Exhibit 99.1
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i
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Cautionary Note Regarding Forward-Looking Statements
This financial supplement contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will" or words of similar meaning and include, but are not limited to, statements regarding the outlook for future business and financial performance of Genworth Financial, Inc. and its consolidated subsidiaries. Forward-looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks, as well as risks discussed in the risk factor section of the company’s Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission on February 28, 2023. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
ii
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
| 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 |
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| 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 | |||
| Quarterly Results by Business |
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| Adjusted Operating Income and Sales—Enact Segment |
15-20 | |||
| Adjusted Operating Income (Loss) and Statutory Impact of In-Force Rate Actions—Long-Term Care Insurance Segment |
22-23 | |||
| Adjusted Operating Income (Loss)—Life and Annuities Segment |
25-28 | |||
| Adjusted Operating Loss—Corporate and Other |
30 | |||
| Additional Financial Data |
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| Investments Summary |
32 | |||
| Fixed Maturity Securities Summary |
33 | |||
| U.S. GAAP Net Investment Income Yields |
34 | |||
| Net Investment Gains (Losses)—Detail |
35 | |||
| Reconciliations of Non-GAAP Measures |
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| 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
SECOND QUARTER 2023
On January 1, 2023, the company adopted new U.S. GAAP accounting guidance that significantly changed the recognition and measurement of long-duration insurance contracts, commonly known as long-duration targeted improvements (LDTI). This accounting guidance impacted the company’s long-term care insurance, life insurance and annuity products and was applied as of January 1, 2021, also known as the transition date. While the new guidance has had a significant impact on U.S. GAAP financial statements and disclosures, it does not impact the cash flows or underlying economics of the business, business strategy, statutory net income (loss), risk-based capital of the company’s U.S. life insurance companies, management of capital or the company’s Enact segment and Corporate and Other.
All prior period information has been re-presented to reflect the adoption of LDTI and is currently unaudited. It is possible that the final audited financial results may differ, perhaps materially, from the information included in this financial supplement. In addition, the unaudited financial results reported in this financial supplement are not indicative of future financial results, although as the company has indicated, it does expect the quarterly volatility of results in its Long-Term Care Insurance and Life and Annuities segments to extend to future periods with the adoption of LDTI.
There are some changes related to the implementation of LDTI to highlight for the company's Long-Term Care Insurance and Life and Annuities segments:
| • | Assumptions are best estimate and updated annually in the fourth quarter. Changes in assumptions now flow through the liability remeasurement (gains) losses financial statement line item in the income statement, which contributes significantly to annual income volatility. However, the company will update cash flow assumptions related to the timing and approval amounts of in-force rate actions on a quarterly basis, which could contribute to quarterly income volatility for its Long-Term Care Insurance segment. |
| • | Assumptions are recorded at a more granular cohort level. Impacts from older less profitable capped cohorts that do not have margin will more heavily influence income statement results than impacts from newer uncapped profitable cohorts that have positive margin. |
| • | The liability remeasurement (gains) losses financial statement line item in the income statement includes the differences between actual experience and best estimate assumptions on a quarterly basis and can be favorable or unfavorable. This line item also includes the quarterly updates to cash flow assumptions noted above related to in-force rate actions. Both of these items could contribute to quarterly income volatility in the Long-Term Care Insurance segment. |
| • | Best estimate assumptions for long-term care insurance products now include an estimate for benefit reductions from both in-force rate actions and legal settlements. Similarly, cash payments made to policyholders who elect certain reduced benefit options in connection with long-term care insurance legal settlements, referred to as “settlement payments,” are also included in the liability for future policyholder benefits. Therefore, the impacts from benefit reductions and settlement payments will only impact the income statement on a quarterly basis to the extent that actual experience differs from expectations as mentioned above. There was no change to how the company accounts for premiums related to in-force rate actions, which are recorded to the income statement when they occur. |
| • | Market risk benefits (primarily variable annuities) are recorded at fair value. The company excludes changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges from adjusted operating income (loss). See page 25 for additional details. |
In the second quarter of 2023, the company revised its accounting for the liability for future policy benefits in its long-term care insurance products under LDTI to include an estimate in its cash flow assumptions for settlement payments. The company's historical accounting practice was to record settlement payments as incurred through current period earnings. The impact of this revision to prior periods is reflected in the financial results included in this quarterly financial supplement. Accordingly, for all periods prior to the second quarter of 2023, this quarterly financial supplement replaces and supersedes the quarterly financial supplement previously furnished for the first quarter of 2023 on July 11, 2023.
Additional information concerning the company's long-term care insurance business is included on page 22 of this financial supplement. As disclosed on page 22, in the fourth quarter of 2022, the liability remeasurement gain of $255 million in the company's long-term care insurance business reflected favorable assumption updates of $303 million, largely from an update to legal settlement elections attributable to the inclusion of a second legal settlement and the resulting expected reserve reduction, net of settlement payments to policyholders. This settlement, comprised of PCS I and PSC II policies, represents approximately 15% of the overall block and impacts older unprofitable capped cohorts. When the company updates its assumptions for its third long-term care insurance legal settlement later in 2023 for its Choice II policies, which represents approximately 35% of the overall block, the income statement impact is not expected to be as material because this settlement impacts profitable uncapped cohorts. As previously disclosed, the company’s blocks with profits or margin have a net premium ratio below 100% and therefore have less impact on liability remeasurement (gains) losses in the income statement.
Page 23 provides further information for investors on the company’s long-term care insurance business and the impact of in-force rate actions, including the legal settlements, on pre-tax statutory earnings.
Thank you for your continued interest in Genworth Financial, Inc.
Regards,
Sarah E. Crews, Investor Relations
InvestorInfo@genworth.com
3
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
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 company’s President and Chief Executive Officer (Principal Executive Officer), who serves as 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), changes in fair value of market risk benefits and associated hedges, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, restructuring costs and infrequent or unusual non-operating items. 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. The company excludes net investment gains (losses), changes in fair value of market risk benefits and associated hedges, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, restructuring costs and infrequent or unusual non-operating items from adjusted operating income (loss) because, in the company’s opinion, they are not indicative of overall operating performance.
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. Changes in fair value of market risk benefits and associated hedges are adjusted to exclude changes in reserves, attributed fees and benefit payments.
In the third and fourth quarters of 2022, the company incurred $6 million and $2 million, respectively, 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.
Statutory Accounting Data
The company presents certain supplemental statutory data for Genworth Life Insurance Company (GLIC) and its consolidating life insurance subsidiaries that has been prepared on the basis of statutory accounting principles (SAP). GLIC and its consolidating life insurance subsidiaries file financial statements with state insurance regulatory authorities and the National Association of Insurance Commissioners that are prepared using SAP, an accounting basis either prescribed or permitted by such authorities. Due to differences in methodology between SAP and U.S. GAAP, the values for assets, liabilities and equity, and the recognition of income and expenses, reflected in financial statements prepared in accordance with U.S. GAAP are materially different from those reflected in financial statements prepared under SAP. This supplemental statutory data should not be viewed as an alternative to, or used in lieu of, U.S. GAAP.
This supplemental statutory data includes the impact from in-force rate actions on pre-tax long-term care insurance statutory earnings. Statutory pre-tax earnings represent the net gain from operations, including the impact from in-force rate actions, before dividends to policyholders, refunds to members and federal income taxes and before realized capital gains or (losses). Management uses and provides this supplemental statutory data because it believes it provides a useful measure of, among other things, statutory pre-tax earnings and the adequacy of capital. Management uses this data to measure against its policy to manage the U.S. life insurance companies with internally generated capital.
4
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Results of Operations and Selected Operating Performance Measures
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.
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. U.S. GAAP generally requires an annualized effective tax rate to be used for interim reporting periods, utilizing projections of full year results. However, in certain circumstances it is appropriate to record the actual effective tax rate for the period if a reliable full year estimate cannot be made. For the three months ended March 31, 2023 and June 30, 2023, the company utilized the actual effective tax rate for the interim period to record the provision for income taxes for its Long-Term Care Insurance and Life and Annuities segments and the annualized projected effective tax rate for its Enact segment and Corporate and Other. The company utilized the effective tax rate for the year ended December 31, 2022 and 2021 in determining the re-presented provision for income taxes for the quarters in 2022 and the full year 2021, respectively.
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, risk in-force and a loss ratio 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. The loss ratio is the ratio of benefits and other changes in policy reserves to net earned premiums. The company considers the loss ratio to be a measure of underwriting performance and helps to enhance the understanding of the operating performance of the Enact segment.
These operating performance measures enable the company to compare its operating performance across periods without regard to revenues or profitability related to policies or contracts sold in prior periods or from investments or other sources.
5
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
(amounts in millions, except per share data)
| Balance Sheet Data |
June 30, 2023 |
March 31, 2023 |
December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
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| Total Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss) |
$ | 10,321 | $ | 10,292 | $ | 10,245 | $ | 9,892 | $ | 9,769 | ||||||||||
| Total accumulated other comprehensive income (loss)(1) |
(2,861 | ) | (2,853 | ) | (2,614 | ) | (2,632 | ) | (3,288 | ) | ||||||||||
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| Total Genworth Financial, Inc.’s stockholders’ equity |
$ | 7,460 | $ | 7,439 | $ | 7,631 | $ | 7,260 | $ | 6,481 | ||||||||||
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| Book value per share |
$ | 15.98 | $ | 15.28 | $ | 15.40 | $ | 14.44 | $ | 12.76 | ||||||||||
| Book value per share, excluding accumulated other comprehensive income (loss) |
$ | 22.11 | $ | 21.14 | $ | 20.68 | $ | 19.68 | $ | 19.24 | ||||||||||
| Common shares outstanding as of the balance sheet date |
466.8 | 486.9 | 495.4 | 502.6 | 507.8 | |||||||||||||||
| Three months ended | ||||||||||||||||||||
| Quarterly Average ROE |
June 30, 2023 |
March 31, 2023 |
December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
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| U.S. GAAP Basis ROE |
5.3 | % | 4.8 | % | 15.1 | % | 5.5 | % | 6.6 | % | ||||||||||
| Operating ROE(2) |
3.3 | % | 5.6 | % | 13.4 | % | 6.4 | % | 6.3 | % | ||||||||||
| Basic and Diluted Shares |
Three months ended June 30, 2023 |
Six months ended June 30, 2023 |
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| Weighted-average common shares used in basic earnings per share calculations |
473.2 | 482.7 | ||||||||||||||||||
| Potentially dilutive securities: |
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| Stock options, restricted stock units and other equity-based awards |
4.9 | 6.4 | ||||||||||||||||||
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| Weighted-average common shares used in diluted earnings per share calculations |
478.1 | 489.1 | ||||||||||||||||||
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| (1) | As of June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, total accumulated other comprehensive income (loss) includes $(964) million, $(1,628) million, $(403) million, $115 million and $(3,167) million, net of taxes, respectively, related to changes in the current discount rate used to remeasure the liability for future policy benefits and related reinsurance recoverables. |
| (2) | 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
SECOND QUARTER 2023
Consolidated Net Income by Quarter
(amounts in millions, except per share amounts)
| 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||
| 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | Full Year | ||||||||||||||||||||||||||||
| REVENUES: |
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| Premiums |
$ | 902 | $ | 915 | $ | 1,817 | $ | 918 | $ | 929 | $ | 916 | $ | 917 | $ | 3,680 | $ | 3,406 | ||||||||||||||||||
| Net investment income |
785 | 787 | 1,572 | 787 | 808 | 787 | 764 | 3,146 | 3,370 | |||||||||||||||||||||||||||
| Net investment gains (losses) |
39 | (11 | ) | 28 | (5 | ) | (58 | ) | 19 | 42 | (2 | ) | 322 | |||||||||||||||||||||||
| Policy fees and other income |
166 | 163 | 329 | 167 | 169 | 165 | 170 | 671 | 724 | |||||||||||||||||||||||||||
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| Total revenues |
1,892 | 1,854 | 3,746 | 1,867 | 1,848 | 1,887 | 1,893 | 7,495 | 7,822 | |||||||||||||||||||||||||||
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| BENEFITS AND EXPENSES: |
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| Benefits and other changes in policy reserves |
1,175 | 1,176 | 2,351 | 1,209 | 1,159 | 768 | 1,167 | 4,303 | 4,615 | |||||||||||||||||||||||||||
| Liability remeasurement (gains) losses |
70 | (15 | ) | 55 | (267 | ) | 17 | 24 | (64 | ) | (290 | ) | 202 | |||||||||||||||||||||||
| Changes in fair value of market risk benefits and associated hedges |
(19 | ) | 17 | (2 | ) | (56 | ) | (27 | ) | 20 | (41 | ) | (104 | ) | (160 | ) | ||||||||||||||||||||
| Interest credited |
126 | 126 | 252 | 125 | 128 | 126 | 125 | 504 | 511 | |||||||||||||||||||||||||||
| Acquisition and operating expenses, net of deferrals |
226 | 240 | 466 | 225 | 245 | 579 | 236 | 1,285 | 998 | |||||||||||||||||||||||||||
| Amortization of deferred acquisition costs and intangibles |
64 | 72 | 136 | 74 | 80 | 84 | 88 | 326 | 384 | |||||||||||||||||||||||||||
| Interest expense |
29 | 29 | 58 | 28 | 26 | 26 | 26 | 106 | 160 | |||||||||||||||||||||||||||
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| Total benefits and expenses |
1,671 | 1,645 | 3,316 | 1,338 | 1,628 | 1,627 | 1,537 | 6,130 | 6,710 | |||||||||||||||||||||||||||
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| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
221 | 209 | 430 | 529 | 220 | 260 | 356 | 1,365 | 1,112 | |||||||||||||||||||||||||||
| Provision for income taxes |
55 | 55 | 110 | 119 | 54 | 62 | 84 | 319 | 248 | |||||||||||||||||||||||||||
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| INCOME FROM CONTINUING OPERATIONS |
166 | 154 | 320 | 410 | 166 | 198 | 272 | 1,046 | 864 | |||||||||||||||||||||||||||
| Net income (loss) from discontinued operations, net of taxes(1) |
2 | — | 2 | (2 | ) | 5 | (1 | ) | (2 | ) | — | 27 | ||||||||||||||||||||||||
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| NET INCOME |
168 | 154 | 322 | 408 | 171 | 197 | 270 | 1,046 | 891 | |||||||||||||||||||||||||||
| Less: net income from continuing operations attributable to noncontrolling interests |
31 | 32 | 63 | 27 | 35 | 38 | 30 | 130 | 33 | |||||||||||||||||||||||||||
| Less: net income from discontinued operations attributable to noncontrolling interests |
— | — | — | — | — | — | — | — | 8 | |||||||||||||||||||||||||||
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| NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS |
$ | 137 | $ | 122 | $ | 259 | $ | 381 | $ | 136 | $ | 159 | $ | 240 | $ | 916 | $ | 850 | ||||||||||||||||||
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| NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS: |
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| Income from continuing operations available to Genworth Financial, Inc.’s common stockholders |
$ | 135 | $ | 122 | $ | 257 | $ | 383 | $ | 131 | $ | 160 | $ | 242 | $ | 916 | $ | 831 | ||||||||||||||||||
| Income (loss) from discontinued operations available to Genworth Financial, Inc.’s common stockholders |
2 | — | 2 | (2 | ) | 5 | (1 | ) | (2 | ) | — | 19 | ||||||||||||||||||||||||
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| NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS |
$ | 137 | $ | 122 | $ | 259 | $ | 381 | $ | 136 | $ | 159 | $ | 240 | $ | 916 | $ | 850 | ||||||||||||||||||
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| Earnings Per Share Data: |
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| Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share |
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| Basic |
$ | 0.28 | $ | 0.25 | $ | 0.53 | $ | 0.77 | $ | 0.26 | $ | 0.32 | $ | 0.48 | $ | 1.82 | $ | 1.64 | ||||||||||||||||||
| Diluted |
$ | 0.28 | $ | 0.24 | $ | 0.53 | $ | 0.76 | $ | 0.26 | $ | 0.31 | $ | 0.47 | $ | 1.79 | $ | 1.61 | ||||||||||||||||||
| Net income available to Genworth Financial, Inc.’s common stockholders per share |
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| Basic |
$ | 0.29 | $ | 0.25 | $ | 0.54 | $ | 0.77 | $ | 0.27 | $ | 0.31 | $ | 0.47 | $ | 1.82 | $ | 1.68 | ||||||||||||||||||
| Diluted |
$ | 0.29 | $ | 0.24 | $ | 0.53 | $ | 0.76 | $ | 0.27 | $ | 0.31 | $ | 0.46 | $ | 1.79 | $ | 1.65 | ||||||||||||||||||
| Weighted-average common shares outstanding |
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| Basic |
473.2 | 492.3 | 482.7 | 496.5 | 503.8 | 508.9 | 508.3 | 504.4 | 506.9 | |||||||||||||||||||||||||||
| Diluted |
478.1 | 500.1 | 489.1 | 502.9 | 509.3 | 514.1 | 517.4 | 510.9 | 514.7 | |||||||||||||||||||||||||||
| (1) | Income (loss) from discontinued operations primarily relates to a settlement agreement involving the company's former lifestyle protection insurance business that was sold on December 1, 2015. |
8
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Reconciliation of Net Income to Adjusted Operating Income
(amounts in millions, except per share amounts)
| 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||
| 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | Full Year | ||||||||||||||||||||||||||||
| NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS |
$ | 137 | $ | 122 | $ | 259 | $ | 381 | $ | 136 | $ | 159 | $ | 240 | $ | 916 | $ | 850 | ||||||||||||||||||
| Add: net income from continuing operations attributable to noncontrolling interests |
31 | 32 | 63 | 27 | 35 | 38 | 30 | 130 | 33 | |||||||||||||||||||||||||||
| Add: net income from discontinued operations attributable to noncontrolling interests |
— | — | — | — | — | — | — | — | 8 | |||||||||||||||||||||||||||
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|
|||||||||||||||||||
| NET INCOME |
168 | 154 | 322 | 408 | 171 | 197 | 270 | 1,046 | 891 | |||||||||||||||||||||||||||
| Less: income (loss) from discontinued operations, net of taxes |
2 | — | 2 | (2 | ) | 5 | (1 | ) | (2 | ) | — | 27 | ||||||||||||||||||||||||
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|
|||||||||||||||||||
| INCOME FROM CONTINUING OPERATIONS |
166 | 154 | 320 | 410 | 166 | 198 | 272 | 1,046 | 864 | |||||||||||||||||||||||||||
| Less: net income from continuing operations attributable to noncontrolling interests |
31 | 32 | 63 | 27 | 35 | 38 | 30 | 130 | 33 | |||||||||||||||||||||||||||
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|
|||||||||||||||||||
| INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS |
135 | 122 | 257 | 383 | 131 | 160 | 242 | 916 | 831 | |||||||||||||||||||||||||||
| ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||||||||||||||
| Net investment (gains) losses, net(1) |
(41 | ) | 11 | (30 | ) | 5 | 58 | (19 | ) | (42 | ) | 2 | (322 | ) | ||||||||||||||||||||||
| Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges(2) |
(23 | ) | 14 | (9 | ) | (64 | ) | (32 | ) | 8 | (54 | ) | (142 | ) | (210 | ) | ||||||||||||||||||||
| (Gains) losses on early extinguishment of debt |
— | (1 | ) | (1 | ) | (1 | ) | 3 | 1 | 3 | 6 | 45 | ||||||||||||||||||||||||
| Expenses related to restructuring |
1 | 3 | 4 | 1 | — | 1 | — | 2 | 34 | |||||||||||||||||||||||||||
| Pension plan termination costs |
— | — | — | 2 | 6 | — | — | 8 | — | |||||||||||||||||||||||||||
| Taxes on adjustments |
13 | (5 | ) | 8 | 12 | (8 | ) | 2 | 20 | 26 | 96 | |||||||||||||||||||||||||
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|||||||||||||||||||
| ADJUSTED OPERATING INCOME |
$ | 85 | $ | 144 | $ | 229 | $ | 338 | $ | 158 | $ | 153 | $ | 169 | $ | 818 | $ | 474 | ||||||||||||||||||
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|||||||||||||||||||
| ADJUSTED OPERATING INCOME (LOSS): |
||||||||||||||||||||||||||||||||||||
| Enact segment |
$ | 146 | $ | 143 | $ | 289 | $ | 120 | $ | 156 | $ | 167 | $ | 135 | $ | 578 | $ | 520 | ||||||||||||||||||
| Long-Term Care Insurance segment |
(43 | ) | 23 | (20 | ) | 204 | 26 | 17 | 73 | 320 | 126 | |||||||||||||||||||||||||
| Life and Annuities segment: |
||||||||||||||||||||||||||||||||||||
| Life Insurance |
(17 | ) | (27 | ) | (44 | ) | 1 | (28 | ) | (37 | ) | (47 | ) | (111 | ) | (201 | ) | |||||||||||||||||||
| Fixed Annuities |
10 | 14 | 24 | 14 | 15 | 20 | 13 | 62 | 83 | |||||||||||||||||||||||||||
| Variable Annuities |
9 | 9 | 18 | 8 | 7 | 2 | 4 | 21 | 22 | |||||||||||||||||||||||||||
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|||||||||||||||||||
| Total Life and Annuities segment |
2 | (4 | ) | (2 | ) | 23 | (6 | ) | (15 | ) | (30 | ) | (28 | ) | (96 | ) | ||||||||||||||||||||
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|
|||||||||||||||||||
| Corporate and Other |
(20 | ) | (18 | ) | (38 | ) | (9 | ) | (18 | ) | (16 | ) | (9 | ) | (52 | ) | (76 | ) | ||||||||||||||||||
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|
|||||||||||||||||||
| ADJUSTED OPERATING INCOME |
$ | 85 | $ | 144 | $ | 229 | $ | 338 | $ | 158 | $ | 153 | $ | 169 | $ | 818 | $ | 474 | ||||||||||||||||||
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|||||||||||||||||||
| Earnings Per Share Data: |
||||||||||||||||||||||||||||||||||||
| Net income available to Genworth Financial, Inc.’s common stockholders per share |
||||||||||||||||||||||||||||||||||||
| Basic |
$ | 0.29 | $ | 0.25 | $ | 0.54 | $ | 0.77 | $ | 0.27 | $ | 0.31 | $ | 0.47 | $ | 1.82 | $ | 1.68 | ||||||||||||||||||
| Diluted |
$ | 0.29 | $ | 0.24 | $ | 0.53 | $ | 0.76 | $ | 0.27 | $ | 0.31 | $ | 0.46 | $ | 1.79 | $ | 1.65 | ||||||||||||||||||
| Adjusted operating income per share |
||||||||||||||||||||||||||||||||||||
| Basic |
$ | 0.18 | $ | 0.29 | $ | 0.47 | $ | 0.68 | $ | 0.31 | $ | 0.30 | $ | 0.33 | $ | 1.62 | $ | 0.93 | ||||||||||||||||||
| Diluted |
$ | 0.18 | $ | 0.29 | $ | 0.47 | $ | 0.67 | $ | 0.31 | $ | 0.30 | $ | 0.33 | $ | 1.60 | $ | 0.92 | ||||||||||||||||||
| Weighted-average common shares outstanding |
||||||||||||||||||||||||||||||||||||
| Basic |
473.2 | 492.3 | 482.7 | 496.5 | 503.8 | 508.9 | 508.3 | 504.4 | 506.9 | |||||||||||||||||||||||||||
| Diluted |
478.1 | 500.1 | 489.1 | 502.9 | 509.3 | 514.1 | 517.4 | 510.9 | 514.7 | |||||||||||||||||||||||||||
| (1) | Net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests (see page 35 for reconciliation). |
| (2) | Changes in fair value of market risk benefits and associated hedges were adjusted to exclude changes in reserves, attributed fees and benefit payments (see page 25 for reconciliation). |
9
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
(amounts in millions)
| June 30, 2023 |
March 31, 2023 |
December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
||||||||||||||||
| ASSETS |
||||||||||||||||||||
| Investments: |
||||||||||||||||||||
| Fixed maturity securities available-for-sale, at fair value(1) |
$ | 46,070 | $ | 47,381 | $ | 46,583 | $ | 46,215 | $ | 49,286 | ||||||||||
| Equity securities, at fair value |
378 | 364 | 319 | 274 | 243 | |||||||||||||||
| Commercial mortgage loans(2) |
6,876 | 6,915 | 7,032 | 7,086 | 7,088 | |||||||||||||||
| Less: Allowance for credit losses |
(24 | ) | (24 | ) | (22 | ) | (23 | ) | (23 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Commercial mortgage loans, net |
6,852 | 6,891 | 7,010 | 7,063 | 7,065 | |||||||||||||||
| Policy loans |
2,270 | 2,133 | 2,139 | 2,153 | 2,178 | |||||||||||||||
| Limited partnerships |
2,585 | 2,456 | 2,331 | 2,195 | 2,123 | |||||||||||||||
| Other invested assets |
648 | 617 | 566 | 590 | 573 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total investments |
58,803 | 59,842 | 58,948 | 58,490 | 61,468 | |||||||||||||||
| Cash, cash equivalents and restricted cash |
2,173 | 1,752 | 1,799 | 1,561 | 1,724 | |||||||||||||||
| Accrued investment income |
553 | 700 | 643 | 616 | 553 | |||||||||||||||
| Deferred acquisition costs |
2,096 | 2,150 | 2,211 | 2,276 | 2,342 | |||||||||||||||
| Intangible assets |
201 | 203 | 203 | 209 | 215 | |||||||||||||||
| Reinsurance recoverable |
19,113 | 19,606 | 19,059 | 18,906 | 20,659 | |||||||||||||||
| Less: Allowance for credit losses |
(64 | ) | (64 | ) | (63 | ) | (64 | ) | (63 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Reinsurance recoverable, net |
19,049 | 19,542 | 18,996 | 18,842 | 20,596 | |||||||||||||||
| Other assets |
445 | 478 | 488 | 493 | 521 | |||||||||||||||
| Deferred tax asset |
1,954 | 2,002 | 1,983 | 2,092 | 2,492 | |||||||||||||||
| Market risk benefit assets |
37 | 28 | 26 | 20 | 22 | |||||||||||||||
| Separate account assets |
4,533 | 4,479 | 4,417 | 4,298 | 4,683 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 89,844 | $ | 91,176 | $ | 89,714 | $ | 88,897 | $ | 94,616 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) | Amortized cost of $49,864 million, $50,461 million, $50,834 million, $51,248 million and $51,248 million as of June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively, and allowance for credit losses of $4 million as of June 30, 2023, $15 million as of March 31, 2023 and $— as of December 31, 2022, September 30, 2022 and June 30, 2022. |
| (2) | Net of unamortized balance of loan origination fees and costs of $4 million as of June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022. |
10
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
(amounts in millions)
| June 30, 2023 |
March 31, 2023 |
December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
||||||||||||||||
| LIABILITIES AND EQUITY |
||||||||||||||||||||
| Liabilities: |
||||||||||||||||||||
| Future policy benefits |
$ | 56,443 | $ | 57,531 | $ | 55,407 | $ | 54,553 | $ | 60,254 | ||||||||||
| Policyholder account balances |
15,922 | 16,202 | 16,564 | 16,985 | 17,332 | |||||||||||||||
| Market risk benefit liabilities |
666 | 761 | 748 | 832 | 910 | |||||||||||||||
| Liability for policy and contract claims |
628 | 665 | 683 | 669 | 733 | |||||||||||||||
| Unearned premiums |
175 | 189 | 203 | 213 | 225 | |||||||||||||||
| Other liabilities |
1,607 | 1,510 | 1,687 | 1,701 | 1,470 | |||||||||||||||
| Long-term borrowings |
1,601 | 1,600 | 1,611 | 1,622 | 1,773 | |||||||||||||||
| Separate account liabilities |
4,533 | 4,479 | 4,417 | 4,298 | 4,683 | |||||||||||||||
| Liabilities related to discontinued operations(1) |
2 | 7 | 8 | 6 | 4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
81,577 | 82,944 | 81,328 | 80,879 | 87,384 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Equity: |
||||||||||||||||||||
| Common stock |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
| Additional paid-in capital |
11,869 | 11,863 | 11,869 | 11,865 | 11,859 | |||||||||||||||
| Accumulated other comprehensive income (loss): |
||||||||||||||||||||
| Change in the discount rate used to measure future policy benefits |
(964 | ) | (1,628 | ) | (403 | ) | 115 | (3,167 | ) | |||||||||||
| All other |
(1,897 | ) | (1,225 | ) | (2,211 | ) | (2,747 | ) | (121 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total accumulated other comprehensive income (loss) |
(2,861 | ) | (2,853 | ) | (2,614 | ) | (2,632 | ) | (3,288 | ) | ||||||||||
| Retained earnings |
1,398 | 1,261 | 1,139 | 760 | 624 | |||||||||||||||
| Treasury stock, at cost |
(2,947 | ) | (2,833 | ) | (2,764 | ) | (2,734 | ) | (2,715 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Genworth Financial, Inc.’s stockholders’ equity |
7,460 | 7,439 | 7,631 | 7,260 | 6,481 | |||||||||||||||
| Noncontrolling interests |
807 | 793 | 755 | 758 | 751 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total equity |
8,267 | 8,232 | 8,386 | 8,018 | 7,232 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and equity |
$ | 89,844 | $ | 91,176 | $ | 89,714 | $ | 88,897 | $ | 94,616 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (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. |
11
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Consolidated Balance Sheet by Segment
(amounts in millions)
| June 30, 2023 | ||||||||||||||||||||
| Enact | Long-Term Care Insurance |
Life and Annuities |
Corporate and Other(1) |
Total | ||||||||||||||||
| ASSETS |
||||||||||||||||||||
| Cash and investments |
$ | 5,675 | $ | 35,113 | $ | 19,449 | $ | 1,292 | $ | 61,529 | ||||||||||
| Deferred acquisition costs and intangible assets |
39 | 932 | 1,317 | 9 | 2,297 | |||||||||||||||
| Reinsurance recoverable, net |
— | 7,454 | 11,595 | — | 19,049 | |||||||||||||||
| Deferred tax and other assets |
208 | 1,695 | 237 | 259 | (2) | 2,399 | ||||||||||||||
| Market risk benefit assets |
— | — | 37 | — | 37 | |||||||||||||||
| Separate account assets |
— | — | 4,533 | — | 4,533 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 5,922 | $ | 45,194 | $ | 37,168 | $ | 1,560 | $ | 89,844 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| LIABILITIES AND EQUITY |
||||||||||||||||||||
| Liabilities: |
||||||||||||||||||||
| Future policy benefits |
$ | — | $ | 42,661 | $ | 13,782 | $ | — | $ | 56,443 | ||||||||||
| Policyholder account balances |
— | — | 15,922 | — | 15,922 | |||||||||||||||
| Market risk benefit liabilities |
— | — | 666 | — | 666 | |||||||||||||||
| Liability for policy and contract claims |
490 | — | 131 | 7 | 628 | |||||||||||||||
| Unearned premiums |
175 | — | — | — | 175 | |||||||||||||||
| Other liabilities |
125 | 751 | 284 | 447 | 1,607 | |||||||||||||||
| Borrowings |
744 | — | — | 857 | 1,601 | |||||||||||||||
| Separate account liabilities |
— | — | 4,533 | — | 4,533 | |||||||||||||||
| Liabilities related to discontinued operations |
— | — | — | 2 | 2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
1,534 | 43,412 | 35,318 | 1,313 | 81,577 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Equity: |
||||||||||||||||||||
| Allocated equity, excluding accumulated other comprehensive income (loss) |
3,864 | 2,784 | 2,930 | 743 | 10,321 | |||||||||||||||
| Allocated accumulated other comprehensive income (loss) |
(283 | ) | (1,002 | ) | (1,080 | ) | (496 | ) | (2,861 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Genworth Financial, Inc.’s stockholders’ equity |
3,581 | 1,782 | 1,850 | 247 | 7,460 | |||||||||||||||
| Noncontrolling interests |
807 | — | — | — | 807 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total equity |
4,388 | 1,782 | 1,850 | 247 | 8,267 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and equity |
$ | 5,922 | $ | 45,194 | $ | 37,168 | $ | 1,560 | $ | 89,844 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) | Includes inter-segment eliminations and other businesses, including start-up growth initiatives and certain international businesses, that are managed outside the operating segments. |
| (2) | Deferred tax and other assets in Corporate and Other includes holding company deferred tax assets of $117 million (comprised of Genworth Financial, Inc. and Genworth Holdings). |
12
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Consolidated Balance Sheet by Segment
(amounts in millions)
| March 31, 2023 | ||||||||||||||||||||
| Enact | Long-Term Care Insurance |
Life and Annuities |
Corporate and Other(1) |
Total | ||||||||||||||||
| ASSETS |
||||||||||||||||||||
| Cash and investments |
$ | 5,611 | $ | 35,210 | $ | 20,112 | $ | 1,361 | $ | 62,294 | ||||||||||
| Deferred acquisition costs and intangible assets |
36 | 945 | 1,360 | 12 | 2,353 | |||||||||||||||
| Reinsurance recoverable, net |
— | 7,604 | 11,938 | — | 19,542 | |||||||||||||||
| Deferred tax and other assets |
194 | 1,761 | 214 | 311 | (2) | 2,480 | ||||||||||||||
| Market risk benefit assets |
— | — | 28 | — | 28 | |||||||||||||||
| Separate account assets |
— | — | 4,479 | — | 4,479 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 5,841 | $ | 45,520 | $ | 38,131 | $ | 1,684 | $ | 91,176 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| LIABILITIES AND EQUITY |
||||||||||||||||||||
| Liabilities: |
||||||||||||||||||||
| Future policy benefits |
$ | — | $ | 43,344 | $ | 14,187 | $ | — | $ | 57,531 | ||||||||||
| Policyholder account balances |
— | — | 16,202 | — | 16,202 | |||||||||||||||
| Market risk benefit liabilities |
— | — | 761 | — | 761 | |||||||||||||||
| Liability for policy and contract claims |
502 | — | 157 | 6 | 665 | |||||||||||||||
| Unearned premiums |
189 | — | — | — | 189 | |||||||||||||||
| Other liabilities |
100 | 676 | 287 | 447 | 1,510 | |||||||||||||||
| Borrowings |
743 | — | — | 857 | 1,600 | |||||||||||||||
| Separate account liabilities |
— | — | 4,479 | — | 4,479 | |||||||||||||||
| Liabilities related to discontinued operations |
— | — | — | 7 | 7 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
1,534 | 44,020 | 36,073 | 1,317 | 82,944 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Equity: |
||||||||||||||||||||
| Allocated equity, excluding accumulated other comprehensive income (loss) |
3,776 | 2,634 | 3,034 | 848 | 10,292 | |||||||||||||||
| Allocated accumulated other comprehensive income (loss) |
(262 | ) | (1,134 | ) | (976 | ) | (481 | ) | (2,853 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Genworth Financial, Inc.’s stockholders’ equity |
3,514 | 1,500 | 2,058 | 367 | 7,439 | |||||||||||||||
| Noncontrolling interests |
793 | — | — | — | 793 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total equity |
4,307 | 1,500 | 2,058 | 367 | 8,232 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and equity |
$ | 5,841 | $ | 45,520 | $ | 38,131 | $ | 1,684 | $ | 91,176 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) | Includes inter-segment eliminations and other businesses, including start-up growth initiatives and certain international businesses, that are managed outside the operating segments. |
| (2) | Deferred tax and other assets in Corporate and Other includes holding company deferred tax assets of $174 million (comprised of Genworth Financial, Inc. and Genworth Holdings). |
13
Enact Segment
14
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Adjusted Operating Income and Sales—Enact Segment
(amounts in millions)
| 2023 | 2022 | |||||||||||||||||||||||||||||||
| 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
| REVENUES: |
||||||||||||||||||||||||||||||||
| Premiums |
$ | 239 | $ | 235 | $ | 474 | $ | 233 | $ | 235 | $ | 238 | $ | 234 | $ | 940 | ||||||||||||||||
| Net investment income |
50 | 46 | 96 | 45 | 39 | 36 | 35 | 155 | ||||||||||||||||||||||||
| Net investment gains (losses) |
(13 | ) | — | (13 | ) | (1 | ) | — | (1 | ) | — | (2 | ) | |||||||||||||||||||
| Policy fees and other income |
1 | — | 1 | — | 1 | — | 1 | 2 | ||||||||||||||||||||||||
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| Total revenues |
277 | 281 | 558 | 277 | 275 | 273 | 270 | 1,095 | ||||||||||||||||||||||||
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| BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||
| Benefits and other changes in policy reserves |
(4 | ) | (11 | ) | (15 | ) | 18 | (40 | ) | (62 | ) | (10 | ) | (94 | ) | |||||||||||||||||
| Acquisition and operating expenses, net of deferrals |
52 | 52 | 104 | 60 | 55 | 58 | 54 | 227 | ||||||||||||||||||||||||
| Amortization of deferred acquisition costs and intangibles |
2 | 3 | 5 | 2 | 4 | 3 | 3 | 12 | ||||||||||||||||||||||||
| Interest expense |
13 | 13 | 26 | 14 | 12 | 13 | 13 | 52 | ||||||||||||||||||||||||
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| Total benefits and expenses |
63 | 57 | 120 | 94 | 31 | 12 | 60 | 197 | ||||||||||||||||||||||||
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| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
214 | 224 | 438 | 183 | 244 | 261 | 210 | 898 | ||||||||||||||||||||||||
| Provision for income taxes |
46 | 49 | 95 | 39 | 53 | 57 | 45 | 194 | ||||||||||||||||||||||||
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| INCOME FROM CONTINUING OPERATIONS |
168 | 175 | 343 | 144 | 191 | 204 | 165 | 704 | ||||||||||||||||||||||||
| Less: net income from continuing operations attributable to noncontrolling interests |
31 | 32 | 63 | 27 | 35 | 38 | 30 | 130 | ||||||||||||||||||||||||
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| INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS |
137 | 143 | 280 | 117 | 156 | 166 | 135 | 574 | ||||||||||||||||||||||||
| ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||||||||||
| Net investment (gains) losses, net(1) |
11 | — | 11 | 1 | — | 1 | — | 2 | ||||||||||||||||||||||||
| Expenses related to restructuring |
— | — | — | 3 | — | — | — | 3 | ||||||||||||||||||||||||
| Taxes on adjustments |
(2 | ) | — | (2 | ) | (1 | ) | — | — | — | (1 | ) | ||||||||||||||||||||
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| ADJUSTED OPERATING INCOME |
$ | 146 | $ | 143 | $ | 289 | $ | 120 | $ | 156 | $ | 167 | $ | 135 | $ | 578 | ||||||||||||||||
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| SALES: |
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| Primary New Insurance Written (NIW) |
$ | 15,083 | $ | 13,154 | $ | 28,237 | $ | 15,145 | $ | 15,069 | $ | 17,448 | $ | 18,823 | $ | 66,485 | ||||||||||||||||
| (1) | Net investment (gains) losses were adjusted for the portion of net investment losses attributable to noncontrolling interests of $2 million in the second quarter of 2023. |
15
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Primary New Insurance Written Metrics—Enact Segment
(amounts in millions)
| 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
| 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 |
|||||||||||||||||||||||||||||||||||||
| Payment Type |
||||||||||||||||||||||||||||||||||||||||||||||||
| Monthly |
$ | 14,774 | 98 | % | $ | 12,809 | 97 | % | $ | 13,745 | 91 | % | $ | 14,138 | 94 | % | $ | 16,169 | 93 | % | $ | 17,071 | 91 | % | ||||||||||||||||||||||||
| Single |
281 | 2 | 318 | 3 | 1,368 | 9 | 890 | 6 | 1,218 | 7 | 1,690 | 9 | ||||||||||||||||||||||||||||||||||||
| Other(1) |
28 | — | 27 | — | 32 | — | 41 | — | 61 | — | 62 | — | ||||||||||||||||||||||||||||||||||||
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| Total Primary |
$ | 15,083 | 100 | % | $ | 13,154 | 100 | % | $ | 15,145 | 100 | % | $ | 15,069 | 100 | % | $ | 17,448 | 100 | % | $ | 18,823 | 100 | % | ||||||||||||||||||||||||
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| Origination |
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| Purchase |
$ | 14,720 | 98 | % | $ | 12,761 | 97 | % | $ | 14,744 | 97 | % | $ | 14,634 | 97 | % | $ | 16,802 | 96 | % | $ | 17,326 | 92 | % | ||||||||||||||||||||||||
| Refinance |
363 | 2 | 393 | 3 | 401 | 3 | 435 | 3 | 646 | 4 | 1,497 | 8 | ||||||||||||||||||||||||||||||||||||
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| Total Primary |
$ | 15,083 | 100 | % | $ | 13,154 | 100 | % | $ | 15,145 | 100 | % | $ | 15,069 | 100 | % | $ | 17,448 | 100 | % | $ | 18,823 | 100 | % | ||||||||||||||||||||||||
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| FICO Scores |
||||||||||||||||||||||||||||||||||||||||||||||||
| Over 760 |
$ | 6,911 | 46 | % | $ | 6,004 | 46 | % | $ | 6,951 | 46 | % | $ | 6,948 | 46 | % | $ | 7,981 | 45 | % | $ | 8,359 | 45 | % | ||||||||||||||||||||||||
| 740 - 759 |
2,608 | 17 | 2,268 | 17 | 2,709 | 18 | 2,554 | 17 | 2,916 | 17 | 3,085 | 16 | ||||||||||||||||||||||||||||||||||||
| 720 - 739 |
2,097 | 14 | 1,817 | 14 | 2,226 | 15 | 2,106 | 14 | 2,530 | 15 | 2,515 | 13 | ||||||||||||||||||||||||||||||||||||
| 700 - 719 |
1,499 | 10 | 1,296 | 10 | 1,489 | 10 | 1,531 | 10 | 1,917 | 11 | 1,952 | 10 | ||||||||||||||||||||||||||||||||||||
| 680 - 699 |
1,060 | 7 | 954 | 7 | 1,035 | 7 | 1,085 | 7 | 1,099 | 6 | 1,316 | 7 | ||||||||||||||||||||||||||||||||||||
| 660 - 679(2) |
568 | 4 | 517 | 4 | 478 | 3 | 527 | 3 | 598 | 3 | 931 | 5 | ||||||||||||||||||||||||||||||||||||
| 640 - 659 |
260 | 2 | 229 | 2 | 189 | 1 | 234 | 2 | 297 | 2 | 486 | 3 | ||||||||||||||||||||||||||||||||||||
| 620 - 639 |
76 | — | 65 | — | 66 | — | 79 | 1 | 106 | 1 | 173 | 1 | ||||||||||||||||||||||||||||||||||||
| <620 |
4 | — | 4 | — | 2 | — | 5 | — | 4 | — | 6 | — | ||||||||||||||||||||||||||||||||||||
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| Total Primary |
$ | 15,083 | 100 | % | $ | 13,154 | 100 | % | $ | 15,145 | 100 | % | $ | 15,069 | 100 | % | $ | 17,448 | 100 | % | $ | 18,823 | 100 | % | ||||||||||||||||||||||||
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| Loan-To-Value Ratio |
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| 95.01% and above |
$ | 2,692 | 18 | % | $ | 2,106 | 16 | % | $ | 2,423 | 16 | % | $ | 1,741 | 11 | % | $ | 2,177 | 12 | % | $ | 3,146 | 17 | % | ||||||||||||||||||||||||
| 90.01% to 95.00% |
5,743 | 38 | 4,928 | 38 | 5,684 | 37 | 6,184 | 41 | 7,458 | 43 | 6,682 | 35 | ||||||||||||||||||||||||||||||||||||
| 85.01% to 90.00% |
4,753 | 31 | 4,390 | 33 | 4,971 | 33 | 5,094 | 34 | 5,207 | 30 | 5,620 | 30 | ||||||||||||||||||||||||||||||||||||
| 85.00% and below |
1,895 | 13 | 1,730 | 13 | 2,067 | 14 | 2,050 | 14 | 2,606 | 15 | 3,375 | 18 | ||||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||
| Total Primary |
$ | 15,083 | 100 | % | $ | 13,154 | 100 | % | $ | 15,145 | 100 | % | $ | 15,069 | 100 | % | $ | 17,448 | 100 | % | $ | 18,823 | 100 | % | ||||||||||||||||||||||||
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| Debt-To-Income Ratio |
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| 45.01% and above |
$ | 4,467 | 30 | % | $ | 3,538 | 27 | % | $ | 4,294 | 28 | % | $ | 3,728 | 25 | % | $ | 4,067 | 23 | % | $ | 4,452 | 24 | % | ||||||||||||||||||||||||
| 38.01% to 45.00% |
5,214 | 34 | 4,940 | 38 | 5,518 | 37 | 5,681 | 38 | 6,436 | 37 | 6,361 | 34 | ||||||||||||||||||||||||||||||||||||
| 38.00% and below |
5,402 | 36 | 4,676 | 35 | 5,333 | 35 | 5,660 | 37 | 6,945 | 40 | 8,010 | 42 | ||||||||||||||||||||||||||||||||||||
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| Total Primary |
$ | 15,083 | 100 | % | $ | 13,154 | 100 | % | $ | 15,145 | 100 | % | $ | 15,069 | 100 | % | $ | 17,448 | 100 | % | $ | 18,823 | 100 | % | ||||||||||||||||||||||||
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| (1) | Includes loans with annual and split payment types. |
| (2) | Loans with unknown FICO scores are included in the 660-679 category. |
16
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Other Metrics—Enact Segment
(dollar amounts in millions)
| 2023 | 2022 | |||||||||||||||||||||||||||||||
| 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
| Primary Insurance In-Force(1) |
$ | 257,816 | $ | 252,516 | $ | 248,262 | $ | 241,813 | $ | 237,563 | $ | 231,853 | ||||||||||||||||||||
| Risk In-Force |
||||||||||||||||||||||||||||||||
| Primary(2) |
$ | 65,714 | $ | 64,106 | $ | 62,791 | $ | 61,124 | $ | 59,911 | $ | 58,295 | ||||||||||||||||||||
| Pool |
73 | 76 | 79 | 84 | 89 | 97 | ||||||||||||||||||||||||||
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| Total Risk In-Force |
$ | 65,787 | $ | 64,182 | $ | 62,870 | $ | 61,208 | $ | 60,000 | $ | 58,392 | ||||||||||||||||||||
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| Expense Ratio(3) |
23 | % | 23 | % | 23 | % | 27 | % | 25 | % | 26 | % | 24 | % | 23 | % | ||||||||||||||||
| Primary Persistency Rate |
84 | % | 85 | % | 85 | % | 86 | % | 82 | % | 80 | % | 76 | % | 85 | % | ||||||||||||||||
| Combined Risk To Capital Ratio(4) |
11.8:1 | 12.6:1 | 12.8:1 | 12.3:1 | 12.6:1 | 12.0:1 | ||||||||||||||||||||||||||
| EMICO Risk To Capital Ratio(4),(5) |
11.9:1 | 12.7:1 | 12.9:1 | 12.3:1 | 12.6:1 | 12.1:1 | ||||||||||||||||||||||||||
| PMIERs Available Assets(6) |
$ | 5,093 | $ | 5,357 | $ | 5,206 | $ | 5,292 | $ | 5,147 | $ | 5,222 | ||||||||||||||||||||
| PMIERs Required Assets(6) |
$ | 3,135 | $ | 3,259 | $ | 3,156 | $ | 3,043 | $ | 3,100 | $ | 2,961 | ||||||||||||||||||||
| Available Assets Above PMIERs Requirements(6) |
$ | 1,958 | $ | 2,098 | $ | 2,050 | $ | 2,249 | $ | 2,047 | $ | 2,261 | ||||||||||||||||||||
| PMIERs Sufficiency Ratio(6) |
162 | % | 164 | % | 165 | % | 174 | % | 166 | % | 176 | % | ||||||||||||||||||||
| Average Primary Loan Size (in thousands) |
$ | 265 | $ | 262 | $ | 259 | $ | 255 | $ | 251 | $ | 246 | ||||||||||||||||||||
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. The PMIERs sufficiency ratios for the four quarters of 2022 did not take into consideration the impact of restrictions previously imposed by the government-sponsored enterprises on EMICO. |
17
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Loss Metrics—Enact Segment
(amounts in millions)
| 2023 | 2022 | |||||||||||||||||||||||||||||||
| 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
| Average Paid Claim (in thousands)(1) |
$ | 46.6 | $ | 46.9 | $ | 48.7 | $ | 42.2 | $ | 50.1 | $ | 51.6 | ||||||||||||||||||||
| Average Reserve Per Primary Delinquency (in thousands)(2) |
$ | 25.0 | $ | 24.8 | $ | 24.0 | $ | 25.2 | $ | 27.0 | $ | 26.2 | ||||||||||||||||||||
| Reserves: |
||||||||||||||||||||||||||||||||
| Direct primary case |
$ | 452 | $ | 462 | $ | 479 | $ | 476 | $ | 526 | $ | 591 | ||||||||||||||||||||
| All other(3) |
38 | 40 | 40 | 34 | 33 | 34 | ||||||||||||||||||||||||||
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| Total Reserves |
$ | 490 | $ | 502 | $ | 519 | $ | 510 | $ | 559 | $ | 625 | ||||||||||||||||||||
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| Beginning Reserves |
$ | 502 | $ | 519 | $ | 519 | $ | 510 | $ | 559 | $ | 625 | $ | 641 | $ | 641 | ||||||||||||||||
| Paid claims |
(8 | ) | (6 | ) | (14 | ) | (9 | ) | (9 | ) | (4 | ) | (6 | ) | (28 | ) | ||||||||||||||||
| Increase (decrease) in reserves |
(4 | ) | (11 | ) | (15 | ) | 18 | (40 | ) | (62 | ) | (10 | ) | (94 | ) | |||||||||||||||||
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| Ending Reserves |
$ | 490 | $ | 502 | $ | 490 | $ | 519 | $ | 510 | $ | 559 | $ | 625 | $ | 519 | ||||||||||||||||
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| Loss Ratio(4) |
(2 | )% | (5 | )% | (3 | )% | 8 | % | (17 | )% | (26 | )% | (4 | )% | (10 | )% | ||||||||||||||||
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 and fourth quarters of 2022 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. |
18
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Delinquency Metrics—Enact Segment
(dollar amounts in millions)
| 2023 | 2022 | |||||||||||||||||||||||||||||||
| 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
| Primary Loans |
||||||||||||||||||||||||||||||||
| Primary loans in-force |
973,280 | 965,544 | 960,306 | 949,052 | 946,891 | 941,689 | ||||||||||||||||||||||||||
| Primary delinquent loans |
18,065 | 18,633 | 19,943 | 18,856 | 19,513 | 22,571 | ||||||||||||||||||||||||||
| Primary delinquency rate |
1.86 | % | 1.93 | % | 2.08 | % | 1.99 | % | 2.06 | % | 2.40 | % | ||||||||||||||||||||
| Beginning Number of Primary Delinquencies |
18,633 | 19,943 | 19,943 | 18,856 | 19,513 | 22,571 | 24,820 | 24,820 | ||||||||||||||||||||||||
| New delinquencies |
9,205 | 9,599 | 18,804 | 10,304 | 9,121 | 7,847 | 8,724 | 35,996 | ||||||||||||||||||||||||
| Delinquency cures |
(9,609 | ) | (10,771 | ) | (20,380 | ) | (9,024 | ) | (9,588 | ) | (10,806 | ) | (10,860 | ) | (40,278 | ) | ||||||||||||||||
| Paid claims |
(156 | ) | (126 | ) | (282 | ) | (190 | ) | (187 | ) | (90 | ) | (107 | ) | (574 | ) | ||||||||||||||||
| Rescissions and claim denials |
(8 | ) | (12 | ) | (20 | ) | (3 | ) | (3 | ) | (9 | ) | (6 | ) | (21 | ) | ||||||||||||||||
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|||||||||||||||||
| Ending Number of Primary Delinquencies |
18,065 | 18,633 | 18,065 | 19,943 | 18,856 | 19,513 | 22,571 | 19,943 | ||||||||||||||||||||||||
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| Composition of Cures |
||||||||||||||||||||||||||||||||
| Reported delinquent and cured-intraquarter |
1,661 | 2,016 | 1,489 | 1,598 | 1,306 | 1,581 | ||||||||||||||||||||||||||
| Number of missed payments delinquent prior to cure: |
||||||||||||||||||||||||||||||||
| 3 payments or less |
4,516 | 5,238 | 4,179 | 3,719 | 4,037 | 3,902 | ||||||||||||||||||||||||||
| 4 - 11 payments |
2,448 | 2,431 | 2,001 | 2,279 | 2,484 | 2,315 | ||||||||||||||||||||||||||
| 12 payments or more |
984 | 1,086 | 1,355 | 1,992 | 2,979 | 3,062 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total |
9,609 | 10,771 | 9,024 | 9,588 | 10,806 | 10,860 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Primary Delinquencies by Missed Payment Status |
||||||||||||||||||||||||||||||||
| 3 payments or less |
8,162 | 7,876 | 8,920 | 7,446 | 6,442 | 6,837 | ||||||||||||||||||||||||||
| 4 - 11 payments |
6,229 | 6,714 | 6,466 | 6,119 | 6,372 | 6,875 | ||||||||||||||||||||||||||
| 12 payments or more |
3,674 | 4,043 | 4,557 | 5,291 | 6,699 | 8,859 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Primary Delinquencies |
18,065 | 18,633 | 19,943 | 18,856 | 19,513 | 22,571 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| June 30, 2023 | ||||||||||||||||||||||||||||||||
| Direct Primary Case Reserves(1) and Percentage Reserved by Payment Status |
Direct Primary Case Reserves |
Risk In-Force |
Reserves as % of Risk In-Force |
|||||||||||||||||||||||||||||
| 3 payments or less in default |
$ | 70 | $ | 488 | 14 | % | ||||||||||||||||||||||||||
| 4 - 11 payments in default |
186 | 409 | 46 | % | ||||||||||||||||||||||||||||
| 12 payments or more in default |
196 | 205 | 95 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total |
$ | 452 | $ | 1,102 | 41 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| December 31, 2022 | ||||||||||||||||||||||||||||||||
| Direct Primary Case Reserves(1) and Percentage Reserved by Payment Status |
Direct Primary Case Reserves |
Risk In-Force |
Reserves as % of Risk In-Force |
|||||||||||||||||||||||||||||
| 3 payments or less in default |
$ | 69 | $ | 509 | 14 | % | ||||||||||||||||||||||||||
| 4 - 11 payments in default |
166 | 390 | 43 | % | ||||||||||||||||||||||||||||
| 12 payments or more in default |
244 | 248 | 98 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Total |
$ | 479 | $ | 1,147 | 42 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| (1) | Direct primary case reserves exclude loss adjustment expenses, pool, incurred but not reported and reinsurance reserves. |
19
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Portfolio Quality Metrics—Enact Segment
(amounts in millions)
| June 30, 2023 | ||||||||||||||||||||||||
| 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 |
22 | % | $ | 6,135 | 2 | % | $ | 1,581 | 2 | % | 8.40 | % | ||||||||||||
| 2009-2015 |
6 | 4,296 | 2 | 1,138 | 2 | 3.90 | % | |||||||||||||||||
| 2016 |
5 | 5,289 | 2 | 1,418 | 2 | 2.97 | % | |||||||||||||||||
| 2017 |
6 | 5,878 | 2 | 1,549 | 2 | 3.40 | % | |||||||||||||||||
| 2018 |
7 | 6,270 | 2 | 1,601 | 3 | 4.00 | % | |||||||||||||||||
| 2019 |
10 | 15,026 | 6 | 3,831 | 6 | 2.47 | % | |||||||||||||||||
| 2020 |
15 | 49,522 | 19 | 12,827 | 20 | 1.39 | % | |||||||||||||||||
| 2021 |
19 | 76,381 | 30 | 19,245 | 29 | 1.27 | % | |||||||||||||||||
| 2022 |
10 | 61,390 | 24 | 15,392 | 23 | 0.97 | % | |||||||||||||||||
| 2023 |
— | 27,629 | 11 | 7,132 | 11 | 0.12 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
100 | % | $ | 257,816 | 100 | % | $ | 65,714 | 100 | % | 1.86 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| June 30, 2023 | December 31, 2022 | June 30, 2022 | ||||||||||||||||||||||
| 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 |
$ | 12,086 | 18 | % | $ | 11,136 | 18 | % | $ | 10,647 | 18 | % | ||||||||||||
| 90.01% to 95.00% |
31,220 | 48 | 30,079 | 48 | 28,838 | 48 | ||||||||||||||||||
| 85.01% to 90.00% |
18,518 | 28 | 17,621 | 28 | 16,517 | 27 | ||||||||||||||||||
| 85.00% and below |
3,890 | 6 | 3,955 | 6 | 3,909 | 7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | 65,714 | 100 | % | $ | 62,791 | 100 | % | $ | 59,911 | 100 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| June 30, 2023 | December 31, 2022 | June 30, 2022 | ||||||||||||||||||||||
| 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 |
$ | 27,305 | 42 | % | $ | 25,807 | 41 | % | $ | 24,252 | 40 | % | ||||||||||||
| 740 - 759 |
10,749 | 16 | 10,154 | 16 | 9,559 | 16 | ||||||||||||||||||
| 720 - 739 |
9,368 | 14 | 8,931 | 14 | 8,484 | 14 | ||||||||||||||||||
| 700 - 719 |
7,516 | 12 | 7,317 | 12 | 7,129 | 12 | ||||||||||||||||||
| 680 - 699 |
5,543 | 9 | 5,428 | 9 | 5,329 | 9 | ||||||||||||||||||
| 660 - 679(2) |
2,850 | 4 | 2,767 | 5 | 2,728 | 5 | ||||||||||||||||||
| 640 - 659 |
1,558 | 2 | 1,540 | 2 | 1,547 | 3 | ||||||||||||||||||
| 620 - 639 |
653 | 1 | 665 | 1 | 687 | 1 | ||||||||||||||||||
| <620 |
172 | — | 182 | — | 196 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | 65,714 | 100 | % | $ | 62,791 | 100 | % | $ | 59,911 | 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. |
20
Long-Term Care Insurance Segment
21
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Adjusted Operating Income (Loss)—Long-Term Care Insurance Segment
(amounts in millions)
| 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||
| 2Q | 1Q | Total | 4Q(1) | 3Q | 2Q | 1Q | Total | Full Year(2) | ||||||||||||||||||||||||||||
| REVENUES: |
||||||||||||||||||||||||||||||||||||
| Premiums |
$ | 611 | $ | 616 | $ | 1,227 | $ | 639 | $ | 637 | $ | 617 | $ | 607 | $ | 2,500 | $ | 2,561 | ||||||||||||||||||
| Net investment income |
470 | 473 | 943 | 470 | 497 | 486 | 447 | 1,900 | 2,027 | |||||||||||||||||||||||||||
| Net investment gains (losses) |
62 | 9 | 71 | 20 | (47 | ) | 5 | 41 | 19 | 257 | ||||||||||||||||||||||||||
| Policy fees and other income |
— | — | — | — | — | — | — | — | 1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total revenues |
1,143 | 1,098 | 2,241 | 1,129 | 1,087 | 1,108 | 1,095 | 4,419 | 4,846 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
| Benefits and other changes in policy reserves |
941 | 944 | 1,885 | 965 | 956 | 942 | 925 | 3,788 | 3,808 | |||||||||||||||||||||||||||
| Liability remeasurement (gains) losses |
61 | (32 | ) | 29 | (255 | ) | 3 | 23 | (88 | ) | (317 | ) | 68 | |||||||||||||||||||||||
| Acquisition and operating expenses, net of deferrals |
108 | 119 | 227 | 100 | 122 | 95 | 96 | 413 | 451 | |||||||||||||||||||||||||||
| Amortization of deferred acquisition costs and intangibles |
18 | 18 | 36 | 18 | 19 | 18 | 19 | 74 | 76 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total benefits and expenses |
1,128 | 1,049 | 2,177 | 828 | 1,100 | 1,078 | 952 | 3,958 | 4,403 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
15 | 49 | 64 | 301 | (13 | ) | 30 | 143 | 461 | 443 | ||||||||||||||||||||||||||
| Provision (benefit) for income taxes |
10 | 18 | 28 | 79 | (1 | ) | 9 | 38 | 125 | 123 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS |
5 | 31 | 36 | 222 | (12 | ) | 21 | 105 | 336 | 320 | ||||||||||||||||||||||||||
| ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS: |
||||||||||||||||||||||||||||||||||||
| Net investment (gains) losses |
(62 | ) | (9 | ) | (71 | ) | (20 | ) | 47 | (5 | ) | (41 | ) | (19 | ) | (257 | ) | |||||||||||||||||||
| Expenses related to restructuring |
1 | (1 | ) | — | (2 | ) | — | 1 | — | (1 | ) | 12 | ||||||||||||||||||||||||
| Taxes on adjustments |
13 | 2 | 15 | 4 | (9 | ) | — | 9 | 4 | 51 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| ADJUSTED OPERATING INCOME (LOSS) |
$ | (43 | ) | $ | 23 | $ | (20 | ) | $ | 204 | $ | 26 | $ | 17 | $ | 73 | $ | 320 | $ | 126 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Liability remeasurement (gains) losses: |
||||||||||||||||||||||||||||||||||||
| Cash flow assumption updates |
$ | (24 | ) | $ | 21 | $ | (3 | ) | $ | (303 | ) | $ | (10 | ) | $ | (20 | ) | $ | (2 | ) | $ | (335 | ) | $ | 227 | |||||||||||
| Actual to expected experience |
85 | (53 | ) | 32 | 48 | 13 | 43 | (86 | ) | 18 | (159 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total |
$ | 61 | $ | (32 | ) | $ | 29 | $ | (255 | ) | $ | 3 | $ | 23 | $ | (88 | ) | $ | (317 | ) | $ | 68 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Ratio of the liability remeasurement (gains) losses to beginning reserves(3) |
0.15 | % | (0.08 | )% | 0.07 | % | (0.62 | )% | — | % | 0.06 | % | (0.22 | )% | (0.78 | )% | 0.17 | % | ||||||||||||||||||
| (1) | In the fourth quarter of 2022, the liability remeasurement gain of $255 million in the company’s long-term care insurance business reflected favorable assumption updates of $303 million, largely from an update to legal settlement elections attributable to the inclusion of a second legal settlement and the resulting expected reserve reduction. This settlement, comprised of PCS I and PCS II policies, represents approximately 15% of the overall block and impacts older unprofitable capped cohorts. While a favorable assumption impact was recognized in the fourth quarter of 2022, differences between actual experience and expectations will flow through earnings in subsequent periods. The company’s long-term care insurance business also updated its interest rate assumptions to reflect the impact of the higher interest rate environment. |
| (2) | In 2021, unfavorable assumption updates of $227 million in the fourth quarter of 2021 related primarily to an update to the benefit utilization trend, which drove significant updates to the in-force rate action plan and related assumptions. Given the expected future increases in cost of care, the company expected its long-term benefit utilization to trend higher than previously assumed. |
| (3) | The ratio of the liability remeasurement (gains) losses to beginning reserves is calculated by dividing the liability remeasurement (gains) losses by the beginning liability for future policy benefits at the original discount rate as of each applicable quarter. |
22
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Statutory Impact of In-Force Rate Actions—Long-Term Care Insurance Segment
(amounts in millions)
| 2023 | 2022 | |||||||||||||||||||||||||||||||
| 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||
| Impact of in-force rate actions on pre-tax statutory earnings(1) |
||||||||||||||||||||||||||||||||
| Premiums, premium tax, commissions and other expenses, net(2) |
$ | 224 | $ | 219 | $ | 443 | $ | 224 | $ | 220 | $ | 207 | $ | 192 | $ | 843 | ||||||||||||||||
| Reserve changes(2) |
104 | 94 | 198 | 124 | 120 | 113 | 132 | 489 | ||||||||||||||||||||||||
| Settlement impacts - reserve changes |
97 | 93 | 190 | 78 | 9 | 19 | 148 | 254 | ||||||||||||||||||||||||
| Settlement impacts - litigation expenses and settlement payments |
(54 | ) | (56 | ) | (110 | ) | (45 | ) | (10 | ) | (6 | ) | (43 | ) | (104 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Settlement impacts, net |
43 | 37 | 80 | 33 | (1 | ) | 13 | 105 | 150 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Statutory earnings from in-force rate actions |
$ | 371 | $ | 350 | $ | 721 | $ | 381 | $ | 339 | $ | 333 | $ | 429 | $ | 1,482 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| (1) | Includes all implemented in-force rate actions since 2012. |
| (2) | Earned premium and reserve change estimates for statutory earnings reflect certain simplifying assumptions that may vary materially from actual historical results, including but not limited to, a uniform rate of coinsurance and premium taxes in addition to consistent policyholder behavior over time. Actual behavior may differ significantly from these assumptions and these impacts exclude reserve updates. |
23
Life and Annuities Segment
24
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Adjusted Operating Income (Loss)—Life and Annuities Segment
(amounts in millions)
| 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||
| 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | Full Year | ||||||||||||||||||||||||||||
| REVENUES: |
||||||||||||||||||||||||||||||||||||
| Premiums |
$ | 50 | $ | 62 | $ | 112 | $ | 45 | $ | 55 | $ | 60 | $ | 74 | $ | 234 | $ | (136 | ) | |||||||||||||||||
| Net investment income |
261 | 264 | 525 | 268 | 271 | 265 | 279 | 1,083 | 1,195 | |||||||||||||||||||||||||||
| Net investment gains (losses) |
(7 | ) | (10 | ) | (17 | ) | (3 | ) | (15 | ) | — | 14 | (4 | ) | 74 | |||||||||||||||||||||
| Policy fees and other income |
165 | 163 | 328 | 167 | 169 | 164 | 169 | 669 | 718 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total revenues |
469 | 479 | 948 | 477 | 480 | 489 | 536 | 1,982 | 1,851 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
| Benefits and other changes in policy reserves |
240 | 246 | 486 | 226 | 247 | (108 | ) | 255 | 620 |
|
688 |
| ||||||||||||||||||||||||
| Liability remeasurement (gains) losses |
9 | 17 | 26 | (12 | ) | 14 | 1 | 24 | 27 | 134 | ||||||||||||||||||||||||||
| Changes in fair value of market risk benefits and associated hedges |
(19 | ) | 17 | (2 | ) | (56 | ) | (27 | ) | 20 | (41 | ) | (104 | ) | (160 | ) | ||||||||||||||||||||
| Interest credited |
126 | 126 | 252 | 125 | 128 | 126 | 125 | 504 | 511 | |||||||||||||||||||||||||||
| Acquisition and operating expenses, net of deferrals |
51 | 53 | 104 | 54 | 57 | 416 | 77 | 604 | 233 | |||||||||||||||||||||||||||
| Amortization of deferred acquisition costs and intangibles |
44 | 51 | 95 | 54 | 57 | 63 | 66 | 240 | 291 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total benefits and expenses |
451 | 510 | 961 | 391 | 476 | 518 | 506 | 1,891 | |
1,697 |
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
18 | (31 | ) | (13 | ) | 86 | 4 | (29 | ) | 30 | 91 | |
154 |
| ||||||||||||||||||||||
| Provision (benefit) for income taxes |
3 | (7 | ) | (4 | ) | 17 | — | (7 | ) | 6 | 16 | 30 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS |
15 | (24 | ) | (9 | ) | 69 | 4 | (22 | ) | 24 | 75 | |
124 |
| ||||||||||||||||||||||
| ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS: |
||||||||||||||||||||||||||||||||||||
| Net investment (gains) losses |
7 | 10 | 17 | 3 | 15 | — | (14 | ) | 4 | (74 | ) | |||||||||||||||||||||||||
| Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges(1) |
(23 | ) | 14 | (9 | ) | (64 | ) | (32 | ) | 8 | (54 | ) | (142 | ) | (210 | ) | ||||||||||||||||||||
| Expenses related to restructuring |
— | — | — | (1 | ) | — | — | — | (1 | ) | 5 | |||||||||||||||||||||||||
| Pension plan termination costs |
— | — | — | 2 | 6 | — | — | 8 | — | |||||||||||||||||||||||||||
| Taxes on adjustments |
3 | (4 | ) | (1 | ) | 14 | 1 | (1 | ) | 14 | 28 | 59 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| ADJUSTED OPERATING INCOME (LOSS) |
$ | 2 | $ | (4 | ) | $ | (2 | ) | $ | 23 | $ | (6 | ) | $ | (15 | ) | $ | (30 | ) | $ | (28 | ) | $ | (96 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
(1) Changes in fair value of market risk benefits and associated hedges were adjusted to exclude changes in reserves, attributed fees and benefit payments as reconciled below:
|
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| Changes in fair value of market risk benefits and associated hedges |
$ | (19 | ) | $ | 17 | $ | (2 | ) | $ | (56 | ) | $ | (27 | ) | $ | 20 | $ | (41 | ) | $ | (104 | ) | $ | (160 | ) | |||||||||||
| Adjustment for changes in reserves, attributed fees and benefit payments |
(4 | ) | (3 | ) | (7 | ) | (8 | ) | (5 | ) | (12 | ) | (13 | ) | (38 | ) | (50 | ) | ||||||||||||||||||
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| Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges |
$ | (23 | ) | $ | 14 | $ | (9 | ) | $ | (64 | ) | $ | (32 | ) | $ | 8 | $ | (54 | ) | $ | (142 | ) | $ | (210 | ) | |||||||||||
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25
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Adjusted Operating Income (Loss)—Life and Annuities Segment—Life Insurance
(amounts in millions)
| 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||
| 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | Full Year | ||||||||||||||||||||||||||||
| REVENUES: |
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| Premiums |
$ | 50 | $ | 62 | $ | 112 | $ | 45 | $ | 55 | $ | 60 | $ | 74 | $ | 234 | $ | (136 | ) | |||||||||||||||||
| Net investment income |
165 | 164 | 329 | 167 | 166 | 164 | 164 | 661 | 667 | |||||||||||||||||||||||||||
| Net investment gains (losses) |
(1 | ) | (2 | ) | (3 | ) | 1 | (7 | ) | 2 | 9 | 5 | 74 | |||||||||||||||||||||||
| Policy fees and other income |
136 | 134 | 270 | 138 | 138 | 133 | 134 | 543 | 567 | |||||||||||||||||||||||||||
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| Total revenues |
350 | 358 | 708 | 351 | 352 | 359 | 381 | 1,443 | 1,172 | |||||||||||||||||||||||||||
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| BENEFITS AND EXPENSES: |
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| Benefits and other changes in policy reserves |
197 | 199 | 396 | 181 | 197 | 217 | 203 | 798 | 486 | |||||||||||||||||||||||||||
| Liability remeasurement (gains) losses |
7 | 18 | 25 | (10 | ) | 16 | 4 | 22 | 32 | 109 | ||||||||||||||||||||||||||
| Interest credited |
98 | 98 | 196 | 97 | 98 | 96 | 94 | 385 | 373 | |||||||||||||||||||||||||||
| Acquisition and operating expenses, net of deferrals |
34 | 36 | 70 | 39 | 40 | 32 | 56 | 167 | 136 | |||||||||||||||||||||||||||
| Amortization of deferred acquisition costs and intangibles |
36 | 44 | 80 | 45 | 49 | 55 | 57 | 206 | 254 | |||||||||||||||||||||||||||
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| Total benefits and expenses |
372 | 395 | 767 | 352 | 400 | 404 | 432 | 1,588 | 1,358 | |||||||||||||||||||||||||||
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| LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(22 | ) | (37 | ) | (59 | ) | (1 | ) | (48 | ) | (45 | ) | (51 | ) | (145 | ) | (186 | ) | ||||||||||||||||||
| Benefit for income taxes |
(5 | ) | (8 | ) | (13 | ) | (1 | ) | (10 | ) | (10 | ) | (11 | ) | (32 | ) | (40 | ) | ||||||||||||||||||
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| LOSS FROM CONTINUING OPERATIONS |
(17 | ) | (29 | ) | (46 | ) | — | (38 | ) | (35 | ) | (40 | ) | (113 | ) | (146 | ) | |||||||||||||||||||
| ADJUSTMENTS TO LOSS FROM CONTINUING OPERATIONS: |
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| Net investment (gains) losses |
1 | 2 | 3 | (1 | ) | 7 | (2 | ) | (9 | ) | (5 | ) | (74 | ) | ||||||||||||||||||||||
| Expenses related to restructuring |
— | — | — | (1 | ) | — | — | — | (1 | ) | 4 | |||||||||||||||||||||||||
| Pension plan termination costs |
— | — | — | 2 | 6 | — | — | 8 | — | |||||||||||||||||||||||||||
| Taxes on adjustments |
(1 | ) | — | (1 | ) | 1 | (3 | ) | — | 2 | — | 15 | ||||||||||||||||||||||||
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