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Exhibit 99.2                

 

 


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Table of Contents

   Page  

Investor Letter

     3  

Use of Non-GAAP Measures

     4  

Results of Operations and Selected Operating Performance Measures

     5  

Financial Highlights

     6  

Consolidated Quarterly Results

  

Consolidated Net Income by Quarter

     8  

Reconciliation of Net Income to Adjusted Operating Income

     9  

Consolidated Balance Sheets

     10-11  

Consolidated Balance Sheets by Segment

     12-13  

Deferred Acquisition Costs (DAC) Rollforward

     14  

Quarterly Results by Business

  

Adjusted Operating Income and Sales—Enact Segment

     16-21  

Adjusted Operating Income (Loss)—U.S. Life Insurance Segment

     23-26  

Adjusted Operating Income—Runoff Segment

     28  

Adjusted Operating Income (Loss)—Corporate and Other Activities

     30  

Additional Financial Data

  

Investments Summary

     32  

Fixed Maturity Securities Summary

     33  

General Account U.S. GAAP Net Investment Income Yields

     34  

Net Investment Gains (Losses), Net—Detail

     35  

Reconciliations of Non-GAAP Measures

  

Reconciliation of Operating Return On Equity (ROE)

     37  

Reconciliation of Consolidated Expense Ratio

     38  

Reconciliation of Reported Yield to Core Yield

     39  

Note:

Unless otherwise stated, all references in this financial supplement to income (loss) from continuing operations, income (loss) from continuing operations per share, 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 income (loss) from continuing operations available to Genworth Financial, Inc.’s common stockholders, income (loss) from continuing operations available to Genworth Financial, Inc.’s common stockholders per share, 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


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Dear Investor,

Thank you for your continued interest in Genworth Financial, Inc.

Please see the accompanying press release and summary presentation posted to the company’s website at http://investor.genworth.com for additional information regarding its third quarter 2022 earnings results.

Investors are encouraged to listen to the company’s earnings call on third quarter 2022 results at 9:00 a.m. (ET) on November 2, 2022.

Regards,

Sarah E. Crews, Investor Relations

InvestorInfo@genworth.com

 

3


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Use of Non-GAAP Measures

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) from continuing operations attributable to noncontrolling interests, net investment gains (losses), gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions, restructuring costs and infrequent or unusual non-operating items. Initial 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 initial gains (losses) on reinsurance restructuring for certain blocks of business. The company excludes net investment gains (losses) and infrequent or unusual non-operating items because the company does not consider them to be related to the operating performance of the company’s segments and Corporate and Other activities. A component of the company’s net investment gains (losses) is the result of estimated future credit losses, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to the company’s discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions and restructuring costs are also excluded from adjusted operating income (loss) because, in the company’s opinion, they are not indicative of overall operating trends. Infrequent or unusual non-operating items are also excluded from adjusted operating income (loss) if, in the company’s opinion, they are not indicative of overall operating trends.

While some of these items may be significant components of net income (loss) available to Genworth Financial, Inc.’s common stockholders in accordance with U.S. GAAP, the company believes that adjusted operating income (loss) and measures that are derived from or incorporate adjusted operating income (loss), including adjusted operating income (loss) per share on a basic and diluted basis, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses adjusted operating income (loss) as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. However, the items excluded from adjusted operating income (loss) have occurred in the past and could, and in some cases will, recur in the future. Adjusted operating income (loss) and adjusted operating income (loss) per share on a basic and diluted basis are not substitutes for net income (loss) available to Genworth Financial, Inc.’s common stockholders or net income (loss) available to Genworth Financial, Inc.’s common stockholders per share on a basic and diluted basis determined in accordance with U.S. GAAP. In addition, the company’s definition of adjusted operating income (loss) may differ from the definitions used by other companies.

Adjustments to reconcile net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) assume a 21% tax rate and are net of the portion attributable to noncontrolling interests. Net investment gains (losses) are also adjusted for DAC and other intangible amortization and certain benefit reserves (see page 35).

In the third quarter of 2022, the company paid a pre-tax make-whole premium of $2 million and wrote off $1 million of bond consent fees and deferred borrowing costs related to the early redemption of Genworth Holdings, Inc.’s (Genworth Holdings) senior notes originally scheduled to mature in February 2024. In the second and first quarters of 2022, the company repurchased $48 million and $82 million, respectively, principal amount of Genworth Holdings, Inc.’s senior notes due in February 2024 for a pre-tax loss of $1 million and $3 million, respectively. In the fourth and third quarters of 2021, the company paid a pre-tax make-whole premium of $20 million and $6 million, respectively, related to the early redemption of Genworth Holdings’ senior notes originally scheduled to mature in August 2023 and September 2021, respectively. In the fourth quarter of 2021, the company also repurchased $209 million principal amount of Genworth Holdings’ senior notes with 2023 and 2024 maturity dates for a pre-tax loss of $15 million. In the first quarter of 2021, the company repurchased $146 million principal amount of Genworth Holdings’ senior notes due in September 2021 for a pre-tax loss of $4 million. These transactions were excluded from adjusted operating income as they relate to gains (losses) on the early extinguishment of debt.

In the fourth quarter of 2021, the company recorded a pre-tax loss of $92 million as a result of ceding certain term life insurance policies as part of a life block transaction.

The company recorded a pre-tax expense of $1 million in the second quarter of 2022, and $5 million, $3 million, $5 million and $21 million in the fourth, third, second and first quarters of 2021, respectively, related to restructuring costs as it continues to evaluate and appropriately size its organizational needs and expenses.

In the third quarter of 2022, the company incurred $6 million of pre-tax pension plan termination costs related to one of its defined benefit pension plans. There were no other infrequent or unusual items excluded from adjusted operating income (loss) during the periods presented.

The table on page 9 of this financial supplement provides a reconciliation of net income available to Genworth Financial, Inc.’s common stockholders to adjusted operating income 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 37 to 39 of this financial supplement.

 

4


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Results of Operations and Selected Operating Performance Measures

The company’s 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 available to Genworth Financial, Inc.’s common stockholders to adjusted operating income 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 businesses at the U.S. corporate federal income tax rate of 21%. Each segment is then adjusted to reflect the unique tax attributes of that segment, such as permanent differences between U.S. GAAP and tax law. The difference between the consolidated provision for income taxes and the sum of the provision for income taxes in each segment is reflected in Corporate and Other activities.

The annually-determined tax rates and adjustments to each segment’s provision for income taxes are estimates which are subject to review and could change from year to year.

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 products included in the company’s Enact segment. The company considers new insurance written to be a measure of the operating performance of its Enact segment because it represents a measure of new sales of insurance policies during a specified period, rather than a measure of revenues or profitability during that period.

Management regularly monitors and reports insurance in-force and risk in-force for the company’s Enact segment. Insurance in-force is a measure of the aggregate unpaid principal balance as of the respective reporting date for loans insured by the company’s U.S. mortgage insurance subsidiaries. Risk in-force is based on the coverage percentage applied to the estimated current outstanding loan balance. The company considers insurance in-force and risk in-force to be measures of the operating performance of its Enact segment because they represent measures of the size of its business at a specific date which will generate revenues and profits in a future period, rather than measures of its revenues or profitability during that period.

Management also regularly monitors and reports a loss ratio for the company’s businesses. For the mortgage insurance businesses included in the company’s Enact segment, the loss ratio is the ratio of benefits and other changes in policy reserves to net earned premiums. For the long-term care insurance business included in the company’s U.S. Life Insurance segment, the loss ratio is the ratio of benefits and other changes in reserves less tabular interest on reserves less loss adjustment expenses to net earned premiums. The company considers the loss ratio to be a measure of underwriting performance in these businesses and helps to enhance the understanding of the operating performance of the businesses.

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

THIRD QUARTER 2022

 

Financial Highlights

(amounts in millions, except per share data)

 

Balance Sheet Data

   September 30,
        2022        
    June 30,
        2022        
    March 31,
        2022        
    December 31,
        2021        
    September 30,
        2021        
 

Total Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss)

   $ 12,056     $ 11,965     $ 11,797     $ 11,649     $ 11,476  

Total accumulated other comprehensive income (loss)

     (2,765     (145     2,610       3,861       3,800  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

   $ 9,291     $ 11,820     $ 14,407     $ 15,510     $ 15,276  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Book value per share

   $ 18.49     $ 23.28     $ 28.23     $ 30.57     $ 30.11  

Book value per share, excluding accumulated other comprehensive income (loss)

   $ 23.99     $ 23.56     $ 23.12     $ 22.96     $ 22.62  

Common shares outstanding as of the balance sheet date

     502.6       507.8       510.3       507.4       507.4  
     Twelve months ended  

Twelve Month Rolling Average ROE

   September 30,
2022
    June 30,
2022
    March 31,
2022
    December 31,
2021
    September 30,
2021
 

U.S. GAAP Basis ROE

     5.1     6.9     7.6     8.0     9.1

Operating ROE(1)

     5.3     6.1     6.3     6.8     7.1
     Three months ended  

Quarterly Average ROE

   September 30,
2022
    June 30,
2022
    March 31,
2022
    December 31,
2021
    September 30,
2021
 

U.S. GAAP Basis ROE

     3.5     6.1     5.1     5.6     11.0

Operating ROE(1)

     5.3     5.9     4.5     5.7     8.4
  

Basic and Diluted Shares

   Three months ended
September 30, 2022
    Nine months ended
September 30, 2022
                   

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

     504.0       507.1        

Potentially dilutive securities:

          

Stock options, restricted stock units and other equity-based awards

     5.4       6.6        
  

 

 

   

 

 

       

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

     509.4       513.7        
  

 

 

   

 

 

       

 

(1) 

See page 37 herein for a reconciliation of U.S. GAAP Basis ROE to Operating ROE.

 

6


Consolidated Quarterly Results

  

 

 

 

7


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Consolidated Net Income by Quarter

(amounts in millions, except per share amounts)

 

     2022     2021  
     3Q      2Q     1Q     Total     4Q     3Q      2Q     1Q      Total  

REVENUES:

                       

Premiums

   $ 934      $ 927     $ 931     $ 2,792     $ 576     $ 944      $ 947     $ 968      $ 3,435  

Net investment income

     808        787       764       2,359       866       859        844       801        3,370  

Net investment gains (losses)

     (69      8       28       (33     132       88        70       33        323  

Policy fees and other income

     166        159       169       494       162       179        180       183        704  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total revenues

     1,839        1,881       1,892       5,612       1,736       2,070        2,041       1,985        7,832  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

BENEFITS AND EXPENSES:

                       

Benefits and other changes in policy reserves

     1,180        764       1,139       3,083       861       1,143        1,161       1,218        4,383  

Interest credited

     128        125       125       378       127       123        127       131        508  

Acquisition and operating expenses, net of deferrals

     240        589       271       1,100       354       290        304       275        1,223  

Amortization of deferred acquisition costs and intangibles

     79        84       92       255       108       106        86       77        377  

Interest expense

     26        26       26       78       31       35        43       51        160  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total benefits and expenses

     1,653        1,588       1,653       4,894       1,481       1,697        1,721       1,752        6,651  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     186        293       239       718       255       373        320       233        1,181  

Provision for income taxes

     52        73       58       183       62       67        75       59        263  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

INCOME FROM CONTINUING OPERATIONS

     134        220       181       535       193       306        245       174        918  

Income (loss) from discontinued operations, net of taxes(1)

     5        (1     (2     2       (1     12        (5     21        27  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

NET INCOME

     139        219       179       537       192       318        240       195        945  

Less: net income from continuing operations attributable to noncontrolling interests

     35        38       30       103       29       4        —         —          33  

Less: net income from discontinued operations attributable to noncontrolling interests

     —          —         —         —         —         —          —         8        8  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS

   $ 104      $ 181     $ 149     $ 434     $ 163     $ 314      $ 240     $ 187      $ 904  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:

                       

Income from continuing operations available to Genworth Financial, Inc.’s common stockholders

   $ 99      $ 182     $ 151     $ 432     $ 164     $ 302      $ 245     $ 174      $ 885  

Income (loss) from discontinued operations available to Genworth Financial, Inc.’s common stockholders

     5        (1     (2     2       (1     12        (5     13        19  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS

   $ 104      $ 181     $ 149     $ 434     $ 163     $ 314      $ 240     $ 187      $ 904  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
                           

Earnings Per Share Data:

                     

Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share

                     

Basic

   $ 0.20      $ 0.36     $ 0.30     $ 0.85     $ 0.32     $ 0.59      $ 0.48     $ 0.35      $ 1.75  

Diluted

   $ 0.19      $ 0.36     $ 0.29     $ 0.84     $ 0.32     $ 0.59      $ 0.47     $ 0.34      $ 1.72  

Net income available to Genworth Financial, Inc.’s common stockholders per share

                     

Basic

   $ 0.21      $ 0.36     $ 0.29     $ 0.86     $ 0.32     $ 0.62      $ 0.47     $ 0.37      $ 1.78  

Diluted

   $ 0.20      $ 0.35     $ 0.29     $ 0.85     $ 0.32     $ 0.61      $ 0.47     $ 0.37      $ 1.76  

Weighted-average common shares outstanding

                     

Basic

     504.0        509.0       508.3       507.1       507.4       507.4        507.0       506.0        506.9  

Diluted

     509.4        514.2       517.4       513.7       515.6       514.2        515.0       513.8        514.7  

 

(1) 

Income (loss) from discontinued operations relates to the company’s former lifestyle protection insurance business that was sold on December 1, 2015 and its former Australia mortgage insurance business that was sold on March 3, 2021.

 

8


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Reconciliation of Net Income to Adjusted Operating Income

(amounts in millions, except per share amounts)

 

     2022     2021  
     3Q      2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS

   $ 104      $ 181     $ 149     $ 434     $ 163     $ 314     $ 240     $ 187     $ 904  

Add: net income from continuing operations attributable to noncontrolling interests

     35        38       30       103       29       4       —         —         33  

Add: net income from discontinued operations attributable to noncontrolling interests

     —          —         —         —         —         —         —         8       8  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME

     139        219       179       537       192       318       240       195       945  

Less: income (loss) from discontinued operations, net of taxes

     5        (1     (2     2       (1     12       (5     21       27  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS

     134        220       181       535       193       306       245       174       918  

Less: net income from continuing operations attributable to noncontrolling interests

     35        38       30       103       29       4       —         —         33  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS

     99        182       151       432       164       302       245       174       885  
 

ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:

                     

Net investment (gains) losses, net(1)

     67        (10     (28     29       (133     (88     (70     (33     (324

(Gains) losses on early extinguishment of debt

     3        1       3       7       35       6       —         4       45  

Initial loss from life block transaction

     —          —         —         —         92       —         —         —         92  

Expenses related to restructuring

     —          1       —         1       5       3       5       21       34  

Pension plan termination costs

     6        —         —         6       —         —         —         —         —    

Taxes on adjustments

     (16      2       5       (9     1       16       14       2       33  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 159      $ 176     $ 131     $ 466     $ 164     $ 239     $ 194     $ 168     $ 765  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS):

                     

Enact segment

   $ 156      $ 167     $ 135     $ 458     $ 125     $ 134     $ 135     $ 126     $ 520  

U.S. Life Insurance segment:

                     

Long-Term Care Insurance

     25        34       59       118       119       133       98       95       445  

Life Insurance

     (33      (34     (79     (146     (98     (68     (40     (63     (269

Fixed Annuities

     19        21       16       56       20       28       13       30       91  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total U.S. Life Insurance segment

     11        21       (4     28       41       93       71       62       267  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Runoff segment

     9        2       9       20       16       11       15       12       54  

Corporate and Other

     (17      (14     (9     (40     (18     1       (27     (32     (76
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 159      $ 176     $ 131     $ 466     $ 164     $ 239     $ 194     $ 168     $ 765  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

Earnings Per Share Data:

                   

Net income available to Genworth Financial, Inc.’s common stockholders per share

                   

Basic

   $ 0.21      $ 0.36     $ 0.29     $ 0.86     $ 0.32     $ 0.62     $ 0.47     $ 0.37     $ 1.78  

Diluted

   $ 0.20      $ 0.35     $ 0.29     $ 0.85     $ 0.32     $ 0.61     $ 0.47     $ 0.37     $ 1.76  

Adjusted operating income per share

                   

Basic

   $ 0.32      $ 0.35     $ 0.26     $ 0.92     $ 0.32     $ 0.47     $ 0.38     $ 0.33     $ 1.51  

Diluted

   $ 0.31      $ 0.34     $ 0.25     $ 0.91     $ 0.32     $ 0.46     $ 0.38     $ 0.33     $ 1.48  

Weighted-average common shares outstanding

                   

Basic

     504.0        509.0       508.3       507.1       507.4       507.4       507.0       506.0       506.9  

Diluted

     509.4        514.2       517.4       513.7       515.6       514.2       515.0       513.8       514.7  

 

(1) 

Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves (see page 35 for reconciliation).

 

9


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Consolidated Balance Sheets

(amounts in millions)

 

     September 30,
2022
     June 30,
2022
    March 31,
2022
    December 31,
2021
    September 30,
2021
 

ASSETS

             

Investments:

             

Fixed maturity securities available-for-sale, at fair value(1)

   $ 46,215      $ 49,286     $ 55,027     $ 60,480     $ 61,274  

Equity securities, at fair value

     274        243       230       198       156  

Commercial mortgage loans(2)

     7,086        7,088       6,938       6,856       6,916  

Less: Allowance for credit losses

     (23      (23     (25     (26     (30
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Commercial mortgage loans, net

     7,063        7,065       6,913       6,830       6,886  

Policy loans

     2,153        2,178       2,028       2,050       2,067  

Limited partnerships

     2,195        2,123       2,007       1,900       1,617  

Other invested assets

     590        573       671       820       718  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total investments

     58,490        61,468       66,876       72,278       72,718  

Cash, cash equivalents and restricted cash

     1,561        1,724       1,291       1,571       1,937  

Accrued investment income

     616        553       696       647       626  

Deferred acquisition costs

     2,247        2,314       1,310       1,146       1,193  

Intangible assets

     237        236       159       143       147  

Reinsurance recoverable

     16,619        16,691       16,821       16,868       16,722  

Less: Allowance for credit losses

     (61      (60     (57     (55     (51
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Reinsurance recoverable, net

     16,558        16,631       16,764       16,813       16,671  

Other assets

     399        412       440       388       396  

Deferred tax asset

     1,533        1,047       421       119       209  

Separate account assets

     4,298        4,683       5,530       6,066       5,978  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 85,939      $ 89,068     $ 93,487     $ 99,171     $ 99,875  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
                 

 

(1)

Amortized cost of $51,248 million, $51,248 million, $52,280 million, $52,611 million and $53,181 million as of September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively, and allowance for credit losses of $— as of September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021.

(2)

Net of unamortized balance of loan origination fees and costs of $4 million as of September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021.

 

10


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Consolidated Balance Sheets

(amounts in millions)

 

     September 30,
2022
     June 30,
2022
    March 31,
2022
    December 31,
2021
    September 30,
2021
 

LIABILITIES AND EQUITY

             

Liabilities:

             

Future policy benefits

   $ 38,095      $ 38,133     $ 38,897     $ 41,528     $ 41,794  

Policyholder account balances

     17,589        17,907       18,197       19,354       19,607  

Liability for policy and contract claims

     12,004        11,915       11,833       11,841       11,743  

Unearned premiums

     597        614       639       672       685  

Other liabilities

     1,679        1,468       1,416       1,511       1,568  

Long-term borrowings

     1,622        1,773       1,819       1,899       2,412  

Separate account liabilities

     4,298        4,683       5,530       6,066       5,978  

Liabilities related to discontinued operations(1)

     6        4       4       34       36  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     75,890        76,497       78,335       82,905       83,823  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Equity:

             

Common stock

     1        1       1       1       1  

Additional paid-in capital

     11,865        11,859       11,857       11,858       11,850  

Accumulated other comprehensive income (loss)(2)

     (2,765      (145     2,610       3,861       3,800  

Retained earnings

     2,924        2,820       2,639       2,490       2,325  

Treasury stock, at cost

     (2,734      (2,715     (2,700     (2,700     (2,700
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

     9,291        11,820       14,407       15,510       15,276  

Noncontrolling interests

     758        751       745       756       776  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     10,049        12,571       15,152       16,266       16,052  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 85,939      $ 89,068     $ 93,487     $ 99,171     $ 99,875  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
                 

 

(1)

Liabilities related to discontinued operations relates to a liability recorded in connection with a settlement agreement reached with AXA and other unrelated liabilities involving the sale of the company’s former lifestyle protection insurance business.

(2)

Accumulated other comprehensive income (loss) decreased primarily from an increase in interest rates in the second and third quarters of 2022.

 

11


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Consolidated Balance Sheet by Segment

(amounts in millions)

 

     September 30, 2022  
     Enact     U.S. Life
Insurance
    Runoff     Corporate
and
Other
(1)
    Total  

ASSETS

          

Cash and investments

   $ 5,466     $ 51,435     $ 2,786     $ 980     $ 60,667  

Deferred acquisition costs and intangible assets

     34       2,310       133       7       2,484  

Reinsurance recoverable, net

     —         15,922       636       —         16,558  

Deferred tax and other assets

     225       1,223       33       451       1,932  

Separate account assets

     —         —         4,298       —         4,298  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 5,725     $ 70,890     $ 7,886     $ 1,438     $ 85,939  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

          

Liabilities:

          

Future policy benefits

   $ —       $ 38,093     $ 2     $ —       $ 38,095  

Policyholder account balances

     —         14,515       3,074       —         17,589  

Liability for policy and contract claims

     510       11,467       21       6       12,004  

Unearned premiums

     213       381       3       —         597  

Other liabilities

     129       1,012       43       495       1,679  

Borrowings

     742       —         —         880       1,622  

Separate account liabilities

     —         —         4,298       —         4,298  

Liabilities related to discontinued operations

     —         —         —         6       6  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     1,594       65,468       7,441       1,387       75,890  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity:

          

Allocated equity, excluding accumulated other comprehensive income (loss)

     3,722       7,289       461       584       12,056  

Allocated accumulated other comprehensive income (loss)

     (349     (1,867     (16     (533     (2,765
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

     3,373       5,422       445       51       9,291  

Noncontrolling interests

     758       —         —         —         758  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     4,131       5,422       445       51       10,049  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 5,725     $ 70,890     $ 7,886     $ 1,438     $ 85,939  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) 

Includes inter-segment eliminations and other businesses that are managed outside the operating segments.

 

12


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Consolidated Balance Sheet by Segment

(amounts in millions)

 

     June 30, 2022  
     Enact     U.S. Life
Insurance
     Runoff     Corporate
and
Other
(1)
    Total  

ASSETS

           

Cash and investments

   $ 5,539     $ 54,314      $ 2,751     $ 1,141     $ 63,745  

Deferred acquisition costs and intangible assets

     35       2,374        133       8       2,550  

Reinsurance recoverable, net

     —         15,984        647       —         16,631  

Deferred tax and other assets

     189       616        50       604       1,459  

Separate account assets

     —         —          4,683       —         4,683  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total assets

   $ 5,763     $ 73,288      $ 8,264     $ 1,753     $ 89,068  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

           

Liabilities:

           

Future policy benefits

   $ —       $ 38,132      $ 1     $ —       $ 38,133  

Policyholder account balances

     —         14,825        3,082       —         17,907  

Liability for policy and contract claims

     559       11,335        14       7       11,915  

Unearned premiums

     225       386        3       —         614  

Other liabilities

     144       847        42       435       1,468  

Borrowings

     742       —          —         1,031       1,773  

Separate account liabilities

     —         —          4,683       —         4,683  

Liabilities related to discontinued operations

     —         —          —         4       4  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities

     1,670       65,525        7,825       1,477       76,497  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Equity:

           

Allocated equity, excluding accumulated other comprehensive income (loss)

     3,582       7,329        446       608       11,965  

Allocated accumulated other comprehensive income (loss)

     (240     434        (7     (332     (145
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

     3,342       7,763        439       276       11,820  

Noncontrolling interests

     751       —          —         —         751  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total equity

     4,093       7,763        439       276       12,571  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 5,763     $ 73,288      $ 8,264     $ 1,753     $ 89,068  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

(1) 

Includes inter-segment eliminations and other businesses that are managed outside the operating segments.

 

13


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Deferred Acquisition Costs Rollforward

(amounts in millions)

 

     Enact     U.S. Life
Insurance
    Runoff     Total  

Unamortized balance as of June 30, 2022

   $ 27     $ 2,143     $ 117     $ 2,287  

Costs deferred

     1       (2     —         (1

Amortization, net of interest accretion

     (2     (67     (6     (75
  

 

 

   

 

 

   

 

 

   

 

 

 

Unamortized balance as of September 30, 2022

     26       2,074       111       2,211  

Effect of accumulated net unrealized investment (gains) losses

     —         15       21       36  
  

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of September 30, 2022

   $ 26     $ 2,089     $ 132     $ 2,247  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

14


 

Enact Segment

                      

 

 

 

15


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Adjusted Operating Income and Sales—Enact Segment

(amounts in millions)

 

     2022     2021  
     3Q      2Q     1Q     Total     4Q      3Q     2Q     1Q     Total  

REVENUES:

                      

Premiums

   $ 235      $ 238     $ 234     $ 707     $ 237      $ 243     $ 243     $ 252     $ 975  

Net investment income

     39        36       35       110       35        36       35       35       141  

Net investment gains (losses)

     —           (1     —          (1     —           1       (2     (1     (2

Policy fees and other income

     1        —          1       2       1        1       —          2       4  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     275        273       270       818       273        281       276       288       1,118  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                      

Benefits and other changes in policy reserves

     (40      (62     (10     (112     6        34       30       55       125  

Acquisition and operating expenses, net of deferrals

     55        58       54       167       55        55       63       57       230  

Amortization of deferred acquisition costs and intangibles

     4        3       3       10       4        3       4       4       15  

Interest expense

     12        13       13       38       13        13       12       13       51  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     31        12       60       103       78        105       109       129       421  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     244        261       210       715       195        176       167       159       697  

Provision for income taxes

     53        57       45       155       41        38       35       34       148  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS

     191        204       165       560       154        138       132       125       549  

Less: net income from continuing operations attributable to noncontrolling interests

     35        38       30       103       29        4       —          —          33  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS

     156        166       135       457       125        134       132       125       516  

ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:

                      

Net investment (gains) losses

     —           1       —          1       —           (1     2       1       2  

Expenses related to restructuring

     —           —          —          —          —           1       2       —          3  

Taxes on adjustments

     —           —          —          —          —           —          (1     —          (1
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 156      $ 167     $ 135     $ 458     $ 125      $ 134     $ 135     $ 126     $ 520  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
                          

SALES:

                    

Primary New Insurance Written (NIW)

   $ 15,069      $ 17,448     $ 18,823     $ 51,340     $ 21,441      $ 23,972     $ 26,657     $ 24,934     $ 97,004  
                          

 

16


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Primary New Insurance Written Metrics—Enact Segment

(amounts in millions)

 

     2022     2021  
     3Q      2Q     1Q     4Q     3Q     2Q     1Q  
     Primary
NIW
     % of
Primary
NIW
     Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
 

Payment Type

                                      

Monthly

   $ 14,138        94    $ 16,169        93   $ 17,071        91   $ 19,395        91   $ 21,475        90   $ 24,887        93   $ 23,358        94

Single

     890        6        1,218        7       1,690        9       1,991        9       2,431        10       1,686        7       1,446        6  

Other(1)

     41        —          61        —         62        —         55        —         66        —         84        —         130        —    
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 15,069        100    $ 17,448        100   $ 18,823        100   $ 21,441        100   $ 23,972        100   $ 26,657        100   $ 24,934        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Origination

                                      

Purchase

   $ 14,634        97    $ 16,802        96   $ 17,326        92   $ 19,284        90   $ 20,988        88   $ 21,143        79   $ 15,500        62

Refinance

     435        3        646        4       1,497        8       2,157        10       2,984        12       5,514        21       9,434        38  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 15,069        100    $ 17,448        100   $ 18,823        100   $ 21,441        100   $ 23,972        100   $ 26,657        100   $ 24,934        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

FICO Scores

                                      

Over 760

   $ 6,948        46    $ 7,981        45   $ 8,359        45   $ 9,401        44   $ 10,708        45   $ 11,762        44   $ 10,520        42

740 - 759

     2,554        17        2,916        17       3,085        16       3,406        16       3,830        16       3,995        15       3,836        15  

720 - 739

     2,106        14        2,530        15       2,515        13       2,844        13       3,177        13       3,467        13       3,423        14  

700 - 719

     1,531        10        1,917        11       1,952        10       2,257        11       2,702        11       3,131        12       2,979        12  

680 - 699

     1,085        7        1,099        6       1,316        7       1,589        7       1,875        8       2,513        9       2,480        10  

660 - 679(2)

     527        3        598        3       931        5       1,106        5       1,010        4       1,068        4       983        4  

640 - 659

     234        2        297        2       486        3       611        3       504        2       547        2       511        2  

620 - 639

     79        1        106        1       173        1       223        1       166        1       174        1       202        1  

<620

     5        —          4        —         6        —         4        —         —           —         —           —         —           —    
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 15,069        100    $ 17,448        100   $ 18,823        100   $ 21,441        100   $ 23,972        100   $ 26,657        100   $ 24,934        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Loan-To-Value Ratio

                                      

95.01% and above

   $ 1,741        11    $ 2,177        12   $ 3,146        17   $ 3,660        17   $ 3,396        14   $ 2,767        11   $ 2,241        9

90.01% to 95.00%

     6,184        41        7,458        43       6,682        35       7,548        35       8,838        37       10,758        40       9,453        38  

85.01% to 90.00%

     5,094        34        5,207        30       5,620        30       6,253        29       7,454        31       8,618        32       8,392        34  

85.00% and below

     2,050        14        2,606        15       3,375        18       3,980        19       4,284        18       4,514        17       4,848        19  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 15,069        100    $ 17,448        100   $ 18,823        100   $ 21,441        100   $ 23,972        100   $ 26,657        100   $ 24,934        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Debt-To-Income Ratio

                                      

45.01% and above

   $ 3,728        25    $ 4,067        23   $ 4,452        24   $ 4,977        23   $ 4,167        17   $ 3,269        12   $ 2,566        10

38.01% to 45.00%

     5,681        38        6,436        37       6,361        34       7,047        33       7,949        33       9,204        35       8,746        35  

38.00% and below

     5,660        37        6,945        40       8,010        42       9,417        44       11,856        50       14,184        53       13,622        55  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 15,069        100    $ 17,448        100   $ 18,823        100   $ 21,441        100   $ 23,972        100   $ 26,657        100   $ 24,934        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
                                                

 

(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

THIRD QUARTER 2022

Other Metrics—Enact Segment

(dollar amounts in millions)

 

    2022     2021  
    3Q      2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  
 

Primary Insurance In-Force(1)

  $ 241,813      $ 237,563     $ 231,853       $ 226,514     $ 222,464     $ 217,477     $ 210,187    
 

Risk In-Force

                    

Primary(2)

  $ 61,124      $ 59,911     $ 58,295       $ 56,881     $ 55,866     $ 54,643     $ 52,866    

Pool

    84        89       97         105       117       123       134    
 

 

 

    

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total Risk In-Force

  $ 61,208      $ 60,000     $ 58,392       $ 56,986     $ 55,983     $ 54,766     $ 53,000    
 

 

 

    

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   
 

Expense Ratio(3)

    25      26     24     25     25     24     27     24     25
 

Primary Persistency

    82      80     76     79     69     65     63     56     62
 

Combined Risk To Capital Ratio(4)

    12.3:1        12.6:1       12.0:1         12.2:1       11.8:1       11.8:1       11.7:1    
 

EMICO Risk To Capital Ratio(4),(5)

    12.3:1        12.6:1       12.1:1         12.3:1       11.9:1       12.0:1       11.9:1    
 

PMIERs Available Assets(6)

  $ 5,292      $ 5,147     $ 5,222       $ 5,077     $ 5,126     $ 4,926     $ 4,769    
 

PMIERs Required Assets(6)

  $ 3,043      $ 3,100     $ 2,961       $ 3,074     $ 2,839     $ 2,985     $ 3,005    
 

Available Assets Above PMIERs Requirements(6)

  $ 2,249      $ 2,047     $ 2,261       $ 2,003     $ 2,287     $ 1,941     $ 1,764    
 

PMIERs Sufficiency Ratio(6)

    174      166     176       165     181     165     159  
 

Average Primary Loan Size (in thousands)

  $ 255      $ 251     $ 246       $ 242     $ 237     $ 233     $ 228    

The expense ratio included above was calculated using whole dollars and may be different than the ratio calculated using the rounded numbers included herein.

 

(1) 

Primary insurance in-force represents aggregate unpaid balance for loans the company’s U.S. mortgage insurance subsidiaries insure.

(2) 

Primary risk in-force represents risk on current loan balances as provided by servicers, lenders and investors.

(3) 

The ratio of an insurer’s 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.

(4) 

Certain states limit a private mortgage insurer’s risk in-force to 25 times the total of the insurer’s policyholders’ surplus plus the statutory 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 company’s U.S. mortgage insurance subsidiaries.

(5) 

Enact Mortgage Insurance Corporation (EMICO), the company’s principal U.S. mortgage insurance subsidiary.

(6) 

The Private Mortgage Insurer Eligibility Requirements (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 and does not take into consideration the impact of restrictions recently imposed by the government-sponsored enterprises (GSEs). The GSEs have imposed certain capital restrictions on the company’s U.S. mortgage insurance subsidiaries which remain in effect until certain conditions are met. These restrictions required EMICO to maintain 115% of published PMIERs minimum required assets among other restrictions as of December 31, 2021. Effective January 1, 2022, these requirements increased to 120%.

 

18


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Loss Metrics—Enact Segment

(amounts in millions)

 

     2022     2021  
     3Q      2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

Average Paid Claim (in thousands)(1)

   $  42.2      $  50.1     $  51.6       $  27.2     $  26.7     $  63.1     $  54.7    

Average Reserve Per Primary Delinquency (in thousands)(2)

   $ 25.2      $ 27.0     $ 26.2       $ 24.4     $ 21.2     $ 17.5     $ 13.7    
 

Reserves:

                     

Direct primary case

   $ 476      $ 526     $ 591       $ 606     $ 613     $ 589     $ 564    

All other(3)

     34        33       34         35       35       35       39    
  

 

 

    

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total Reserves

   $ 510      $ 559     $ 625       $ 641     $ 648     $ 624     $ 603    
  

 

 

    

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   
 

Beginning Reserves

   $ 559      $ 625     $ 641     $ 641     $ 648     $ 624     $ 603     $ 555     $  555  

Paid claims

     (9      (4     (6     (19     (13     (10     (9     (7     (39

Increase (decrease) in reserves

     (40      (62     (10     (112     6       34       30       55       125  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending Reserves

   $ 510      $ 559     $ 625     $ 510     $ 641     $ 648     $ 624     $ 603     $ 641  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss Ratio(4)

     (17 )%       (26 )%      (4 )%      (16 )%      3     14     12     22     13
                         

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) 

Average paid claim in the third quarter of 2022 and the fourth and third quarters of 2021 includes payments in relation to agreements on non-performing loans. 

(2) 

Direct primary case reserves divided by primary delinquency count. 

(3) 

Other includes loss adjustment expenses, pool, incurred but not reported and reinsurance reserves. 

(4) 

The ratio of benefits and other changes in policy reserves to net earned premiums.

 

19


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Delinquency Metrics—Enact Segment

(dollar amounts in millions)

 

     2022
    2021  
     3Q      2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

Primary Loans

                     

Primary loans in-force

     949,052        946,891       941,689         937,350       936,934       933,616       922,186    

Primary delinquent loans

     18,856        19,513       22,571         24,820       28,904       33,568       41,332    

Primary delinquency rate

     1.99      2.06     2.40       2.65     3.08     3.60     4.48  
 

Beginning Number of Primary Delinquencies

     19,513        22,571       24,820       24,820       28,904       33,568       41,332       44,904       44,904  

New delinquencies

     9,121        7,847       8,724       25,692       8,282       7,427       6,862       10,053       32,624  

Delinquency cures

     (9,588      (10,806     (10,860     (31,254     (11,929     (11,746     (14,473     (13,478     (51,626

Paid claims

     (187      (90     (107     (384     (430     (343     (143     (134     (1,050

Rescissions and claim denials

     (3      (9     (6     (18     (7     (2     (10     (13     (32
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending Number of Primary Delinquencies

     18,856        19,513       22,571       18,856       24,820       28,904       33,568       41,332       24,820  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Composition of Cures

                     

Reported delinquent and cured-intraquarter

     1,598        1,306       1,581         1,274       1,143       1,149       1,549    

Number of missed payments delinquent prior to cure:

                     

3 payments or less

     3,719        4,037       3,902         3,563       3,080       4,179       4,812    

4 - 11 payments

     2,279        2,484       2,315         2,691       3,492       6,055       6,849    

12 payments or more

     1,992        2,979       3,062         4,401       4,031       3,090       268    
  

 

 

    

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total

     9,588        10,806       10,860         11,929       11,746       14,473       13,478    
  

 

 

    

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Primary Delinquencies by Missed Payment Status

                     

3 payments or less

     7,446        6,442       6,837         6,586       6,192       6,030       8,296    

4 - 11 payments

     6,119        6,372       6,875         7,360       9,021       12,378       21,011    

12 payments or more

     5,291        6,699       8,859         10,874       13,691       15,160       12,025    
  

 

 

    

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Primary Delinquencies

     18,856        19,513       22,571         24,820       28,904       33,568       41,332    
  

 

 

    

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   
                         
     September 30, 2022                                      

Direct Primary Case Reserves(1) and Percentage
Reserved by Payment Status

   Direct Case
Reserves
     Risk
In-Force
    Reserves as % of
Risk In-Force
                                     

3 payments or less in default

   $ 48      $ 401       12            

4 -11 payments in default

     146        358       41            

12 payments or more in default

     282        295       96            
  

 

 

    

 

 

               

Total

   $ 476      $ 1,054       45            
  

 

 

    

 

 

               
     December 31, 2021                                      

Direct Primary Case Reserves(1) and Percentage
Reserved by Payment Status

   Direct Case
Reserves
     Risk
In-Force
    Reserves as % of
Risk In-Force
                                     

3 payments or less in default

   $ 35      $ 340       10            

4 - 11 payments in default

     111        426       26            

12 payments or more in default

     460        643       72            
  

 

 

    

 

 

               

Total

   $ 606      $ 1,409       43            
  

 

 

    

 

 

               

 

(1) 

Direct primary case reserves exclude loss adjustment expenses, pool, incurred but not reported and reinsurance reserves. 

 

20


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Portfolio Quality Metrics—Enact Segment

(amounts in millions)

 

     September 30, 2022  

Policy Year

   % of Direct
Primary Case
Reserves
(1)
    Primary Insurance
In-Force
    % of Total     Primary Risk
In-Force
    % of Total     Delinquency
Rate
 

2008 and prior

     28   $ 6,849       3   $ 1,764       3     9.71

2009-2014

     4       2,293       1       609       1       5.00

2015

     4       3,133       1       840       1       3.68

2016

     7       6,772       3       1,805       3       3.14

2017

     8       6,818       3       1,792       3       3.75

2018

     10       7,133       3       1,806       3       4.47

2019

     12       17,070       7       4,313       7       2.65

2020

     16       58,497       24       14,891       25       1.31

2021

     10       83,740       35       20,848       34       0.92

2022

     1       49,508         20       12,456       20       0.26
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Total

     100   $ 241,813       100   $ 61,124       100     1.99
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   
     September 30, 2022     June 30, 2022     September 30, 2021  
     Primary Risk
In-Force
    Percent of
Primary Risk
In-Force
    Primary Risk
In-Force
    Percent of
Primary Risk
In-Force
    Primary Risk
In-Force
    Percent of
Primary Risk
In-Force
 

Loan-to-value ratio

            

95.01% and above

   $ 10,809       18   $ 10,647       18   $ 9,490       17

90.01% to 95.00%

     29,379       48       28,838       48       27,509       49  

85.01% to 90.00%

     17,019       28       16,517       27       15,322       28  

85.00% and below

     3,917       6       3,909           7       3,545           6  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 61,124       100   $ 59,911       100   $ 55,866       100
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     September 30, 2022     June 30, 2022     September 30, 2021  
     Primary Risk
In-Force
    Percent of
Primary Risk
In-Force
    Primary Risk
In-Force
    Percent of
Primary Risk
In-Force
    Primary Risk
In-Force
    Percent of
Primary Risk
In-Force
 

Credit Quality

            

Over 760

   $ 24,965       41   $ 24,252       40   $ 21,767       39

740 - 759

     9,808       16       9,559       16       8,824       16  

720 - 739

     8,656       14       8,484       14       7,966       14  

700 - 719

     7,200       12       7,129       12       6,923       12  

680 - 699

     5,356       9       5,329       9       5,383       10  

660 - 679(2)

     2,739       4       2,728       5       2,568       5  

640 - 659

     1,541       3       1,547       3       1,497       3  

620 - 639

     672       1       687       1       705       1  

<620

     187       —         196       —         233       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 61,124       100   $ 59,911       100   $ 55,866       100
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) 

Direct primary case reserves exclude loss adjustment expenses, pool, incurred but not reported and reinsurance reserves.

(2) 

Loans with unknown FICO scores are included in the 660-679 category.

 

21


 

U.S. Life Insurance Segment

 

22


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Adjusted Operating Income (Loss)—U.S. Life Insurance Segment

(amounts in millions)

 

    2022     2021  
    3Q     2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

REVENUES:

                   

Premiums

  $ 697     $ 688     $ 695     $ 2,080     $ 338     $ 699     $ 703     $ 714     $ 2,454  

Net investment income

    711       700       676       2,087       777       773       763       716       3,029  

Net investment gains (losses)

    (61)       4       56       (1     134       87       66       42       329  

Policy fees and other income

    138       129       137       404       128       144       145       148       565  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    1,485       1,521       1,564       4,570       1,377       1,703       1,677       1,620       6,377  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                   

Benefits and other changes in policy reserves

    1,210       816       1,141       3,167       849       1,097       1,129       1,155       4,230  

Interest credited

    81       80       82       243       84       85       87       90       346  

Acquisition and operating expenses, net of deferrals

    169       513       199       881       243       211       219       192       865  

Amortization of deferred acquisition costs and intangibles

    69       72       83       224       99       96       77       68       340  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

    1,529       1,481       1,505       4,515       1,275       1,489       1,512       1,505       5,781  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

    (44)       40       59       55       102       214       165       115       596  

Provision (benefit) for income taxes

    (2)       15       20       33       28       53       42       32       155  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

    (42)       25       39       22       74       161       123       83       441  
 

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:

                   

Net investment (gains) losses, net(1)

    60       (5     (55     —         (135     (87     (67     (41     (330

Initial loss from life block transaction

    —         —         —         —         92       —         —         —         92  

Expenses related to restructuring

    —         1       —         1       —         1       2       14       17  

Pension plan termination costs

    6       —         —         6       —         —         —         —         —    

Taxes on adjustments

    (13)       —         12       (1     10       18       13       6       47  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

  $ 11     $ 21     $ (4   $ 28     $ 41     $ 93     $ 71     $ 62     $ 267  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                       

 

(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

  $ 61     $ (4   $ (56   $ 1     $ (134   $ (87   $ (66   $ (42   $ (329

Adjustment for DAC and other intangible amortization and certain benefit reserves

    (1     (1     1       (1     (1     —         (1     1       (1
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment (gains) losses, net

  $ 60     $ (5   $ (55   $ —       $ (135   $ (87   $ (67   $ (41   $ (330
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

23


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Adjusted Operating Income—U.S. Life Insurance Segment—Long-Term Care Insurance

(amounts in millions)

 

    2022     2021  
    3Q     2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

REVENUES:

                   

Premiums

  $ 642     $ 628     $ 621     $ 1,891     $ 644     $ 652     $ 648     $ 646     $ 2,590  

Net investment income

    497       486       447       1,430       532       521       509       465       2,027  

Net investment gains (losses)

    (47     5       41       (1     83       80       67       27       257  

Policy fees and other income

    —         —         —         —         (6     3       2       2       1  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    1,092       1,119       1,109       3,320       1,253       1,256       1,226       1,140       4,875  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                   

Benefits and other changes in policy reserves

    961       935       812       2,708       817       802       822       829       3,270  

Interest credited

    —         —         —         —         —         —         —         —         —    

Acquisition and operating expenses, net of deferrals

    117       104       143       364       163       165       176       141       645  

Amortization of deferred acquisition costs and intangibles

    21       23       29       73       30       31       27       24       112  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

    1,099       1,062       984       3,145       1,010       998       1,025       994       4,027  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

    (7     57       125       175       243       258       201       146       848  

Provision for income taxes

    6       19       34       59       59       63       50       38       210  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

    (13     38       91       116       184       195       151       108       638  
 

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:

                   

Net investment (gains) losses

    47       (5     (41     1       (83     (80     (67     (27     (257

Expenses related to restructuring

    —         1       —         1       —         1       1       10       12  

Taxes on adjustments

    (9     —         9       —         18       17       13       4       52  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

  $ 25     $ 34     $ 59     $ 118     $ 119     $ 133     $ 98     $ 95     $ 445  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                       

RATIOS:

                 

Loss Ratio(1)

    83     81     64     76     62     58     62     62     61

Gross Benefits Ratio(2)

    149     149     131     143     127     123     127     128     126

 

(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.

 

24


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Adjusted Operating Loss—U.S. Life Insurance Segment—Life Insurance

(amounts in millions)

 

     2022     2021  
     3Q      2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

REVENUES:

                     

Premiums(1)

   $ 55      $ 60     $ 74     $ 189     $ (306   $ 47     $ 55     $ 68     $ (136

Net investment income

     118        121       121       360       124       128       126       125       503  

Net investment gains (losses)

     (7      2       9       4       50       6       6       12       74  

Policy fees and other income

     136        127       135       398       131       139       142       143       555  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     302        310       339       951       (1     320       329       348       996  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                     

Benefits and other changes in policy reserves(1)

     215        213       282       710       (14     252       245       282       765  

Interest credited

     53        52       52       157       53       53       53       56       215  

Acquisition and operating expenses, net of deferrals

     45        37       47       129       66       36       34       40       176  

Amortization of deferred acquisition costs and intangibles

     45        49       50       144       62       59       43       41       205  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     358        351       431       1,140       167       400       375       419       1,361  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     (56      (41     (92     (189     (168     (80     (46     (71     (365

Benefit for income taxes

     (12      (9     (20     (41     (37     (17     (10     (15     (79
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS

     (44      (32     (72     (148     (131     (63     (36     (56     (286
 

ADJUSTMENTS TO LOSS FROM CONTINUING OPERATIONS:

                     

Net investment (gains) losses

     7        (2     (9     (4     (50     (6     (6     (12     (74

Initial loss from life block transaction

     —          —         —         —         92       —         —         —         92  

Expenses related to restructuring

     —          —         —         —         —         —         1       3       4  

Pension plan termination costs

     6        —         —         6       —         —         —         —         —    

Taxes on adjustments

     (2      —         2       —         (9     1       1       2       (5
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING LOSS

   $ (33    $ (34   $ (79   $ (146   $ (98   $ (68   $ (40   $ (63   $ (269
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

 

(1) 

In the fourth quarter of 2021, as part of a life block transaction, the company entered into a new reinsurance agreement to cede certain of its term life insurance policies. This new reinsurance agreement primarily reduced premiums by $360 million and reduced benefits and other changes in policy reserves by $268 million for the amounts initially ceded.

 

25


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Adjusted Operating Income—U.S. Life Insurance Segment—Fixed Annuities

(amounts in millions)

 

     2022     2021  
     3Q      2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

REVENUES:

                     

Premiums

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

Net investment income

     96        93       108       297       121       124       128       126       499  

Net investment gains (losses)

     (7      (3     6       (4     1       1       (7     3       (2

Policy fees and other income

     2        2       2       6       3       2       1       3       9  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     91        92       116       299       125       127       122       132       506  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                     

Benefits and other changes in policy reserves(1)

     34        (332     47       (251     46       43       62       44       195  

Interest credited

     28        28       30       86       31       32       34       34       131  

Acquisition and operating expenses, net of deferrals(1)

     7        372       9       388       14       10       9       11       44  

Amortization of deferred acquisition costs and intangibles

     3        —         4       7       7       6       7       3       23  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     72        68       90       230       98       91       112       92       393  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     19        24       26       69       27       36       10       40       113  

Provision for income taxes

     4        5       6       15       6       7       2       9       24  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS

     15        19       20       54       21       29       8       31       89  
 

ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS:

                     

Net investment (gains) losses, net(2)

     6        2       (5     3       (2     (1     6       (2     1  

Expenses related to restructuring

     —          —         —         —         —         —         —         1       1  

Taxes on adjustments

     (2      —         1       (1     1       —         (1     —         —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 19      $ 21     $ 16     $ 56     $ 20     $ 28     $ 13     $ 30     $ 91  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

 

(1)  In the second quarter of 2022, the recapture of certain single premium immediate annuity contracts by a third party reduced benefits and other changes in policy reserves by $374 million and increased acquisition and operating expenses, net of deferrals, by $365 million.

(2)  Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below:

   

   

Net investment (gains) losses, gross

   $ 7      $ 3     $ (6   $ 4     $ (1   $ (1   $ 7     $ (3   $ 2  

Adjustment for DAC and other intangible amortization and certain benefit reserves

     (1      (1     1       (1     (1     —         (1     1       (1
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment (gains) losses, net

   $ 6      $ 2     $ (5   $ 3     $ (2   $ (1   $ 6     $ (2   $ 1  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

26


 

Runoff Segment

 

27


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Adjusted Operating Income—Runoff Segment

(amounts in millions)

 

   
    2022     2021  
    3Q     2Q     1Q     Total     4Q      3Q     2Q     1Q     Total  

REVENUES:

                    

Net investment income

  $ 57     $ 51     $ 50     $ 158     $ 53      $ 49     $ 43     $ 49     $ 194  

Net investment gains (losses)

    (12     (10     (15     (37     —          (1     10       (6     3  

Policy fees and other income

    28       29       31       88       33        33       35       33       134  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    73       70       66       209       86        81       88       76       331  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                    

Benefits and other changes in policy reserves

    10       11       8       29       5        12       2       8       27  

Interest credited

    47       45       43       135       43        38       40       41       162  

Acquisition and operating expenses, net of deferrals

    10       12       12       34       14        12       14       13       53  

Amortization of deferred acquisition costs and intangibles

    6       9       6       21       4        7       4       5       20  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

    73       77       69       219       66        69       60       67       262  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

    —         (7     (3     (10     20        12       28       9       69  

Provision (benefit) for income taxes

    (1     (2     (1     (4     4        2       6       1       13  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

    1       (5     (2     (6     16        10       22       8       56  
   

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:

                    

Net investment (gains) losses, net(1)

    11       9       14       34       —          1       (9     5       (3

Taxes on adjustments

    (3     (2     (3     (8     —          —         2       (1     1  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

  $ 9     $ 2     $ 9     $ 20     $ 16      $ 11     $ 15     $ 12     $ 54  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
                        

 

(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

  $ 12     $ 10     $ 15     $ 37     $ —        $ 1     $ (10   $ 6     $ (3

Adjustment for DAC and other intangible amortization and certain benefit reserves

    (1     (1     (1     (3     —          —         1       (1     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net investment (gains) losses, net

  $ 11     $ 9     $ 14     $ 34     $ —        $ 1     $ (9   $ 5     $ (3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

28


 

Corporate and Other

 

29


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Adjusted Operating Income (Loss)—Corporate and Other(1)

(amounts in millions)

 

     2022     2021  
     3Q      2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

REVENUES:

                     

Premiums

   $ 2      $ 1     $ 2     $ 5     $ 1     $ 2     $ 1     $ 2     $ 6  

Net investment income

     1        —         3       4       1       1       3       1       6  

Net investment gains (losses)

     4        15       (13     6       (2     1       (4     (2     (7

Policy fees and other income

     (1      1       —         —         —         1       —         —         1  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     6        17       (8     15       —         5       —         1       6  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                     

Benefits and other changes in policy reserves

     —          (1     —         (1     1       —         —         —         1  

Acquisition and operating expenses, net of deferrals

     6        6       6       18       42       12       8       13       75  

Amortization of deferred acquisition costs and intangibles

     —          —         —         —         1       —         1       —         2  

Interest expense

     14        13       13       40       18       22       31       38       109  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     20        18       19       57       62       34       40       51       187  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     (14      (1     (27     (42     (62     (29     (40     (50     (181

Provision (benefit) for income taxes

     2        3       (6     (1     (11     (26     (8     (8     (53
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS

     (16      (4     (21     (41     (51     (3     (32     (42     (128
 

ADJUSTMENTS TO LOSS FROM CONTINUING OPERATIONS:

                     

Net investment (gains) losses

     (4      (15     13       (6     2       (1     4       2       7  

(Gains) losses on early extinguishment of debt

     3        1       3       7       35       6       —         4       45  

Expenses related to restructuring

     —          —         —         —         5       1       1       7       14  

Taxes on adjustments

     —          4       (4     —         (9     (2     —         (3     (14
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

   $ (17    $ (14   $ (9   $ (40   $ (18   $ 1     $ (27   $ (32   $ (76
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

 

(1) 

Includes inter-segment eliminations and the results of other businesses that are managed outside the operating segments, including certain international mortgage insurance businesses.

 

30


 

Additional Financial Data

 

31


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Investments Summary

(amounts in millions)

 

     September 30, 2022      June 30, 2022     March 31, 2022     December 31, 2021     September 30, 2021  
     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

   $ 25,550        43    $ 27,342        43   $ 30,897        45   $ 34,181        46   $ 34,382        46

Private fixed maturity securities

     10,997        18        11,727        19       12,873        19       13,872        19       13,742        18  

Residential mortgage-backed securities(1)

     1,069        2        1,213        2       1,320        2       1,440        2       1,572        2  

Commercial mortgage-backed securities

     1,980        3        2,126        3       2,349        3       2,570        3       2,656        4  

Other asset-backed securities

     2,139        4        2,009        3       2,016        3       2,127        3       2,374        3  

State and political subdivisions

     2,532        4        2,849        5       3,134        5       3,450        5       3,418        5  

Non-investment grade fixed maturity securities

     1,948        3        2,020        3       2,438        4       2,840        4       3,130        4  

Equity securities:

                            

Common stocks and mutual funds

     204        —          172        —         151        —         115        —         72        —    

Preferred stocks

     70        —          71        —         79        —         83        —         84        —    

Commercial mortgage loans, net

     7,063        11        7,065        12       6,913        10       6,830        9       6,886        9  

Policy loans

     2,153        4        2,178        3       2,028        3       2,050        3       2,067        3  

Limited partnerships

     2,195        4        2,123        3       2,007        3       1,900        3       1,617        2  

Cash, cash equivalents, restricted cash and short-term investments

     1,563        3        1,774        3       1,367        2       1,597        2       2,006        3  

Other invested assets:

   Derivatives:                             
  

Interest rate swaps

     25        —          30        —         162        —         364        —         298        —    
  

Foreign currency swaps

     32        —          17        —         5        —         6        —         5        —    
  

Equity index options

     38        —          30        —         30        —         42        —         33        —    
  

Other foreign currency contracts

     —          —          —          —         —          —         2        —         2        —    
  

Other

     493        1        446        1       398        1       380        1       311        1  
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total invested assets and cash

   $ 60,051        100    $ 63,192        100   $ 68,167        100   $ 73,849        100   $ 74,655        100
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Public Fixed Maturity Securities—Credit Quality:

                                                                  

NRSRO(2) Designation

                                                                       

                           AAA

   $ 6,174        20    $ 6,713        20   $ 7,484        20   $ 8,316        20   $ 8,393        19

                             AA

     2,958        9        3,245        10       3,538        9       3,872        9       3,907        9  

                               A

     8,278        26        8,886        26       9,880        26       11,039        26       11,134        26  

                           BBB

     13,322        43        14,155        42       16,177        42       17,789        42       17,980        42  

                             BB

     780        2        846        2       1,079        3       1,443        3       1,658        4  

                               B

     33        —          33        —         61        —         42        —         53        —    

                     CCC and lower

     —          —          —          —         —          —         —          —         —          —    
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total public fixed maturity securities

   $ 31,545        100    $ 33,878        100   $ 38,219        100   $ 42,501        100   $ 43,125        100
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Private Fixed Maturity Securities—Credit Quality:

                                                                  

NRSRO(2) Designation

                                                                       

                           AAA

   $ 830        6    $ 806        5   $ 775        5   $ 821        5   $ 856        5

                             AA

     1,407        10        1,421        9       1,554        9       1,718        9       1,831        10  

                               A

     4,059        28        4,308        28       4,773        28       5,224        29       5,240        29  

                           BBB

     7,239        48        7,732        50       8,408        50       8,861        49       8,803        48  

                             BB

     1,028        7        1,015        7       1,159        7       1,186        7       1,252        7  

                               B

     107        1        120        1       131        1       161        1       158        1  

                     CCC and lower

     —          —          6        —         8        —         8        —         9        —    
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total private fixed maturity securities

   $ 14,670        100    $ 15,408        100   $ 16,808        100   $ 17,979        100   $ 18,149        100
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
                                         

 

(1) 

The company does not have any material exposure to residential mortgage-backed securities collateralized debt obligations (CDOs).

(2) 

Nationally Recognized Statistical Rating Organizations.

 

32


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Fixed Maturity Securities Summary

(amounts in millions)

 

     September 30, 2022      June 30, 2022     March 31, 2022     December 31, 2021     September 30, 2021  
     Fair Value      % of
Total
     Fair Value      % of
Total
    Fair Value      % of
Total
    Fair Value      % of
Total
    Fair Value      % of
Total
 

Fixed Maturity Securities—Security Sector:

                            
   

U.S. government, agencies and government-sponsored enterprises

   $ 3,307        7    $ 3,627        7   $ 4,097        8   $ 4,552        8   $ 4,500        7

State and political subdivisions

     2,532        6        2,849        6       3,134        6       3,450        6       3,418        6  

Foreign government

     622        1        682        1       784        1       835        1       835        1  

U.S. corporate

     26,562        58        28,243        58       31,823        58       34,924        58       35,132        57  

Foreign corporate

     7,947        17        8,482        17       9,453        17       10,535        17       10,740        18  

Residential mortgage-backed securities

     1,069        2        1,213        2       1,320        2       1,440        2       1,572        3  

Commercial mortgage-backed securities

     1,989        4        2,137        5       2,361        4       2,584        4       2,670        4  

Other asset-backed securities

     2,187        5        2,053        4       2,055        4       2,160        4       2,407        4  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total fixed maturity securities

   $ 46,215        100    $ 49,286        100   $ 55,027        100   $ 60,480        100   $ 61,274        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Corporate Bond Holdings—Industry Sector:

                            
   

Investment Grade:

                            

Finance and insurance

   $ 8,858        26    $ 9,313        25   $ 10,235        25   $ 11,204        25   $ 11,231        25

Utilities

     4,476        13        4,857        14       5,450        14       5,963        13       5,953        13  

Energy

     2,790        8        3,043        8       3,372        8       3,622        8       3,645        8  

Consumer - non-cyclical

     4,782        14        5,221        15       5,967        15       6,635        15       6,703        15  

Consumer - cyclical

     1,557        5        1,576        4       1,758        4       1,877        4       1,891        4  

Capital goods

     2,505        7        2,677        7       2,972        7       3,291        7       3,349        7  

Industrial

     1,806        5        1,877        5       2,092        5       2,278        5       2,251        5  

Technology and communications

     3,481        10        3,681        10       4,224        10       4,612        10       4,547        10  

Transportation

     1,385        4        1,465        4       1,642        4       1,832        4       1,836        4  

Other

     1,072        3        1,147        3       1,298        3       1,473        3       1,510        3  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal

     32,712        95        34,857        95       39,010        95       42,787        94       42,916        94  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-Investment Grade:

                            

Finance and insurance

     159        1        168        1       185        —         219        —         226        —    

Utilities

     48        —          56        —         62        —         69        —         95        —    

Energy

     399        1        431        1       568        1       695        2       782        2  

Consumer - non-cyclical

     140        —          141        —         192        1       267        1       270        1  

Consumer - cyclical

     302        1        290        1       321        1       363        1       369        1  

Capital goods

     158        1        146        —         159        —         159        —         163        —    

Industrial

     146        —          171        1       209        1       263        1       366        1  

Technology and communications

     266        1        286        1       372        1       446        1       490        1  

Transportation

     35        —          29        —         29        —         28        —         26        —    

Other

     144        —          150        —         169        —         163        —         169        —    
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal

     1,797        5        1,868        5       2,266        5       2,672        6       2,956        6  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 34,509        100    $ 36,725        100   $ 41,276        100   $ 45,459        100   $ 45,872        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Fixed Maturity Securities—Contractual Maturity Dates:

                            
   

Due in one year or less

   $ 1,128        2    $ 1,314        3   $ 1,420        3   $ 1,499        2   $ 1,449        2

Due after one year through five years

     7,856        17        7,958        16       8,501        15       8,807        15       9,039        15  

Due after five years through ten years

     11,751        25        12,765        26       13,943        25       15,053        25       14,956        24  

Due after ten years

     20,235        45        21,846        44       25,427        47       28,937        48       29,181        48  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal

     40,970        89        43,883        89       49,291        90       54,296        90       54,625        89  

Mortgage and asset-backed securities

     5,245        11        5,403        11       5,736        10       6,184        10       6,649        11  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total fixed maturity securities

   $ 46,215        100    $ 49,286        100   $ 55,027        100   $ 60,480        100   $ 61,274        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
                                      

 

33


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

General Account U.S. GAAP Net Investment Income Yields

(amounts in millions)

     2022     2021  
     3Q      2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

U.S. GAAP Net Investment Income

                     

Fixed maturity securities - taxable

   $ 576      $ 578     $ 580     $ 1,734     $ 590     $ 614     $ 608     $ 599     $ 2,411  

Fixed maturity securities - non-taxable

     2        1       1       4       2       2       1       2       7  

Equity securities

     3        2       2       7       2       2       2       3       9  

Commercial mortgage loans

     81        78       81       240       102       93       103       78       376  

Policy loans

     55        51       50       156       52       47       40       50       189  

Limited partnerships

     38        32       7       77       79       59       54       31       223  

Other invested assets

     67        66       63       196       62       63       58       58       241  

Cash, cash equivalents, restricted cash and short-term investments

     7        1       —         8       —         1       —         —         1  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross investment income before expenses and fees

     829        809       784       2,422       889       881       866       821       3,457  

Expenses and fees

     (21      (22     (20     (63     (23     (22     (22     (20     (87
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

   $ 808      $ 787     $ 764     $ 2,359     $ 866     $ 859     $ 844     $ 801     $ 3,370  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Annualized Yields

                     

Fixed maturity securities - taxable

     4.5      4.5     4.4     4.5     4.5     4.6     4.6     4.5     4.5

Fixed maturity securities - non-taxable

     7.1      3.6     3.6     4.8     6.7     6.3     3.1     6.3     5.6

Equity securities

     4.6      3.4     3.7     3.9     4.5     5.3     4.1     3.8     4.0

Commercial mortgage loans

     4.6      4.5     4.7     4.6     5.9     5.4     6.0     4.6     5.5

Policy loans

     10.2      9.7     9.8     9.9     10.1     9.1     7.9     10.1     9.3

Limited partnerships(1)

     7.0      6.2     1.4     5.0     18.0     15.9     17.2     11.2     15.7

Other invested assets(2)

     57.0      62.6     64.8     60.9     71.9     79.5     68.6     65.0     69.7

Cash, cash equivalents, restricted cash and short-term investments

     1.7      0.3     —       0.7     —       0.2     —       —       —  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross investment income before expenses and fees

     5.1      4.9     4.8     4.9     5.4     5.3     5.2     5.0     5.2

Expenses and fees

     (0.1 )%       (0.1 )%      (0.1 )%      (0.1 )%      (0.1 )%      (0.1 )%      (0.1 )%      (0.2 )%      (0.1 )% 
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

     5.0      4.8     4.7     4.8     5.3     5.2     5.1     4.8     5.1
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

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 39 herein for average invested assets and cash used in the yield calculation.

 

(1) 

Limited partnership investments are primarily equity-based and do not have fixed returns by period.

(2) 

Investment income for other invested assets includes amortization of terminated cash flow hedges, which have no corresponding book value within the yield calculation.

 

34


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Net Investment Gains (Losses), Net—Detail

(amounts in millions)

 

     2022     2021  
     3Q      2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

Realized investment gains (losses):

                     

Net realized gains (losses) on available-for-sale securities:

                     

Fixed maturity securities:

                     

U.S. corporate

   $ (23    $ (2   $ (12   $ (37   $ 28     $ 8     $ 2     $ 4     $ 42  

U.S. government, agencies and government-sponsored enterprises

     9        —         6       15       —         —         —         —         —    

Foreign corporate

     (7      (1     (2     (10     10       1       (2     1       10  

Foreign government

     —          —         —         —         —         (1     1       —         —    

Mortgage-backed securities

     (5      (1     —         (6     3       3       —         (1     5  

Asset-backed securities

     (1      —         —         (1     —         —         —         —         —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net realized gains (losses) on available-for-sale securities

     (27      (4     (8     (39     41       11       1       4       57  

Net realized gains (losses) on equity securities sold

     —          —         —         —         —         —         (2     (5     (7

Net realized gains (losses) on limited partnerships

     —          —         —         —         —         —         —         3       3  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net realized investment gains (losses)

     (27      (4     (8     (39     41       11       (1     2       53  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net change in allowance for credit losses on available-for-sale fixed maturity securities

     —          —         —         —         —         —         (4     (2     (6

Write-down of available-for-sale fixed maturity securities

     —          —         (2     (2     —         —         —         (1     (1

Net unrealized gains (losses) on equity securities still held

     (13      (27     (6     (46     4       (1     6       (8     1  

Net unrealized gains (losses) on limited partnerships

     (24      24       35       35       90       75       65       34       264  

Commercial mortgage loans

     —          2       1       3       (4     3       (1     (1     (3

Derivative instruments

     (5      9       4       8       5       (3     4       8       14  

Other

     —          4       4       8       (4     3       1       1       1  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment gains (losses), gross

     (69      8       28       (33     132       88       70       33       323  

Adjustment for DAC and other intangible amortization and certain benefit reserves

     2        2       —         4       1       —         —         —         1  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment gains (losses), net

   $ (67    $ 10     $ 28     $ (29   $ 133     $ 88     $ 70     $ 33     $ 324  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

 

35


 

Reconciliations of Non-GAAP Measures

 

36


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Reconciliation of Operating ROE

(amounts in millions)

 

Twelve Month Rolling Average ROE

   Twelve months ended  
U.S. GAAP Basis ROE    September 30,
2022
    June 30,
2022
    March 31,
2022
    December 31,
2021
    September 30,
2021
 

Net income available to Genworth Financial, Inc.’s common stockholders for the twelve months ended(1)

   $ 597     $ 807     $ 866     $ 904     $ 1,008  

Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss)(2)

   $ 11,789     $ 11,643     $ 11,467     $ 11,286     $ 11,079  

U.S. GAAP Basis ROE(1)/(2)

     5.1     6.9     7.6     8.0     9.1

Operating ROE

          

Adjusted operating income for the twelve months ended(1)

   $ 630     $ 710     $ 728     $ 765     $ 789  

Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss)(2)

   $ 11,789     $ 11,643     $ 11,467     $ 11,286     $ 11,079  

Operating ROE(1)/(2)

     5.3     6.1     6.3     6.8     7.1

Quarterly Average ROE

   Three months ended  
U.S. GAAP Basis ROE    September 30,
2022
    June 30,
2022
    March 31,
2022
    December 31,
2021
    September 30,
2021
 

Net income available to Genworth Financial, Inc.’s common stockholders for the period ended(3)

   $ 104     $ 181     $ 149     $ 163     $ 314  

Quarterly average Genworth Financial, Inc.’s stockholders’ equity for the period, excluding accumulated other comprehensive income (loss)(4)

   $ 12,011     $ 11,881     $ 11,723     $ 11,563     $ 11,403  

Annualized U.S. GAAP Quarterly Basis ROE(3)/(4)

     3.5     6.1     5.1     5.6     11.0

Operating ROE

          

Adjusted operating income for the period ended(3)

   $ 159     $ 176     $ 131     $ 164     $ 239  

Quarterly average Genworth Financial, Inc.’s stockholders’ equity for the period, excluding accumulated other comprehensive income (loss)(4)

   $ 12,011     $ 11,881     $ 11,723     $ 11,563     $ 11,403  

Annualized Operating Quarterly Basis ROE(3)/(4)

     5.3     5.9     4.5     5.7     8.4

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 available to Genworth Financial, Inc.’s common stockholders and adjusted operating income from page 9 herein.

(2) 

Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss), is derived by averaging ending Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss), for the most recent five quarters.

(3) 

Net income available to Genworth Financial, Inc.’s common stockholders and adjusted operating income from page 9 herein.

(4) 

Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss), is derived by averaging ending Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss).

 

37


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

Reconciliation of Consolidated Expense Ratio

(amounts in millions)

          2022     2021  
     GAAP Basis Expense Ratio    3Q      2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

(A)

   Acquisition and operating expenses, net of deferrals    $ 240      $ 589     $ 271     $ 1,100     $ 354     $ 290     $ 304     $ 275     $ 1,223  

(B)

   Premiums    $ 934      $ 927     $ 931     $ 2,792     $ 576     $ 944     $ 947     $ 968     $ 3,435  
 

(A) / (B)

   GAAP Basis Expense Ratio      26      64     29     39     61     31     32     28     36
 
   Adjusted Expense Ratio                      
   Acquisition and operating expenses, net of deferrals    $ 240      $ 589     $ 271     $ 1,100     $ 354     $ 290     $ 304     $ 275     $ 1,223  
   Less: Reinsurance recapture payment(1)      —          365       —         365       —         —         —         —         —    
   Less: Legal settlement expenses(2)      10        6       43       59       59       57       70       23       209  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(C)

   Adjusted acquisition and operating expenses, net of deferrals    $ 230      $ 218     $ 228     $ 676     $ 295     $ 233     $ 234     $ 252     $ 1,014  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 
   Premiums    $ 934      $ 927     $ 931     $ 2,792     $ 576     $ 944     $ 947     $ 968     $ 3,435  
   Add: Policy fees and other income      166        159       169       494       162       179       180       183       704  
   Add: Initial ceded premiums from a life block transaction(3)      —          —         —         —         360       —         —         —         360  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(D)

   Adjusted revenues    $ 1,100      $ 1,086     $ 1,100     $ 3,286     $ 1,098     $ 1,123     $ 1,127     $ 1,151     $ 4,499  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

(C) / (D)

   Adjusted expense ratio(4)      21      20     21     21     27     21     21     22     23

Non-GAAP Definition for Adjusted Expense Ratio

The company references the non-GAAP financial measure entitled “adjusted expense ratio” as a measure of its operating performance. The company defines adjusted expense ratio as acquisition and operating expenses, net of deferrals, less certain reinsurance expenses, less legal settlement expenses incurred in the company’s long-term care insurance business divided by the sum of premiums, policy fees and other income and premiums initially ceded under life block transactions. Management believes that the expense ratio analysis enhances understanding of the operating performance of the company. However, the adjusted expense ratio as defined by the company should not be viewed as a substitute for the GAAP basis expense ratio.

 

(1) 

In the second quarter of 2022, the company paid $365 million to a third party in connection with the recapture of certain single premium immediate annuity contracts.

(2) 

Estimated pre-tax impact of expenses related to policyholder benefit reduction elections made in connection with legal settlements in the company’s long-term care insurance business, which includes cash damages of $7 million, $6 million, $43 million, $54 million, $50 million, $61 million and $20 million for the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

(3) 

In the fourth quarter of 2021, the company entered into a new reinsurance agreement to cede certain of its term life insurance policies as part of a life block transaction. Under this new reinsurance agreement, the company initially ceded $360 million of certain term life insurance premiums.

(4) 

In the first quarter of 2022, the company recorded a legal settlement accrual of $25 million in its life insurance business, which increased the adjusted expense ratio by three percentage points for the three months ended March 31, 2022.

 

38


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2022

 

Reconciliation of Reported Yield to Core Yield

 

          2022     2021  
     (Assets - amounts in billions)    3Q     2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  
   Reported - Total Invested Assets and Cash    $ 60.1     $ 63.2     $ 68.2     $ 60.1     $ 73.8     $ 74.7     $ 75.2     $ 72.9     $ 73.8  
   Subtract:                     
  

Securities lending

     —         —         —         —         —         —         0.1       0.1       —    
  

Unrealized gains (losses)

     (4.9     (1.9     3.0       (4.9     8.2       8.5       8.9       6.9       8.2  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   Adjusted end of period invested assets and cash    $ 65.0     $ 65.1     $ 65.2     $ 65.0     $ 65.6     $ 66.2     $ 66.2     $ 65.9     $ 65.6  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(A)

   Average Invested Assets and Cash Used in Reported and Core Yield Calculation    $ 65.0     $ 65.2     $ 65.4     $ 65.2     $ 65.9     $ 66.2     $ 66.1     $ 66.2     $ 66.1  
 
   (Income - amounts in millions)                     
 

(B)

   Reported - Net Investment Income    $ 808     $ 787     $ 764     $ 2,359     $ 866     $ 859     $ 844     $ 801     $ 3,370  
  

Subtract:

                    
  

Bond calls and commercial mortgage loan prepayments

     6       7       10       23       38       43       39       15       135  
  

Other non-core items(1)

     —         —         —         —         2       (4     3       2       3  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(C)

  

Core Net Investment Income

   $ 802     $ 780     $ 754     $ 2,336     $ 826     $ 820     $ 802     $ 784     $ 3,232  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

(B) / (A)

  

Reported Yield

     4.97     4.83     4.67     4.82     5.26     5.19     5.11     4.84     5.10

(C) / (A)

  

Core Yield

     4.93     4.79     4.61     4.78     5.01     4.95     4.85     4.73     4.89

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) 

Includes cost basis adjustments on structured securities and various other immaterial items.

 

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