||||||||||||||||||
Other |
2,571 | 6 | 2,602 | 6 | 2,625 | 6 | 2,879 | 7 | 2,836 | 7 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Subtotal |
42,092 | 96 | 40,348 | 96 | 38,728 | 95 | 37,798 | 95 | 37,626 | 95 | ||||||||||||||||||||||||||||||
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Non-Investment Grade: |
||||||||||||||||||||||||||||||||||||||||
Finance and insurance |
216 | 1 | 200 | | 183 | | 177 | | 196 | | ||||||||||||||||||||||||||||||
Utilities |
100 | | 94 | | 51 | | 57 | | 56 | | ||||||||||||||||||||||||||||||
Energy |
331 | 1 | 308 | 1 | 339 | 1 | 357 | 1 | 359 | 1 | ||||||||||||||||||||||||||||||
Consumernon-cyclical |
155 | | 168 | 1 | 192 | 1 | 193 | 1 | 201 | 1 | ||||||||||||||||||||||||||||||
Consumercyclical |
243 | 1 | 237 | 1 | 217 | 1 | 220 | 1 | 220 | 1 | ||||||||||||||||||||||||||||||
Capital goods |
157 | | 146 | | 130 | | 154 | | 157 | | ||||||||||||||||||||||||||||||
Industrial |
211 | | 193 | | 226 | 1 | 219 | 1 | 232 | 1 | ||||||||||||||||||||||||||||||
Technology and communications |
465 | 1 | 452 | 1 | 438 | 1 | 448 | 1 | 442 | 1 | ||||||||||||||||||||||||||||||
Transportation |
8 | | 13 | | 23 | | 13 | | 6 | | ||||||||||||||||||||||||||||||
Other |
70 | | 68 | | 72 | | 75 | | 76 | | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Subtotal |
1,956 | 4 | 1,879 | 4 | 1,871 | 5 | 1,913 | 5 | 1,945 | 5 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total |
$ | 44,048 | 100 | % | $ | 42,227 | 100 | % | $ | 40,599 | 100 | % | $ | 39,711 | 100 | % | $ | 39,571 | 100 | % | ||||||||||||||||||||
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|||||||||||||||||||||
Fixed Maturity SecuritiesContractual Maturity Dates: |
||||||||||||||||||||||||||||||||||||||||
Due in one year or less |
$ | 1,973 | 3 | % | $ | 2,021 | 3 | % | $ | 1,874 | 3 | % | $ | 1,719 | 3 | % | $ | 1,701 | 3 | % | ||||||||||||||||||||
Due after one year through five years |
11,602 | 18 | 11,105 | 18 | 10,952 | 18 | 10,987 | 18 | 11,149 | 19 | ||||||||||||||||||||||||||||||
Due after five years through ten years |
13,197 | 21 | 12,770 | 21 | 12,463 | 21 | 12,531 | 21 | 12,601 | 21 | ||||||||||||||||||||||||||||||
Due after ten years |
27,548 | 43 | 26,126 | 43 | 24,886 | 42 | 24,739 | 42 | 24,708 | 41 | ||||||||||||||||||||||||||||||
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Subtotal |
54,320 | 85 | 52,022 | 85 | 50,175 | 84 | 49,976 | 84 | 50,159 | 84 | ||||||||||||||||||||||||||||||
Mortgage and asset-backed securities |
9,454 | 15 | 9,338 | 15 | 9,486 | 16 | 9,428 | 16 | 9,873 | 16 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total fixed maturity securities |
$ | 63,774 | 100 | % | $ | 61,360 | 100 | % | $ | 59,661 | 100 | % | $ | 59,404 | 100 | % | $ | 60,032 | 100 | % | ||||||||||||||||||||
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44
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
General Account U.S. GAAP Net Investment Income Yields
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
U.S. GAAP Net Investment Income |
||||||||||||||||||||||||||||||||
Fixed maturity securitiestaxable |
$ | 665 | $ | 643 | $ | 1,308 | $ | 648 | $ | 643 | $ | 651 | $ | 635 | $ | 2,577 | ||||||||||||||||
Fixed maturity securitiesnon-taxable |
2 | 2 | 4 | 2 | 3 | 3 | 3 | 11 | ||||||||||||||||||||||||
Commercial mortgage loans |
84 | 81 | 165 | 80 | 81 | 77 | 82 | 320 | ||||||||||||||||||||||||
Restricted commercial mortgage loans related to a securitization entity |
1 | 1 | 2 | 2 | 1 | 2 | 2 | 7 | ||||||||||||||||||||||||
Equity securities |
10 | 9 | 19 | 9 | 11 | 10 | 10 | 40 | ||||||||||||||||||||||||
Other invested assets |
47 | 44 | 91 | 49 | 41 | 42 | 37 | 169 | ||||||||||||||||||||||||
Limited partnerships |
12 | 15 | 27 | (4 | ) | 3 | 11 | 2 | 12 | |||||||||||||||||||||||
Policy loans |
45 | 46 | 91 | 44 | 41 | 41 | 43 | 169 | ||||||||||||||||||||||||
Cash, cash equivalents, restricted cash and short-term investments |
11 | 12 | 23 | 12 | 13 | 14 | 12 | 51 | ||||||||||||||||||||||||
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|||||||||||||||||
Gross investment income before expenses and fees |
877 | 853 | 1,730 | 842 | 837 | 851 | 826 | 3,356 | ||||||||||||||||||||||||
Expenses and fees |
(25 | ) | (24 | ) | (49 | ) | (27 | ) | (22 | ) | (23 | ) | (22 | ) | (94 | ) | ||||||||||||||||
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|||||||||||||||||
Net investment income |
$ | 852 | $ | 829 | $ | 1,681 | $ | 815 | $ | 815 | $ | 828 | $ | 804 | $ | 3,262 | ||||||||||||||||
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Annualized Yields |
||||||||||||||||||||||||||||||||
Fixed maturity securitiestaxable |
4.6 | % | 4.5 | % | 4.5 | % | 4.5 | % | 4.5 | % | 4.5 | % | 4.4 | % | 4.5 | % | ||||||||||||||||
Fixed maturity securitiesnon-taxable |
6.1 | % | 6.1 | % | 6.1 | % | 3.7 | % | 3.9 | % | 3.8 | % | 3.7 | % | 4.0 | % | ||||||||||||||||
Commercial mortgage loans |
4.8 | % | 4.8 | % | 4.8 | % | 4.8 | % | 5.0 | % | 4.8 | % | 5.2 | % | 4.9 | % | ||||||||||||||||
Restricted commercial mortgage loans related to a securitization entity |
7.0 | % | 6.7 | % | 6.8 | % | 10.8 | % | 4.5 | % | 8.4 | % | 7.8 | % | 7.9 | % | ||||||||||||||||
Equity securities |
6.3 | % | 5.6 | % | 5.9 | % | 5.0 | % | 5.7 | % | 5.1 | % | 5.1 | % | 5.3 | % | ||||||||||||||||
Other invested assets(1) |
56.1 | % | 65.7 | % | 61.1 | % | 99.0 | % | 107.9 | % | 150.0 | % | 129.8 | % | 111.9 | % | ||||||||||||||||
Limited partnerships(2) |
9.9 | % | 13.8 | % | 11.7 | % | (4.1 | )% | 3.4 | % | 13.8 | % | 2.9 | % | 3.6 | % | ||||||||||||||||
Policy loans |
8.8 | % | 9.5 | % | 9.2 | % | 9.5 | % | 8.8 | % | 9.0 | % | 9.6 | % | 9.2 | % | ||||||||||||||||
Cash, cash equivalents, restricted cash and short-term investments |
1.9 | % | 2.0 | % | 2.0 | % | 1.8 | % | 1.8 | % | 1.7 | % | 1.3 | % | 1.6 | % | ||||||||||||||||
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Gross investment income before expenses and fees |
5.0 | % | 4.8 | % | 4.9 | % | 4.8 | % | 4.8 | % | 4.8 | % | 4.8 | % | 4.8 | % | ||||||||||||||||
Expenses and fees |
(0.2 | )% | (0.1 | )% | (0.1 | )% | (0.2 | )% | (0.2 | )% | (0.1 | )% | (0.2 | )% | (0.2 | )% | ||||||||||||||||
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Net investment income |
4.8 | % | 4.7 | % | 4.8 | % | 4.6 | % | 4.6 | % | 4.7 | % | 4.6 | % | 4.6 | % | ||||||||||||||||
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Yields are based on net investment income as reported under U.S. GAAP and are consistent with how the company measures its investment performance for management purposes. Yields are annualized, for interim periods, and are calculated as net investment income as a percentage of average quarterly asset carrying values except for fixed maturity securities, derivatives and derivative counterparty collateral, which exclude unrealized fair value adjustments and securities lending activity, which is included in other invested assets and is calculated net of the corresponding securities lending liability. See page 49 herein for average invested assets and cash used in the yield calculation.
(1) | Investment income for other invested assets includes amortization of terminated cash flow hedges, which have no corresponding book value within the yield calculation. |
(2) | Limited partnership investments are primarily equity-based and do not have fixed returns by period. |
45
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Net Investment Gains (Losses), NetDetail
(amounts in millions)
2019 | 2018 | |||||||||||||||||||||||||||||||
2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
Net realized gains (losses) on available-for-sale securities: |
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Fixed maturity securities: |
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U.S. corporate |
$ | (15 | ) | $ | 30 | $ | 15 | $ | 10 | $ | (6 | ) | $ | (7 | ) | $ | (3 | ) | $ | (6 | ) | |||||||||||
U.S. government, agencies and government-sponsored enterprises |
2 | 33 | 35 | 54 | 1 | | | 55 | ||||||||||||||||||||||||
Foreign corporate |
(1 | ) | (1 | ) | (2 | ) | (6 | ) | | (2 | ) | (3 | ) | (11 | ) | |||||||||||||||||
Foreign government |
11 | 1 | 12 | (4 | ) | (2 | ) | | | (6 | ) | |||||||||||||||||||||
State and political subdivisions |
| | | (1 | ) | | | | (1 | ) | ||||||||||||||||||||||
Mortgage-backed securities |
1 | (2 | ) | (1 | ) | (5 | ) | (2 | ) | 2 | (2 | ) | (7 | ) | ||||||||||||||||||
Asset-backed securities |
| (1 | ) | (1 | ) | | | (1 | ) | | (1 | ) | ||||||||||||||||||||
Foreign exchange |
1 | (1 | ) | | 2 | 1 | | (1 | ) | 2 | ||||||||||||||||||||||
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Total net realized gains (losses) on available-for-sale securities |
(1 | ) | 59 | 58 | 50 | (8 | ) | (8 | ) | (9 | ) | 25 | ||||||||||||||||||||
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Net realized gains (losses) on equity securities sold |
| 3 | 3 | 1 | | 8 | 2 | 11 | ||||||||||||||||||||||||
Net unrealized gains (losses) on equity securities still held |
(12 | ) | 8 | (4 | ) | (83 | ) | | 3 | (18 | ) | (98 | ) | |||||||||||||||||||
Limited partnerships |
(11 | ) | 15 | 4 | 3 | 3 | (2 | ) | 7 | 11 | ||||||||||||||||||||||
Commercial mortgage loans |
1 | (1 | ) | | | | | | | |||||||||||||||||||||||
Derivative instruments |
(22 | ) | (10 | ) | (32 | ) | (85 | ) | 18 | (15 | ) | (13 | ) | (95 | ) | |||||||||||||||||
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Net investment gains (losses), gross |
(45 | ) | 74 | 29 | (114 | ) | 13 | (14 | ) | (31 | ) | (146 | ) | |||||||||||||||||||
Adjustment for DAC and other intangible amortization and certain benefit reserves |
3 | 2 | 5 | 5 | 3 | 1 | 3 | 12 | ||||||||||||||||||||||||
Adjustment for net investment (gains) losses attributable to noncontrolling interests |
(1 | ) | (5 | ) | (6 | ) | 67 | (13 | ) | 1 | 11 | 66 | ||||||||||||||||||||
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Net investment gains (losses), net |
$ | (43 | ) | $ | 71 | $ | 28 | $ | (42 | ) | $ | 3 | $ | (12 | ) | $ | (17 | ) | $ | (68 | ) | |||||||||||
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46
Reconciliations of Non-GAAP Measures
47
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Reconciliation of Operating ROE
(amounts in millions)
Twelve Month Rolling Average ROE |
Twelve months ended | |||||||||||||||||||
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
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U.S. GAAP Basis ROE |
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Net income available to Genworth Financial, Inc.s common stockholders for the twelve months ended(1) |
$ | 159 | $ | 181 | $ | 119 | $ | 801 | $ | 762 | ||||||||||
Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income(2) |
$ | 10,609 | $ | 10,539 | $ | 10,500 | $ | 10,426 | $ | 10,264 | ||||||||||
U.S. GAAP Basis ROE(1)/(2) |
1.5 | % | 1.7 | % | 1.1 | % | 7.7 | % | 7.4 | % | ||||||||||
Operating ROE |
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Adjusted operating income for the twelve months ended(1) |
$ | 179 | $ | 175 | $ | 179 | $ | 796 | $ | 727 | ||||||||||
Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income(2) |
$ | 10,609 | $ | 10,539 | $ | 10,500 | $ | 10,426 | $ | 10,264 | ||||||||||
Operating ROE(1)/(2) |
1.7 | % | 1.7 | % | 1.7 | % | 7.6 | % | 7.1 | % | ||||||||||
Quarterly Average ROE |
Three months ended | |||||||||||||||||||
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
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U.S. GAAP Basis ROE |
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Net income (loss) available to Genworth Financial, Inc.s common stockholders for the period ended(3) |
$ | 168 | $ | 174 | $ | (329 | ) | $ | 146 | $ | 190 | |||||||||
Quarterly average Genworth Financial, Inc.s stockholders equity for the period, excluding accumulated other comprehensive income(4) |
$ | 10,663 | $ | 10,494 | $ | 10,569 | $ | 10,657 | $ | 10,487 | ||||||||||
Annualized U.S. GAAP Quarterly Basis ROE(3)/(4) |
6.3 | % | 6.6 | % | (12.5 | )% | 5.5 | % | 7.2 | % | ||||||||||
Operating ROE |
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Adjusted operating income (loss) for the period ended(3) |
$ | 204 | $ | 121 | $ | (291 | ) | $ | 145 | $ | 200 | |||||||||
Quarterly average Genworth Financial, Inc.s stockholders equity for the period, excluding accumulated other comprehensive income(4) |
$ | 10,663 | $ | 10,494 | $ | 10,569 | $ | 10,657 | $ | 10,487 | ||||||||||
Annualized Operating Quarterly Basis ROE(3)/(4) |
7.7 | % | 4.6 | % | (11.0 | )% | 5.4 | % | 7.6 | % |
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 adjusted 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 is not a substitute for net income (loss) available to Genworth Financial, Inc.s common stockholders divided by average ending Genworth Financial, Inc.s stockholders equity determined in accordance with U.S. GAAP.
(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 adjusted operating income (loss) from page 9 herein. |
(2) | Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income, is derived by averaging ending Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income, for the most recent five quarters. |
(3) | Net income (loss) available to Genworth Financial, Inc.s common stockholders and adjusted operating income (loss) from page 9 herein. |
(4) | Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income, is derived by averaging ending Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income. |
48
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Reconciliation of Core Yield
2019 | 2018 | |||||||||||||||||||||||||||||||||
(Assetsamounts in billions) | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | ||||||||||||||||||||||||||
ReportedTotal Invested Assets and Cash | $ | 77.0 | $ | 74.4 | $ | 77.0 | $ | 72.3 | $ | 72.6 | $ | 73.1 | $ | 74.6 | $ | 72.3 | ||||||||||||||||||
Subtract: | ||||||||||||||||||||||||||||||||||
Securities lending |
0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.2 | 0.2 | 0.1 | ||||||||||||||||||||||||||
Unrealized gains (losses) |
5.9 | 3.8 | 5.9 | 1.9 | 2.2 | 2.7 | 3.7 | 1.9 | ||||||||||||||||||||||||||
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Adjusted end of period invested assets and cash | $ | 71.0 | $ | 70.5 | $ | 71.0 | $ | 70.3 | $ | 70.2 | $ | 70.2 | $ | 70.7 | $ | 70.3 | ||||||||||||||||||
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(A) |
Average Invested Assets and Cash Used in Reported Yield Calculation | $ | 70.8 | $ | 70.4 | $ | 70.6 | $ | 70.2 | $ | 70.2 | $ | 70.4 | $ | 70.7 | $ | 70.4 | |||||||||||||||||
Subtract: | ||||||||||||||||||||||||||||||||||
Restricted commercial mortgage loans related to a securitization entity(1) |
| 0.1 | | | | | 0.1 | | ||||||||||||||||||||||||||
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(B) |
Average Invested Assets and Cash Used in Core Yield Calculation | $ | 70.8 | $ | 70.3 | $ | 70.6 | $ | 70.2 | $ | 70.2 | $ | 70.4 | $ | 70.6 | $ | 70.4 | |||||||||||||||||
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(C) |
ReportedNet Investment Income |
$ | 852 | $ | 829 | $ | 1,681 | $ | 815 | $ | 815 | $ | 828 | $ | 804 | $ | 3,262 | |||||||||||||||||
Subtract: | ||||||||||||||||||||||||||||||||||
Bond calls and commercial mortgage loan prepayments |
7 | 6 | 13 | 8 | 8 | 9 | 11 | 36 | ||||||||||||||||||||||||||
Other non-core items(2) |
7 | 2 | 9 | 2 | 1 | 2 | (2 | ) | 3 | |||||||||||||||||||||||||
Restricted commercial mortgage loans related to a securitization entity(1) |
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(D) |
Core Net Investment Income |
$ | 838 | $ | 821 | $ | 1,659 | $ | 804 | $ | 805 | $ | 817 | $ | 794 | $ | 3,220 | |||||||||||||||||
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(C) / (A) |
Reported Yield |
4.82 | % | 4.71 | % | 4.76 | % | 4.64 | % | 4.64 | % | 4.70 | % | 4.55 | % | 4.63 | % | |||||||||||||||||
(D) / (B) |
Core Yield |
4.74 | % | 4.67 | % | 4.70 | % | 4.58 | % | 4.59 | % | 4.64 | % | 4.50 | % | 4.58 | % |
Note: Yields have 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 items that do not reflect the underlying performance of the investment portfolio. Management believes that analysis of core yield enhances understanding of the investment yield of the company. However, core yield is not a substitute for investment yield determined in accordance with U.S. GAAP.
(1) | Represents the incremental assets and investment income related to restricted commercial mortgage loans. |
(2) | Includes cost basis adjustments on structured securities and various other immaterial items. |
49
Corporate Information
50
FINANCIAL SUPPLEMENT
SECOND QUARTER 2019
Financial Strength Ratings As Of July 29, 2019
Company |
Standard & Poors Financial Services LLC (S&P) |
Moodys Investors Service, Inc. (Moodys) |
A.M. Best Company, Inc. (A.M. Best) | |||
Genworth Mortgage Insurance Corporation |
BB+ (Marginal) | Baa3 (Adequate) | N/A | |||
Genworth Financial Mortgage Insurance Company Canada(1) |
A+ (Strong) | N/A | N/A | |||
Genworth Financial Mortgage Insurance Pty Limited (Australia)(2) |
A (Strong) | N/A | N/A | |||
Genworth Life Insurance Company |
B- (Weak) | B3 (Poor) | B- (Fair) | |||
Genworth Life and Annuity Insurance Company |
B- (Weak) | B1 (Poor) | B+ (Good) | |||
Genworth Life Insurance Company of New York |
B- (Weak) | B3 (Poor) | B- (Fair) |
The S&P, Moodys, A.M. Best, Dominion Bond Rating Service (DBRS) and Fitch Rating Service (Fitch) ratings included 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.
S&P states that an insurer rated A (Strong) has strong financial security characteristics that outweigh any vulnerabilities and is highly likely to have the ability to meet financial commitments. Insurers rated A (Strong), BB (Marginal) or B (Weak) have strong, marginal or weak financial security characteristics, respectively. The A, BB and B ranges are the third-, fifth- and sixth-highest of nine financial strength rating ranges assigned by S&P, which range from AAA to R. A plus (+) or minus (-) shows relative standing 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+, A, BB+ and B- ratings are the fifth-, sixth-, eleventh- and sixteenth-highest of S&Ps 21 ratings categories.
Moodys states that insurance companies rated Baa (Adequate) offer adequate financial security and those rated B (Poor) offer questionable financial security. The Baa (Adequate) and B (Poor) ranges are the fourth- and sixth-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 Baa3, B1 and B3 ratings are the tenth-, fourteenth- and sixteenth-highest, respectively, of Moodys 21 ratings categories.
A.M. Best states that its B+ (Good) rating is assigned to companies that have, in its opinion, a good ability to meet their ongoing insurance obligations while B- (Fair) is assigned to those companies that have, in its opinion, a fair ability to meet their ongoing insurance obligations. The B+ (Good) and B- (Fair) ratings are the sixth- and eighth-highest of 15 ratings assigned by A.M. Best, which range from A++ to F.
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.
The Australian mortgage insurance subsidiary also solicits a rating from Fitch. 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 nine 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 B category. Accordingly, the A+ rating is the fifth-highest of Fitchs 21 ratings categories.
The company also solicits a rating from HR Ratings on a local scale for Genworth Seguros de Credito a la Vivienda S.A. de C.V., its Mexican mortgage insurance subsidiary, with a short-term rating of HR1 and long-term rating of HR AA. For short-term ratings, HR Ratings states that HR1 rated companies are viewed as exhibiting high capacity for timely payment of debt obligations in the short-term and maintain low credit risk. The HR1 short-term rating category is the highest of six short-term rating categories, which range from HR1 to HR D. For long-term ratings, HR Ratings states that HR AA rated companies are viewed as having high credit quality and offer high safety for timely payment of debt obligations and maintain low credit risk under adverse economic scenarios. The HR AA long-term rating is the second-highest of HR Ratings eight long-term rating categories, which range from HR AAA to HR D.
S&P, Moodys, A.M. Best, DBRS, Fitch and HR Ratings review their ratings periodically and the company cannot assure you that it will maintain the current ratings in the future. These and other agencies may also rate the company or its insurance subsidiaries on a solicited or an unsolicited basis.
(1) | Genworth Financial Mortgage Insurance Company Canada is also rated AA by DBRS. |
(2) | Genworth Financial Mortgage Insurance Pty Limited (Australia) is also rated A+ by Fitch. |
51