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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

  

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

  

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

  

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

  

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

 

Dear Investor,

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

 

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 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

 

Financial Highlights

(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        
 

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
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

   $ 7,460     $ 7,439     $ 7,631     $ 7,260     $ 6,481  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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
 

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
                   

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

     473.2       482.7        

Potentially dilutive securities:

          

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

     4.9       6.4        
  

 

 

   

 

 

       

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

     478.1       489.1        
  

 

 

   

 

 

       

 

(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:

                     

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     1,892        1,854       3,746       1,867       1,848       1,887       1,893       7,495       7,822  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                     

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     1,671        1,645       3,316       1,338       1,628       1,627       1,537       6,130       6,710  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ 137      $ 122     $ 259     $ 381     $ 136     $ 159     $ 240     $ 916     $ 850  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

                     

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ 137      $ 122     $ 259     $ 381     $ 136     $ 159     $ 240     $ 916     $ 850  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

Earnings Per Share Data:

                   

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

                   

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

                   

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

                   

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 85      $ 144     $ 229     $ 338     $ 158     $ 153     $ 169     $ 818     $ 474  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Life and Annuities segment

     2        (4     (2     23       (6     (15     (30     (28     (96
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Corporate and Other

     (20      (18     (38     (9     (18     (16     (9     (52     (76
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 85      $ 144     $ 229     $ 338     $ 158     $ 153     $ 169     $ 818     $ 474  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

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

 

Consolidated Balance Sheets

(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

 

Consolidated Balance Sheets

(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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     277        281       558       277       275       273       270       1,095  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     63        57       120       94       31       12       60       197  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 146      $ 143     $ 289     $ 120     $ 156     $ 167     $ 135     $ 578  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                       

SALES:

                 

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        —    
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 15,083        100    $ 13,154        100   $ 15,145        100   $ 15,069        100   $ 17,448        100   $ 18,823        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Origination

                                 

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  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 15,083        100    $ 13,154        100   $ 15,145        100   $ 15,069        100   $ 17,448        100   $ 18,823        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

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        —    
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 15,083        100    $ 13,154        100   $ 15,145        100   $ 15,069        100   $ 17,448        100   $ 18,823        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Loan-To-Value Ratio

                                 

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  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 15,083        100    $ 13,154        100   $ 15,145        100   $ 15,069        100   $ 17,448        100   $ 18,823        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Debt-To-Income Ratio

                                 

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  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 15,083        100    $ 13,154        100   $ 15,145        100   $ 15,069        100   $ 17,448        100   $ 18,823        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
                                           

 

(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    
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total Risk In-Force

  $ 65,787     $ 64,182       $ 62,870     $ 61,208     $ 60,000     $ 58,392    
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   
   

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    
  

 

 

    

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total Reserves

   $ 490      $ 502       $ 519     $ 510     $ 559     $ 625    
  

 

 

    

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   
 

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
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending Reserves

   $ 490      $ 502     $ 490     $ 519     $ 510     $ 559     $ 625     $ 519  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending Number of Primary Delinquencies

    18,065       18,633       18,065       19,943       18,856       19,513       22,571       19,943  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

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:

 

  

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
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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:

                     

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     350        358       708       351       352       359       381       1,443       1,172  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                     

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     372        395       767       352       400       404       432       1,588       1,358  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS

     (17      (29     (46     —         (38     (35     (40     (113     (146
 

ADJUSTMENTS TO LOSS FROM CONTINUING OPERATIONS:

                     

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  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

   $ (17    $ (27   $ (44   $ 1     $ (28   $ (37   $ (47   $ (111   $ (201
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

 

26


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2023

 

Adjusted Operating Income—Life and Annuities Segment—Fixed Annuities

(amounts in millions)

 

     2023     2022     2021  
     2Q      1Q     Total     4Q     3Q     2Q     1Q     Total     Full Year  

REVENUES:

                     

Net investment income

   $ 87      $ 91     $ 178     $ 93     $ 96     $ 93     $ 108     $ 390     $ 498  

Net investment gains (losses)

     (5      (8     (13     (4     (7     (2     5       (8     (2

Policy fees and other income

     2        2       4       1       2       2       2       7       9  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     84        85       169       90       91       93       115       389       505  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                     

Benefits and other changes in policy reserves(1)

     35        39       74       37       42       (332     46       (207     188  

Liability remeasurement (gains) losses

     2        (1     1       (2     (2     (3     2       (5     25  

Changes in fair value of market risk benefits and associated hedges

     (4      8       4       —         (15     (12     (13     (40     (21

Interest credited

     27        27       54       27       28       29       30       114       133  

Acquisition and operating expenses, net of deferrals(1)

     7        8       15       7       7       372       9       395       44  

Amortization of deferred acquisition costs and intangibles

     4        3       7       4       4       4       4       16       17  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     71        84       155       73       64       58       78       273       386  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     13        1       14       17       27       35       37       116       119  

Provision for income taxes

     3        —         3       4       6       7       8       25       25  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS

     10        1       11       13       21       28       29       91       94  
 

ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS:

                     

Net investment (gains) losses

     5        8       13       4       7       2       (5     8       2  

Changes in fair value of market risk benefits attributable to interest rates, equity markets and
associated hedges(2)

     (5      8       3       (3     (14     (13     (15     (45     (17

Expenses related to restructuring

     —          —         —         —         —         —         —         —         1  

Taxes on adjustments

     —          (3     (3     —         1       3       4       8       3  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 10      $ 14     $ 24     $ 14     $ 15     $ 20     $ 13     $ 62     $ 83  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

 

(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)  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:

   

   

Changes in fair value of market risk benefits and associated hedges

   $ (4    $ 8     $ 4     $ —       $ (15   $ (12   $ (13   $ (40   $ (21

Adjustment for changes in reserves, attributed fees and benefit payments

     (1      —         (1     (3     1       (1     (2     (5     4  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges

   $ (5    $ 8     $ 3     $ (3   $ (14   $ (13   $ (15   $ (45   $ (17
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

27


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2023

Adjusted Operating Income—Life and Annuities Segment—Variable Annuities

(amounts in millions)

 

     2023     2022     2021  
     2Q      1Q     Total     4Q     3Q     2Q     1Q     Total     Full Year  

REVENUES:

                     

Net investment income

   $ 9      $ 9     $ 18     $ 8     $ 9     $ 8     $ 7     $ 32     $ 30  

Net investment gains (losses)

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

Policy fees and other income

     27        27       54       28       29       29       33       119       142  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     35        36       71       36       37       37       40       150       174  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                     

Benefits and other changes in policy reserves

     8        8       16       8       8       7       6       29       14  

Changes in fair value of market risk benefits and associated hedges

     (15      9       (6     (56     (12     32       (28     (64     (139

Interest credited

     1        1       2       1       2       1       1       5       5  

Acquisition and operating expenses, net of deferrals

     10        9       19       8       10       12       12       42       53  

Amortization of deferred acquisition costs and intangibles

     4        4       8       5       4       4       5       18       20  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     8        31       39       (34     12       56       (4     30       (47
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     27        5       32       70       25       (19     44       120       221  

Provision (benefit) for income taxes

     5        1       6       14       4       (4     9       23       45  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     22        4       26       56       21       (15     35       97       176  
 

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:

                     

Net investment (gains) losses

     1        —         1       —         1       —         —         1       (2

Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges(1)

     (18      6       (12     (61     (18     21       (39     (97     (193

Taxes on adjustments

     4        (1     3       13       3       (4     8       20       41  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 9      $ 9     $ 18     $ 8     $ 7     $ 2     $ 4     $ 21     $ 22  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

 

(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:

  

Changes in fair value of market risk benefits and associated hedges

   $ (15    $ 9     $ (6   $ (56   $ (12   $ 32     $ (28   $ (64   $ (139

Adjustment for changes in reserves, attributed fees and benefit payments

     (3      (3     (6     (5     (6     (11     (11     (33     (54
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges

   $ (18    $ 6     $ (12   $ (61   $ (18   $ 21     $ (39   $ (97   $ (193
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

28


 

Corporate and Other

                      

 

29


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2023

Adjusted Operating Loss—Corporate and Other(1)

(amounts in millions)

 

     2023     2022  
     2Q      1Q     Total     4Q     3Q     2Q     1Q     Total  

REVENUES:

                   

Premiums

   $ 2      $ 2     $ 4     $ 1     $ 2     $ 1     $ 2     $ 6  

Net investment income

     4        4       8       4       1       —         3       8  

Net investment gains (losses)

     (3      (10     (13     (21     4       15       (13     (15

Policy fees and other income

     —          —         —         —         (1     1       —         —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     3        (4     (1     (16     6       17       (8     (1
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                   

Benefits and other changes in policy reserves

     (2      (3     (5     —         (4     (4     (3     (11

Acquisition and operating expenses, net of deferrals

     15        16       31       11       11       10       9       41  

Interest expense

     16        16       32       14       14       13       13       54  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     29        29       58       25       21       19       19       84  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     (26      (33     (59     (41     (15     (2     (27     (85

Provision (benefit) for income taxes

     (4      (5     (9     (16     2       3       (5     (16
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS

     (22      (28     (50     (25     (17     (5     (22     (69
 

ADJUSTMENTS TO LOSS FROM CONTINUING OPERATIONS:

                   

Net investment (gains) losses

     3        10       13       21       (4     (15     13       15  

(Gains) losses on early extinguishment of debt

     —          (1     (1     (1     3       1       3       6  

Expenses related to restructuring

     —          4       4       1       —         —         —         1  

Taxes on adjustments

     (1      (3     (4     (5     —         3       (3     (5
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING LOSS

   $ (20    $ (18   $ (38   $ (9   $ (18   $ (16   $ (9   $ (52
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                       

 

(1) 

Includes inter-segment eliminations and the results of other businesses, including start-up growth initiatives and certain international businesses, that are managed outside the operating segments.

 

30


 

Additional Financial Data

 

31


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2023

Investments Summary

(amounts in millions)

 

     June 30, 2023      March 31, 2023     December 31, 2022     September 30, 2022     June 30, 2022  
     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

   $ 26,413        43    $ 26,894        44   $ 26,047        43   $ 25,550        43   $ 27,342        43

Private fixed maturity securities

     10,808        18        11,182        18       11,126        19       10,997        18       11,727        19  

Residential mortgage-backed securities(1)

     935        1        986        2       995        2       1,069        2       1,213        2  

Commercial mortgage-backed securities

     1,674        3        1,814        3       1,900        3       1,980        3       2,126        3  

Other asset-backed securities

     2,164        4        2,113        3       2,117        3       2,139        4       2,009        3  

State and political subdivisions

     2,343        4        2,403        4       2,399        4       2,532        4       2,849        5  

Non-investment grade fixed maturity securities

     1,733        3        1,989        3       1,999        3       1,948        3       2,020        3  

Equity securities:

                            

Common stocks and mutual funds

     326        1        306        1       258        1       204        —         172        —    

Preferred stocks

     52        —          58        —         61        —         70        —         71        —    

Commercial mortgage loans, net

     6,852        11        6,891        11       7,010        11       7,063        11       7,065        12  

Policy loans

     2,270        4        2,133        3       2,139        3       2,153        4       2,178        3  

Limited partnerships

     2,585        4        2,456        4       2,331        4       2,195        4       2,123        3  

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

     2,196        3        1,759        3       1,802        3       1,563        3       1,774        3  

Other invested assets:

   Derivatives:                             
  

Interest rate swaps

     30        —          42        —         24        —         25        —         30        —    
  

Foreign currency swaps

     16        —          17        —         20        —         32        —         17        —    
  

Equity index options

     15        —          10        —         6        —         38        —         30        —    
  

Other

     564        1        541        1       513        1       493        1       446        1  
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total invested assets and cash

   $ 60,976        100    $ 61,594        100   $ 60,747        100   $ 60,051        100   $ 63,192        100
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Public Fixed Maturity Securities—Credit Quality:

                                                                  

NRSRO(2) Designation

                            
   

                           AAA

   $ 5,936        19    $ 6,112        19   $ 6,067        19   $ 6,174        20   $ 6,713        20

                             AA

     2,896        9        2,872        9       2,859        9       2,958        9       3,245        10  

                               A

     8,597        27        8,699        27       8,398        27       8,278        26       8,886        26  

                           BBB

     13,649        43        14,056        43       13,623        43       13,322        43       14,155        42  

                             BB

     564        2        786        2       776        2       780        2       846        2  

                               B

     23        —          41        —         34        —         33        —         33        —    

                     CCC and lower

     —          —          —          —         —          —         —          —         —          —    
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total public fixed maturity securities

   $ 31,665        100    $ 32,566        100   $ 31,757        100   $ 31,545        100   $ 33,878        100
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Private Fixed Maturity Securities—Credit Quality:

                                                                  

NRSRO(2) Designation

                            
   

                           AAA

   $ 863        6    $ 860        6   $ 825        6   $ 830        6   $ 806        5

                             AA

     1,416        10        1,422        10       1,421        10       1,407        10       1,421        9  

                               A

     4,135        29        4,217        28       4,170        28       4,059        28       4,308        28  

                           BBB

     6,845        47        7,154        48       7,221        48       7,239        48       7,732        50  

                             BB

     1,016        7        1,012        7       1,076        7       1,028        7       1,015        7  

                               B

     122        1        150        1       113        1       107        1       120        1  

                     CCC and lower

     8        —          —          —         —          —         —          —         6        —    
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total private fixed maturity securities

   $ 14,405        100    $ 14,815        100   $ 14,826        100   $ 14,670        100   $ 15,408        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

SECOND QUARTER 2023

 

Fixed Maturity Securities Summary

(amounts in millions)

 

     June 30, 2023      March 31, 2023     December 31, 2022     September 30, 2022     June 30, 2022  
     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

   $ 3,389        7    $ 3,441        7   $ 3,341        7   $ 3,307        7   $ 3,627        7

State and political subdivisions

     2,343        5        2,403        5       2,399        5       2,532        6       2,849        6  

Foreign government

     625        1        630        1       645        1       622        1       682        1  

U.S. corporate

     27,043        59        27,872        59       27,119        59       26,562        58       28,243        58  

Foreign corporate

     7,838        17        8,059        17       8,010        17       7,947        17       8,482        17  

Residential mortgage-backed securities

     934        2        985        2       995        2       1,069        2       1,213        2  

Commercial mortgage-backed securities

     1,690        4        1,831        4       1,908        4       1,989        4       2,137        5  

Other asset-backed securities

     2,208        5        2,160        5       2,166        5       2,187        5       2,053        4  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total fixed maturity securities

   $ 46,070        100    $ 47,381        100   $ 46,583        100   $ 46,215        100   $ 49,286        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Corporate Bond Holdings - Industry Sector:

                            
   

Investment Grade:

                            

Finance and insurance

   $ 8,871        26    $ 9,149        26   $ 8,986        26   $ 8,858        26   $ 9,313        25

Utilities

     4,653        14        4,788        13       4,591        13       4,476        13       4,857        14  

Energy

     3,022        9        2,882        8       2,813        8       2,790        8       3,043        8  

Consumer - non-cyclical

     4,863        14        4,998        14       4,872        14       4,782        14       5,221        15  

Consumer - cyclical

     1,558        4        1,602        4       1,594        5       1,557        5       1,576        4  

Capital goods

     2,490        7        2,554        7       2,517        7       2,505        7       2,677        7  

Industrial

     1,857        5        1,944        6       1,863        5       1,806        5       1,877        5  

Technology and communications

     3,599        10        3,713        10       3,564        10       3,481        10       3,681        10  

Transportation

     1,428        4        1,459        4       1,439        4       1,385        4       1,465        4  

Other

     973        3        1,022        3       1,048        3       1,072        3       1,147        3  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal

     33,314        96        34,111        95       33,287        95       32,712        95       34,857        95  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-Investment Grade:

                            

Finance and insurance

     154        —          164        1       153        1       159        1       168        1  

Utilities

     46        —          47        —         47        —         48        —         56        —    

Energy

     228        1        407        1       409        1       399        1       431        1  

Consumer - non-cyclical

     139        —          150        —         151        —         140        —         141        —    

Consumer - cyclical

     273        1        291        1       299        1       302        1       290        1  

Capital goods

     172        1        178        1       167        1       158        1       146        —    

Industrial

     149        —          155        —         152        —         146        —         171        1  

Technology and communications

     226        1        247        1       277        1       266        1       286        1  

Transportation

     35        —          37        —         36        —         35        —         29        —    

Other

     145        —          144        —         151        —         144        —         150        —    
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal

     1,567        4        1,820        5       1,842        5       1,797        5       1,868        5  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 34,881        100    $ 35,931        100   $ 35,129        100   $ 34,509        100   $ 36,725        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Fixed Maturity Securities - Contractual Maturity Dates:

                            
   

Due in one year or less

   $ 1,375        3    $ 1,328        3   $ 1,234        3   $ 1,128        2   $ 1,314        3

Due after one year through five years

     8,000        17        8,245        17       7,931        17       7,856        17       7,958        16  

Due after five years through ten years

     11,662        25        11,746        25       11,915        26       11,751        25       12,765        26  

Due after ten years

     20,201        44        21,086        44       20,434        43       20,235        45       21,846        44  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal

     41,238        89        42,405        89       41,514        89       40,970        89       43,883        89  

Mortgage and asset-backed securities

     4,832        11        4,976        11       5,069        11       5,245        11       5,403        11  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total fixed maturity securities

   $ 46,070        100    $ 47,381        100   $ 46,583        100   $ 46,215        100   $ 49,286        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
                                      

 

33


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2023

 

U.S. GAAP Net Investment Income Yields

(amounts in millions)

 

     2023     2022  
     2Q      1Q     Total     4Q     3Q     2Q     1Q     Total  

U.S. GAAP Net Investment Income

                   

Fixed maturity securities - taxable

   $ 567      $ 561     $ 1,128     $ 562     $ 576     $ 578     $ 580     $ 2,296  

Fixed maturity securities - non-taxable

     1        1       2       1       2       1       1       5  

Equity securities

     3        2       5       3       3       2       2       10  

Commercial mortgage loans

     75        76       151       81       81       78       81       321  

Policy loans

     54        55       109       55       55       51       50       211  

Limited partnerships

     17        28       45       22       38       32       7       99  

Other invested assets

     70        68       138       71       67       66       63       267  

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

     22        18       40       12       7       1       —         20  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross investment income before expenses and fees

     809        809       1,618       807       829       809       784       3,229  

Expenses and fees

     (24      (22     (46     (20     (21     (22     (20     (83
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

   $ 785      $ 787     $ 1,572     $ 787     $ 808     $ 787     $ 764     $ 3,146  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Annualized Yields

                   

Fixed maturity securities—taxable

     4.5      4.4     4.5     4.4     4.5     4.5     4.4     4.5

Fixed maturity securities—non-taxable

     4.9      4.6     4.8     4.0     7.1     3.6     3.6     4.7

Equity securities

     3.2      2.3     2.8     4.0     4.6     3.4     3.7     4.0

Commercial mortgage loans

     4.4      4.4     4.4     4.6     4.6     4.5     4.7     4.6

Policy loans

     9.8      10.3     10.0     10.3     10.2     9.7     9.8     10.0

Limited partnerships(1)

     2.7      4.7     3.7     3.9     7.0     6.2     1.4     4.7

Other invested assets(2)

     50.7      51.6     51.2     56.6     57.0     62.6     64.8     59.9

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

     4.5      4.0     4.2     2.9     1.7     0.3         1.2
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross investment income before expenses and fees

     5.0      5.0     5.0     5.0     5.1     4.9     4.8     5.0

Expenses and fees

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

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

     4.9      4.9     4.9     4.8     5.0     4.8     4.7     4.8
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                       

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. 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

SECOND QUARTER 2023

 

Net Investment Gains (Losses)—Detail

(amounts in millions)

 

     2023     2022  
     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

   $ (39    $ (8   $ (47   $ (25   $ (23   $ (2   $ (12   $ (62

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

     1        1       2       —         9       —         6       15  

Foreign corporate

     1        (3     (2     (6     (7     (1     (2     (16

Foreign government

     —          (1     (1     —         —         —         —         —    

Mortgage-backed securities

     (2      (5     (7     (4     (5     (1     —         (10

Asset-backed securities

     9        —         9       —         (1     —         —         (1
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     (30      (16     (46     (35     (27     (4     (8     (74

Net realized gains (losses) on equity securities sold

     (1      —         (1     —         —         —         —         —    

Net realized gains (losses) on limited partnerships

     —          —         —         —         —         —         —         —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net realized investment gains (losses)

     (31      (16     (47     (35     (27     (4     (8     (74
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     11        (15     (4     —         —         —         —         —    

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

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

Net unrealized gains (losses) on equity securities still held

     21        11       32       11       (14     (26     (6     (35

Net unrealized gains (losses) on limited partnerships

     40        —         40       36       (24     24       35       71  

Commercial mortgage loans

     —          (2     (2     1       —         2       1       4  

Derivative instruments

     (1      12       11       (12     7       18       19       32  

Other

     —          (1     (1     (6     —         5       3       2  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment gains (losses), gross

     39        (11     28       (5     (58     19       42       (2

Adjustment for net investment (gains) losses attributable to noncontrolling interests

     2        —         2       —         —         —         —         —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment gains (losses), net

   $ 41      $ (11   $ 30     $ (5   $ (58   $ 19     $ 42     $ (2
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                       

 

35


 

Reconciliations of Non-GAAP Measures

 

36


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2023

Reconciliation of Operating ROE

(amounts in millions)

 

Quarterly Average ROE

   Three months ended  
U.S. GAAP Basis ROE    June 30,
2023
    March 31,
2023
    December 31,
2022
    September 30,
2022
    June 30,
2022
 

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

   $ 137     $ 122     $ 381     $ 136     $ 159  

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

   $ 10,307     $ 10,269     $ 10,069     $ 9,831     $ 9,696  

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

     5.3     4.8     15.1     5.5     6.6

Operating ROE

          

Adjusted operating income for the period ended(1)

   $ 85     $ 144     $ 338     $ 158     $ 153  

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

   $ 10,307     $ 10,269     $ 10,069     $ 9,831     $ 9,696  

Annualized Operating Quarterly Basis ROE(1)/(2)

     3.3     5.6     13.4     6.4     6.3

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) 

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).

 

37


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2023

Reconciliation of Consolidated Expense Ratio

(amounts in millions)

 

          2023     2022  
     GAAP Basis Expense Ratio    2Q      1Q     Total     4Q     3Q     2Q     1Q     Total  

(A)

   Acquisition and operating expenses, net of deferrals    $ 226      $ 240     $ 466     $ 225     $ 245     $ 579     $ 236     $ 1,285  

(B)

   Premiums    $ 902      $ 915     $ 1,817     $ 918     $ 929     $ 916     $ 917     $ 3,680  

(A) / (B)

   GAAP Basis Expense Ratio      25      26     26     25     26     63     26     35
 
   Adjusted Expense Ratio                    
   Acquisition and operating expenses, net of deferrals    $ 226      $ 240     $ 466     $ 225     $ 245     $ 579     $ 236     $ 1,285  
   Less: Reinsurance recapture payment(1)      —          —         —         —         —         365       —         365  
   Less: Legal settlement expenses(2)      1        13       14       —         20       —         —         20  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(C)

   Adjusted acquisition and operating expenses, net of deferrals    $ 225      $ 227     $ 452     $ 225     $ 225     $ 214     $ 236     $ 900  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   Premiums    $ 902      $ 915     $ 1,817     $ 918     $ 929     $ 916     $ 917     $ 3,680  
   Add: Policy fees and other income      166        163       329       167       169       165       170       671  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(D)

   Adjusted revenues    $ 1,068      $ 1,078     $ 2,146     $ 1,085     $ 1,098     $ 1,081     $ 1,087     $ 4,351  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(C) / (D)

   Adjusted expense ratio(3)      21      21     21     21     20     20     22     21
                                                         

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. 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 class action attorney fees incurred in connection with legal settlements in the company's long-term care insurance business. These amounts are accrued in the period the court settlement occurs.

(3) 

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

SECOND QUARTER 2023

Reconciliation of Reported Yield to Core Yield

 

          2023     2022  
     (Assets - amounts in billions)    2Q      1Q     Total     4Q     3Q     2Q     1Q     Total  
   Reported - Total Invested Assets and Cash    $ 61.0      $ 61.6     $ 61.0     $ 60.7     $ 60.1     $ 63.2     $ 68.2     $ 60.7  
   Subtract:                    
  

Unrealized gains (losses)

     (3.7      (3.0     (3.7     (4.2     (4.9     (1.9     3.0       (4.2
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   Adjusted end of period invested assets and cash    $ 64.7      $ 64.6     $ 64.7     $ 64.9     $ 65.0     $ 65.1     $ 65.2     $ 64.9  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(A)

   Average Invested Assets and Cash Used in Reported and Core Yield Calculation    $ 64.6      $ 64.8     $ 64.7     $ 65.0     $ 65.0     $ 65.2     $ 65.4     $ 65.2  
 
   (Income - amounts in millions)                    
 

(B)

   Reported - Net Investment Income    $ 785      $ 787     $ 1,572     $ 787     $ 808     $ 787     $ 764     $ 3,146  
   Subtract:                    
  

Bond calls and commercial mortgage loan prepayments

     —          2       2       6       6       7       10       29  
  

Other non-core items(1)

     3        1       4       (1     —         —         —         (1
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(C)

   Core Net Investment Income    $ 782      $ 784     $ 1,566     $ 782     $ 802     $ 780     $ 754     $ 3,118  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(B) / (A)

   Reported Yield      4.86      4.86     4.86     4.84     4.97     4.83     4.67     4.83

(C) / (A)

   Core Yield      4.84      4.84     4.84     4.81     4.93     4.79     4.61     4.79
                                                         

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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