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Exhibit 99.2

 


 

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i


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH 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,” “intends,” “anticipates,” “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 from those in the forward-looking statements due to global political, economic, inflation, business, competitive, market, regulatory and other factors and risks, including but not limited to, 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. Therefore, the company cautions you against relying on any forward-looking statements. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required under applicable securities laws.

 

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GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH 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 (Loss) by Quarter

     8  

Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss)

     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

FOURTH QUARTER 2023

 

Dear Investor,

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

All information included herein 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, particularly in its Long-Term Care Insurance and Life and Annuities segments, to extend to future periods.

In the fourth quarter of 2023, the company completed its annual assumption review in its long-term care insurance and life insurance businesses. Additional information on these updates is included on pages 22 and 26.

Please see the accompanying press release posted to the company’s website at http://investor.genworth.com for additional information regarding its fourth quarter 2023 results.

Investors are encouraged to listen to the company’s earnings call on the fourth quarter 2023 results at 9:00 a.m. (ET) on February 22, 2024.

Regards,

Brian Johnson, Investor Relations

InvestorInfo@genworth.com

 

3


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH 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). Management 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), among other key performance indicators, 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 (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting. This financial supplement includes other non-GAAP measures management believes enhances the understanding and comparability of performance by highlighting underlying business activity and profitability drivers. These additional non-GAAP measures are on pages 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

FOURTH 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, June 30, 2023 and September 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 in determining the re-presented provision for income taxes for the quarters in 2022.

This financial supplement contains selected operating performance measures including “sales” and “insurance in-force” or “risk in-force” which are commonly used in the insurance industry as measures of operating performance.

Management regularly monitors and reports sales metrics as a measure of volume of new business generated in a period. Sales refer to new insurance written for mortgage insurance products included in the company’s Enact segment. The company considers new insurance written to be a measure of the operating performance of its Enact segment because it represents a measure of new sales of insurance policies during a specified period, rather than a measure of revenues or profitability during that period.

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

Management also regularly monitors and reports a loss ratio for the company’s Enact segment. 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

FOURTH QUARTER 2023

 

Financial Highlights

(amounts in millions, except per share data)

 

Balance Sheet Data

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

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

   $ 10,035     $ 10,276     $ 10,321     $ 10,292     $ 10,245  

Total accumulated other comprehensive income (loss)(1)

     (2,555     (2,220     (2,861     (2,853     (2,614
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

   $ 7,480     $ 8,056     $ 7,460     $ 7,439     $ 7,631  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Book value per share

   $ 16.74     $ 17.80     $ 15.98     $ 15.28     $ 15.40  

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

   $ 22.46     $ 22.70     $ 22.11     $ 21.14     $ 20.68  

Common shares outstanding as of the balance sheet date

     446.8       452.7       466.8       486.9       495.4  
     Three months ended  

Quarterly Average ROE

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

U.S. GAAP Basis ROE

     (8.4 )%      1.1     5.3     4.8     15.1

Operating ROE(2)

     (9.1 )%      1.6     3.3     5.6     13.4

Basic and Diluted Shares

   Three months ended
December 31, 2023
    Twelve months ended
December 31, 2023
                   

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

     449.4       468.8        

Potentially dilutive securities:

          

Performance stock units, restricted stock units and other equity-based awards

     —        6.1        
  

 

 

   

 

 

       

Weighted-average common shares used in diluted earnings per share calculations(3)

     449.4       474.9        
  

 

 

   

 

 

       

 

(1) 

As of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, total accumulated other comprehensive income (loss) includes $(1,439) million, $1,826 million, $(964) million, $(1,628) million and $(403) million, net of taxes, respectively, related to changes in the 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.

(3) 

Under applicable accounting guidance, companies in a loss position are required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of the loss from continuing operations for the three months ended December 31, 2023, the company was required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share for the three months ended December 31, 2023, as the inclusion of shares for performance stock units, restricted stock units and other equity-based awards of 6.3 million would have been antidilutive to the calculation. If the company had not incurred a loss from continuing operations for the three months ended December 31, 2023, dilutive potential weighted-average common shares outstanding would have been 455.7 million.

 

6


 

 Consolidated Quarterly Results

  

 

 

7


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

Consolidated Net Income (Loss) by Quarter

(amounts in millions, except per share amounts)

 

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

REVENUES:

                       

Premiums

   $ 904      $ 915     $ 902     $ 915     $ 3,636     $ 918     $ 929     $ 916     $ 917     $ 3,680  

Net investment income

     810        801       785       787       3,183       787       808       787       764       3,146  

Net investment gains (losses)

     38        (43     39       (11     23       (5     (58     19       42       (2

Policy fees and other income

     159        158       166       163       646       167       169       165       170       671  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     1,911        1,831       1,892       1,854       7,488       1,867       1,848       1,887       1,893       7,495  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                       

Benefits and other changes in policy reserves

     1,233        1,199       1,175       1,176       4,783       1,209       1,159       768       1,167       4,303  

Liability remeasurement (gains) losses

     416        116       70       (15     587       (267     17       24       (64     (290

Changes in fair value of market risk benefits and associated hedges

     14        (24     (19     17       (12     (56     (27     20       (41     (104

Interest credited

     124        127       126       126       503       125       128       126       125       504  

Acquisition and operating expenses, net of deferrals

     248        228       226       240       942       225       245       579       236       1,285  

Amortization of deferred acquisition costs and intangibles

     63        65       64       72       264       74       80       84       88       326  

Interest expense

     30        30       29       29       118       28       26       26       26       106  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     2,128        1,741       1,671       1,645       7,185       1,338       1,628       1,627       1,537       6,130  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     (217      90       221       209       303       529       220       260       356       1,365  

Provision (benefit) for income taxes

     (36      30       55       55       104       119       54       62       84       319  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     (181      60       166       154       199       410       166       198       272       1,046  

Net income (loss) from discontinued operations, net of taxes(1)

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

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

     (183      60       168       154       199       408       171       197       270       1,046  

Less: net income from continuing operations attributable to noncontrolling interests

     29        31       31       32       123       27       35       38       30       130  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ (212    $ 29     $ 137     $ 122     $ 76     $ 381     $ 136     $ 159     $ 240     $ 916  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

                       

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

   $ (210    $ 29     $ 135     $ 122     $ 76     $ 383     $ 131     $ 160     $ 242     $ 916  

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

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

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ (212    $ 29     $ 137     $ 122     $ 76     $ 381     $ 136     $ 159     $ 240     $ 916  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                           

Earnings (Loss) Per Share Data:

                     

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

                     

Basic

   $ (0.47    $ 0.06     $ 0.28     $ 0.25     $ 0.16     $ 0.77     $ 0.26     $ 0.32     $ 0.48     $ 1.82  

Diluted

   $ (0.47    $ 0.06     $ 0.28     $ 0.24     $ 0.16     $ 0.76     $ 0.26     $ 0.31     $ 0.47     $ 1.79  

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

                     

Basic

   $ (0.47    $ 0.06     $ 0.29     $ 0.25     $ 0.16     $ 0.77     $ 0.27     $ 0.31     $ 0.47     $ 1.82  

Diluted

   $ (0.47    $ 0.06     $ 0.29     $ 0.24     $ 0.16     $ 0.76     $ 0.27     $ 0.31     $ 0.46     $ 1.79  

Weighted-average common shares outstanding

                     

Basic

     449.4        460.5       473.2       492.3       468.8       496.5       503.8       508.9       508.3       504.4  

Diluted(2)

     449.4        466.0       478.1       500.1       474.9       502.9       509.3       514.1       517.4       510.9  

 

(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.

(2) 

Under applicable accounting guidance, companies in a loss position are required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of the loss from continuing operations for the three months ended December 31, 2023, the company was required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share for the three months ended December 31, 2023, as the inclusion of shares for performance stock units, restricted stock units and other equity-based awards of 6.3 million would have been antidilutive to the calculation. If the company had not incurred a loss from continuing operations for the three months ended December 31, 2023, dilutive potential weighted-average common shares outstanding would have been 455.7 million.

 

8


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss)

(amounts in millions, except per share amounts)

 

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

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

   $ (212    $ 29     $ 137     $ 122     $ 76     $ 381     $ 136     $ 159     $ 240     $ 916  

Add: net income from continuing operations attributable to noncontrolling interests

     29        31       31       32       123       27       35       38       30       130  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

     (183      60       168       154       199       408       171       197       270       1,046  

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

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

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     (181      60       166       154       199       410       166       198       272       1,046  

Less: net income from continuing operations attributable to noncontrolling interests

     29        31       31       32       123       27       35       38       30       130  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     (210      29       135       122       76       383       131       160       242       916  
 

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

                       

Net investment (gains) losses, net(1)

     (38      43       (41     11       (25     5       58       (19     (42     2  

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

     13        (26     (23     14       (22     (64     (32     8       (54     (142

(Gains) losses on early extinguishment of debt

     (1      —        —        (1     (2     (1     3       1       3       6  

Expenses related to restructuring

     —         —        1       3       4       1       —        1       —        2  

Pension plan termination costs

     —         —        —        —        —        2       6       —        —        8  

Taxes on adjustments

     6        (4     13       (5     10       12       (8     2       20       26  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

   $ (230    $ 42     $ 85     $ 144     $ 41     $ 338     $ 158     $ 153     $ 169     $ 818  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS):

                       

Enact segment

   $ 129      $ 134     $ 146     $ 143     $ 552     $ 120     $ 156     $ 167     $ 135     $ 578  

Long-Term Care Insurance segment

     (151      (71     (43     23       (242     204       26       17       73       320  

Life and Annuities segment:

                       

Life Insurance

     (206      (25     (17     (27     (275     1       (28     (37     (47     (111

Fixed Annuities

     9        17       10       14       50       14       15       20       13       62  

Variable Annuities

     14        5       9       9       37       8       7       2       4       21  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Life and Annuities segment

     (183      (3     2       (4     (188     23       (6     (15     (30     (28
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Corporate and Other

     (25      (18     (20     (18     (81     (9     (18     (16     (9     (52
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

   $ (230    $ 42     $ 85     $ 144     $ 41     $ 338     $ 158     $ 153     $ 169     $ 818  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                           

Earnings (Loss) Per Share Data:

                     

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

                     

Basic

   $ (0.47    $ 0.06     $ 0.29     $ 0.25     $ 0.16     $ 0.77     $ 0.27     $ 0.31     $ 0.47     $ 1.82  

Diluted

   $ (0.47    $ 0.06     $ 0.29     $ 0.24     $ 0.16     $ 0.76     $ 0.27     $ 0.31     $ 0.46     $ 1.79  

Adjusted operating income (loss) per share

                     

Basic

   $ (0.51    $ 0.09     $ 0.18     $ 0.29     $ 0.09     $ 0.68     $ 0.31     $ 0.30     $ 0.33     $ 1.62  

Diluted

   $ (0.51    $ 0.09     $ 0.18     $ 0.29     $ 0.09     $ 0.67     $ 0.31     $ 0.30     $ 0.33     $ 1.60  

Weighted-average common shares outstanding

                     

Basic

     449.4        460.5       473.2       492.3       468.8       496.5       503.8       508.9       508.3       504.4  

Diluted(3)

     449.4        466.0       478.1       500.1       474.9       502.9       509.3       514.1       517.4       510.9  

 

(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).

(3) 

Under applicable accounting guidance, companies in a loss position are required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of the loss from continuing operations for the three months ended December 31, 2023, the company was required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share for the three months ended December 31, 2023, as the inclusion of shares for performance stock units, restricted stock units and other equity-based awards of 6.3 million would have been antidilutive to the calculation. If the company had not incurred a loss from continuing operations for the three months ended December 31, 2023, dilutive potential weighted-average common shares outstanding would have been 455.7 million.

 

9


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Consolidated Balance Sheets

(amounts in millions)

 

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

ASSETS

             

Investments:

             

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

   $ 46,781      $ 43,968     $ 46,070     $ 47,381     $ 46,583  

Equity securities, at fair value

     396        363       378       364       319  

Commercial mortgage loans(2)

     6,829        6,818       6,876       6,915       7,032  

Less: Allowance for credit losses

     (27      (25     (24     (24     (22
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Commercial mortgage loans, net

     6,802        6,793       6,852       6,891       7,010  

Policy loans

     2,220        2,233       2,270       2,133       2,139  

Limited partnerships

     2,821        2,699       2,585       2,456       2,331  

Other invested assets

     731        645       648       617       566  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total investments

     59,751        56,701       58,803       59,842       58,948  

Cash, cash equivalents and restricted cash

     2,215        1,993       2,173       1,752       1,799  

Accrued investment income

     647        620       553       700       643  

Deferred acquisition costs

     1,988        2,042       2,096       2,150       2,211  

Intangible assets

     198        199       201       203       203  

Reinsurance recoverable

     19,054        17,623       19,113       19,606       19,059  

Less: Allowance for credit losses

     (29      (28     (64     (64     (63
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Reinsurance recoverable, net

     19,025        17,595       19,049       19,542       18,996  

Other assets

     489        453       445       478       488  

Deferred tax asset

     1,952        1,580       1,954       2,002       1,983  

Market risk benefit assets

     43        39       37       28       26  

Separate account assets

     4,509        4,244       4,533       4,479       4,417  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 90,817      $ 85,466     $ 89,844     $ 91,176     $ 89,714  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
                 

 

(1) 

Amortized cost of $49,365 million, $49,855 million, $49,864 million, $50,461 million and $50,834 million as of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively, and allowance for credit losses of $7 million, $6 million, $4 million, $15 million and $— as of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively.

(2) 

Net of unamortized balance of loan origination fees and costs of $4 million as of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022.

 

10


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Consolidated Balance Sheets

(amounts in millions)

 

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

LIABILITIES AND EQUITY

            

Liabilities:

            

Future policy benefits

  $ 57,655      $ 51,740     $ 56,443     $ 57,531     $ 55,407  

Policyholder account balances

    15,540        15,590       15,922       16,202       16,564  

Market risk benefit liabilities

    625        579       666       761       748  

Liability for policy and contract claims

    652        631       628       665       683  

Unearned premiums

    149        162       175       189       203  

Other liabilities

    1,768        2,038       1,607       1,510       1,687  

Long-term borrowings

    1,584        1,602       1,601       1,600       1,611  

Separate account liabilities

    4,509        4,244       4,533       4,479       4,417  

Liabilities related to discontinued operations(1)

    —         2       2       7       8  
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    82,482        76,588       81,577       82,944       81,328  
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Equity:

            

Common stock

    1        1       1       1       1  

Additional paid-in capital

    11,884        11,877       11,869       11,863       11,869  

Accumulated other comprehensive income (loss):

            

Change in the discount rate used to measure future policy benefits

    (1,439      1,826       (964     (1,628     (403

All other

    (1,116      (4,046     (1,897     (1,225     (2,211
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total accumulated other comprehensive income (loss)

    (2,555      (2,220     (2,861     (2,853     (2,614

Retained earnings

    1,213        1,426       1,398       1,261       1,139  

Treasury stock, at cost

    (3,063      (3,028     (2,947     (2,833     (2,764
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

    7,480        8,056       7,460       7,439       7,631  

Noncontrolling interests

    855        822       807       793       755  
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

    8,335        8,878       8,267       8,232       8,386  
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

  $ 90,817      $ 85,466     $ 89,844     $ 91,176     $ 89,714  
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
                

 

(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

FOURTH QUARTER 2023

 

Consolidated Balance Sheet by Segment

(amounts in millions)

 

     December 31, 2023  
     Enact     Long-Term
Care Insurance
    Life and
Annuities
    Corporate
and
Other
(1)
    Total  

ASSETS

          

Cash and investments

   $ 5,964     $ 35,923     $ 19,032     $ 1,694     $ 62,613  

Deferred acquisition costs and intangible assets

     44       900       1,228       14       2,186  

Reinsurance recoverable, net

     1       7,572       11,452       —        19,025  

Deferred tax and other assets

     184       1,800       253       204       2,441  

Market risk benefit assets

     —        —        43       —        43  

Separate account assets

     —        —        4,509       —        4,509  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 6,193     $ 46,195     $ 36,517     $ 1,912     $ 90,817  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

          

Liabilities:

          

Future policy benefits

   $ —      $ 43,929     $ 13,726     $ —      $ 57,655  

Policyholder account balances

     —        —        15,540       —        15,540  

Market risk benefit liabilities

     —        —        625       —        625  

Liability for policy and contract claims

     518       —        126       8       652  

Unearned premiums

     149       —        —        —        149  

Other liabilities

     141       775       273       579       1,768  

Borrowings

     745       —        —        839       1,584  

Separate account liabilities

     —        —        4,509       —        4,509  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     1,553       44,704       34,799       1,426       82,482  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity:

          

Allocated equity, excluding accumulated other comprehensive income (loss)

     3,974       2,572       2,552       937       10,035  

Allocated accumulated other comprehensive income (loss)

     (189     (1,081     (834     (451     (2,555
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

     3,785       1,491       1,718       486       7,480  

Noncontrolling interests

     855       —        —        —        855  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     4,640       1,491       1,718       486       8,335  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 6,193     $ 46,195     $ 36,517     $ 1,912     $ 90,817  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) 

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

 

12


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Consolidated Balance Sheet by Segment

(amounts in millions)

 

     September 30, 2023  
     Enact     Long-Term
Care Insurance
     Life and
Annuities
    Corporate
and
Other
(1)
    Total  

ASSETS

           

Cash and investments

   $ 5,750     $ 33,890      $ 18,457     $ 1,217     $ 59,314  

Deferred acquisition costs and intangible assets

     41       917        1,273       10       2,241  

Reinsurance recoverable, net

     —        6,814        10,781       —        17,595  

Deferred tax and other assets

     209       1,306        317       201       2,033  

Market risk benefit assets

     —        —         39       —        39  

Separate account assets

     —        —         4,244       —        4,244  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total assets

   $ 6,000     $ 42,927      $ 35,111     $ 1,428     $ 85,466  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

           

Liabilities:

           

Future policy benefits

   $ —      $ 38,928      $ 12,812     $ —      $ 51,740  

Policyholder account balances

     —        —         15,590       —        15,590  

Market risk benefit liabilities

     —        —         579       —        579  

Liability for policy and contract claims

     501       —         123       7       631  

Unearned premiums

     162       —         —        —        162  

Other liabilities

     124       1,175        250       489       2,038  

Borrowings

     745       —         —        857       1,602  

Separate account liabilities

     —        —         4,244       —        4,244  

Liabilities related to discontinued operations

     —        —         —        2       2  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities

     1,532       40,103        33,598       1,355       76,588  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Equity:

           

Allocated equity, excluding accumulated other comprehensive income (loss)

     3,974       2,690        2,940       672       10,276  

Allocated accumulated other comprehensive income (loss)

     (328     134        (1,427     (599     (2,220
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

     3,646       2,824        1,513       73       8,056  

Noncontrolling interests

     822       —         —        —        822  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total equity

     4,468       2,824        1,513       73       8,878  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 6,000     $ 42,927      $ 35,111     $ 1,428     $ 85,466  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

(1) 

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

 

13


 

Enact Segment

                      

 

 

 

14


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

Adjusted Operating Income and Sales—Enact Segment

(amounts in millions)

 

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

REVENUES:

                        

Premiums

   $ 240      $ 243      $ 239     $ 235     $ 957     $ 233     $ 235     $ 238     $ 234     $ 940  

Net investment income

     57        55        50       46       208       45       39       36       35       155  

Net investment gains (losses)

     (1      —         (13     —        (14     (1     —        (1     —        (2

Policy fees and other income

     —         1        1       —        2       —        1       —        1       2  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     296        299        277       281       1,153       277       275       273       270       1,095  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                        

Benefits and other changes in policy reserves

     24        18        (4     (11     27       18       (40     (62     (10     (94

Acquisition and operating expenses, net of deferrals

     56        52        52       52       212       60       55       58       54       227  

Amortization of deferred acquisition costs and intangibles

     3        3        2       3       11       2       4       3       3       12  

Interest expense

     13        13        13       13       52       14       12       13       13       52  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     96        86        63       57       302       94       31       12       60       197  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     200        213        214       224       851       183       244       261       210       898  

Provision for income taxes

     43        48        46       49       186       39       53       57       45       194  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM CONTINUING OPERATIONS

     157        165        168       175       665       144       191       204       165       704  

Less: net income from continuing operations attributable to noncontrolling interests

     29        31        31       32       123       27       35       38       30       130  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     128        134        137       143       542       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)

     1        —         11       —        12       1       —        1       —        2  

Expenses related to restructuring

     —         —         —        —        —        3       —        —        —        3  

Taxes on adjustments

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

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 129      $ 134      $ 146     $ 143     $ 552     $ 120     $ 156     $ 167     $ 135     $ 578  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                            

SALES:

                      

Direct Primary New Insurance Written (NIW)

   $ 10,453      $ 14,391      $ 15,083     $ 13,154     $ 53,081     $ 15,145     $ 15,069     $ 17,448     $ 18,823     $ 66,485  
                            

 

(1) 

Net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests of $2 million in the second quarter of 2023.

 

15


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Direct Primary New Insurance Written Metrics—Enact Segment

(amounts in millions)

 

     2023     2022  
     4Q      3Q     2Q     1Q     4Q     3Q     2Q     1Q  
     Direct
Primary
NIW
     % of
Direct
Primary
NIW
     Direct
Primary
NIW
     % of
Direct
Primary
NIW
    Direct
Primary
NIW
     % of
Direct
Primary
NIW
    Direct
Primary
NIW
     % of
Direct
Primary
NIW
    Direct
Primary
NIW
     % of
Direct
Primary
NIW
    Direct
Primary
NIW
     % of
Direct
Primary
NIW
    Direct
Primary
NIW
     % of
Direct
Primary
NIW
    Direct
Primary
NIW
     % of
Direct
Primary
NIW
 

Payment Type

                                           

Monthly

   $ 10,187        98    $ 14,099        98   $ 14,774        98   $ 12,809        97   $ 13,745        91   $ 14,138        94   $ 16,169        93   $ 17,071        91

Single

     246        2        269        2       281        2       318        3       1,368        9       890        6       1,218        7       1,690        9  

Other(1)

     20        —         23        —        28        —        27        —        32        —        41        —        61        —        62        —   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 10,453        100    $ 14,391        100   $ 15,083        100   $ 13,154        100   $ 15,145        100   $ 15,069        100   $ 17,448        100   $ 18,823        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Origination

                                           

Purchase

   $ 10,169        97    $ 14,073        98   $ 14,720        98   $ 12,761        97   $ 14,744        97   $ 14,634        97   $ 16,802        96   $ 17,326        92

Refinance

     284        3        318        2       363        2       393        3       401        3       435        3       646        4       1,497        8  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 10,453        100    $ 14,391        100   $ 15,083        100   $ 13,154        100   $ 15,145        100   $ 15,069        100   $ 17,448        100   $ 18,823        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

FICO Scores

                                           

Over 760

   $ 5,086        49    $ 6,679        46   $ 6,911        46   $ 6,004        46   $ 6,951        46   $ 6,948        46   $ 7,981        45   $ 8,359        45

740 - 759

     1,680        16        2,438        17       2,608        17       2,268        17       2,709        18       2,554        17       2,916        17       3,085        16  

720 - 739

     1,378        13        1,928        13       2,097        14       1,817        14       2,226        15       2,106        14       2,530        15       2,515        13  

700 - 719

     997        10        1,422        10       1,499        10       1,296        10       1,489        10       1,531        10       1,917        11       1,952        10  

680 - 699

     664        6        974        7       1,060        7       954        7       1,035        7       1,085        7       1,099        6       1,316        7  

660 - 679(2)

     409        4        592        4       568        4       517        4       478        3       527        3       598        3       931        5  

640 - 659

     181        2        282        2       260        2       229        2       189        1       234        2       297        2       486        3  

620 - 639

     53        —         74        1       76        —        65        —        66        —        79        1       106        1       173        1  

<620

     5        —         2        —        4        —        4        —        2        —        5        —        4        —        6        —   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 10,453        100    $ 14,391        100   $ 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

   $ 1,820        18    $ 2,677        18   $ 2,692        18   $ 2,106        16   $ 2,423        16   $ 1,741        11   $ 2,177        12   $ 3,146        17

90.01% to 95.00%

     3,759        36        5,431        38       5,743        38       4,928        38       5,684        37       6,184        41       7,458        43       6,682        35  

85.01% to 90.00%

     3,489        33        4,568        32       4,753        31       4,390        33       4,971        33       5,094        34       5,207        30       5,620        30  

85.00% and below

     1,385        13        1,715        12       1,895        13       1,730        13       2,067        14       2,050        14       2,606        15       3,375        18  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 10,453        100    $ 14,391        100   $ 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

   $ 3,158        30    $ 4,437        31   $ 4,467        30   $ 3,538        27   $ 4,294        28   $ 3,728        25   $ 4,067        23   $ 4,452        24

38.01% to 45.00%

     3,816        37        4,936        34       5,214        34       4,940        38       5,518        37       5,681        38       6,436        37       6,361        34  

38.00% and below

     3,479        33        5,018        35       5,402        36       4,676        35       5,333        35       5,660        37       6,945        40       8,010        42  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 10,453        100    $ 14,391        100   $ 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

FOURTH QUARTER 2023

 

Other Metrics—Enact Segment

(dollar amounts in millions)

 

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

Direct Primary Insurance In-Force

  $ 262,937     $ 262,014     $ 257,816     $ 252,516       $ 248,262     $ 241,813     $ 237,563     $ 231,853    
   

Direct Risk In-Force

                     

Primary

  $ 67,529     $ 67,056     $ 65,714     $ 64,106       $ 62,791     $ 61,124     $ 59,911     $ 58,295    

Pool

    69       70       73       76         79       84       89       97    
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total Direct Risk In-Force

  $ 67,598     $ 67,126     $ 65,787     $ 64,182       $ 62,870     $ 61,208     $ 60,000     $ 58,392    
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   
   

Expense Ratio(1)

    25     23     23     23     23     27     25     26     24     25
   

Primary Persistency Rate

    86     84     84     85     85     86     82     80     76     85
   

Combined Risk To Capital Ratio(2)

    11.6:1       11.6:1       11.8:1       12.6:1         12.8:1       12.3:1       12.6:1       12.0:1    
   

EMICO Risk To Capital Ratio(2),(3)

    11.6:1       11.6:1       11.9:1       12.7:1         12.9:1       12.3:1       12.6:1       12.1:1    
   

PMIERs Available Assets(4)

  $ 5,006     $ 5,268     $ 5,093     $ 5,357       $ 5,206     $ 5,292     $ 5,147     $ 5,222    
   

PMIERs Required Assets(4)

  $ 3,119     $ 3,251     $ 3,135     $ 3,259       $ 3,156     $ 3,043     $ 3,100     $ 2,961    
   

Available Assets Above PMIERs Requirements(4)

  $ 1,887     $ 2,017     $ 1,958     $ 2,098       $ 2,050     $ 2,249     $ 2,047     $ 2,261    
   

PMIERs Sufficiency Ratio(4)

    161     162     162     164       165     174     166     176  
   

Average Primary Loan Size (in thousands)

  $ 270     $ 268     $ 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) 

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.

(2) 

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.

(3) 

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

(4) 

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

FOURTH QUARTER 2023

 

Loss Metrics—Enact Segment

(amounts in millions)

 

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

Average Paid Claim (in thousands)(1)

   $ 42.9      $ 46.8     $ 46.6     $ 46.9       $ 48.7     $ 42.2     $ 50.1     $ 51.6    

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

   $ 23.3      $ 23.9     $ 25.0     $ 24.8       $ 24.0     $ 25.2     $ 27.0     $ 26.2    
 

Reserves:

                       

Direct primary case(3)

   $ 477      $ 460     $ 452     $ 462       $ 479     $ 476     $ 526     $ 591    

All other(3)

     41        41       38       40         40       34       33       34    
  

 

 

    

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total Reserves

   $ 518      $ 501     $ 490     $ 502       $ 519     $ 510     $ 559     $ 625    
  

 

 

    

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   
 

Beginning Reserves

   $ 501      $ 490     $ 502     $ 519     $ 519     $ 510     $ 559     $ 625     $ 641     $ 641  

Paid claims

     (7      (7     (8     (6     (28     (9     (9     (4     (6     (28

Increase (decrease) in reserves

     24        18       (4     (11     27       18       (40     (62     (10     (94
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending Reserves

   $ 518      $ 501     $ 490     $ 502     $ 518     $ 519     $ 510     $ 559     $ 625     $ 519  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss Ratio

     10      7     (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 claims in the fourth quarter of 2023 and the fourth and third quarters of 2022 include payments in relation to agreements on non-performing loans.

(2) 

Direct primary case reserves divided by primary delinquency count.

(3) 

Direct primary case reserves exclude loss adjustment expenses (LAE), pool, incurred but not reported (IBNR) and reinsurance reserves. Other includes LAE, pool, IBNR and reinsurance reserves.

 

18


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Delinquency Metrics—Enact Segment

(dollar amounts in millions)

 

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

Primary Loans

                     

Primary loans in-force

    974,516       977,832       973,280       965,544         960,306       949,052       946,891       941,689    

Primary delinquent loans

    20,432       19,241       18,065       18,633         19,943       18,856       19,513       22,571    

Primary delinquency rate

    2.10     1.97     1.86     1.93       2.08     1.99     2.06     2.40  
 

Beginning Number of Primary Delinquencies

    19,241       18,065       18,633       19,943       19,943       18,856       19,513       22,571       24,820       24,820  

New delinquencies

    11,706       11,107       9,205       9,599       41,617       10,304       9,121       7,847       8,724       35,996  

Delinquency cures

    (10,317     (9,778     (9,609     (10,771     (40,475     (9,024     (9,588     (10,806     (10,860     (40,278

Paid claims

    (186     (147     (156     (126     (615     (190     (187     (90     (107     (574

Rescissions and claim denials

    (12     (6     (8     (12     (38     (3     (3     (9     (6     (21
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending Number of Primary Delinquencies

    20,432       19,241       18,065       18,633       20,432       19,943       18,856       19,513       22,571       19,943  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Composition of Cures

                     

Reported delinquent and cured-intraquarter

    2,058       1,877       1,661       2,016         1,489       1,598       1,306       1,581    

Number of missed payments delinquent prior to cure:

                     

3 payments or less

    5,235       4,792       4,516       5,238         4,179       3,719       4,037       3,902    

4 - 11 payments

    2,331       2,265       2,448       2,431         2,001       2,279       2,484       2,315    

12 payments or more

    693       844       984       1,086         1,355       1,992       2,979       3,062    
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total

    10,317       9,778       9,609       10,771         9,024       9,588       10,806       10,860    
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Primary Delinquencies by Missed Payment Status

                     

3 payments or less

    10,166       9,398       8,162       7,876         8,920       7,446       6,442       6,837    

4 - 11 payments

    6,934       6,381       6,229       6,714         6,466       6,119       6,372       6,875    

12 payments or more

    3,332       3,462       3,674       4,043         4,557       5,291       6,699       8,859    
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Primary Delinquencies

    20,432       19,241       18,065       18,633         19,943       18,856       19,513       22,571    
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   
                         
    December 31, 2023                                            

Direct Primary Case Reserves(1) and Percentage

Reserved by Payment Status

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

3 payments or less in default

  $ 88     $ 629       14              

4 - 11 payments in default

    205       469       44              

12 payments or more in default

    184       200       92              
 

 

 

   

 

 

                 

Total

  $ 477     $ 1,298       37              
 

 

 

   

 

 

                 
    December 31, 2022                                            

Direct Primary Case Reserves(1) and Percentage

Reserved by Payment Status

  Direct Primary
Case Reserves
    Direct Primary
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

FOURTH QUARTER 2023

 

Portfolio Quality Metrics—Enact Segment

(amounts in millions)

 

     December 31, 2023  

Policy Year

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

2008 and prior

     18   $ 5,621        2   $ 1,449        2     8.61

2009-2015

     4       3,383        1       881        1       4.55

2016

     4       4,659        2       1,248        2       3.20

2017

     5       5,321        2       1,403        2       3.59

2018

     6       5,750        2       1,476        2       4.42

2019

     8       13,773        5       3,544        5       2.77

2020

     15       44,486        17       11,697        17       1.70

2021

     21       70,045        27       17,846        27       1.65

2022

     16       59,267        23       14,907        22       1.57

2023

     3       50,632        19       13,078        20       0.47
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

Total

     100   $ 262,937        100   $ 67,529        100     2.10
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

     December 31, 2023     September 30, 2023     December 31, 2022  
     Direct Primary
Risk In-Force
     % of Total     Direct Primary
Risk In-Force
     % of Total     Direct Primary
Risk In-Force
     % of Total  

Loan-to-value ratio

               

95.01% and above

   $ 12,878        19   $ 12,595        19   $ 11,136        18

90.01% to 95.00%

     31,781        47       31,696        47       30,079        48  

85.01% to 90.00%

     19,163        28       18,945        28       17,621        28  

85.00% and below

     3,707        6       3,820        6       3,955        6  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 67,529        100   $ 67,056        100   $ 62,791        100
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

     December 31, 2023     September 30, 2023     December 31, 2022  
     Direct Primary
Risk In-Force
     % of Total     Direct Primary
Risk In-Force
     % of Total     Direct Primary
Risk In-Force
     % of Total  

Credit Quality

               

Over 760

   $ 28,363        42   $ 28,014        42   $ 25,807        41

740 - 759

     11,096        17       11,009        17       10,154        16  

720 - 739

     9,621        14       9,553        14       8,931        14  

700 - 719

     7,623        11       7,615        12       7,317        12  

680 - 699

     5,557        8       5,582        8       5,428        9  

660 - 679(2)

     2,908        4       2,901        4       2,767        5  

640 - 659

     1,565        3       1,569        2       1,540        2  

620 - 639

     635        1       647        1       665        1  

<620

     161        —        166        —        182        —   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 67,529        100   $ 67,056        100   $ 62,791        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

FOURTH QUARTER 2023

Adjusted Operating Income (Loss)—Long-Term Care Insurance Segment

(amounts in millions)

 

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

REVENUES:

                       

Premiums

   $ 615      $ 621     $ 611     $ 616     $ 2,463     $ 639     $ 637     $ 617     $ 607     $ 2,500  

Net investment income

     489        482       470       473       1,914       470       497       486       447       1,900  

Net investment gains (losses)

     64        (21     62       9       114       20       (47     5       41       19  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     1,168        1,082       1,143       1,098       4,491       1,129       1,087       1,108       1,095       4,419  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                       

Benefits and other changes in policy reserves

     964        953       941       944       3,802       965       956       942       925       3,788  

Liability remeasurement (gains) losses

     188        104       61       (32     321       (255     3       23       (88     (317

Acquisition and operating expenses, net of deferrals

     116        109       108       119       452       100       122       95       96       413  

Amortization of deferred acquisition costs and intangibles

     18        17       18       18       71       18       19       18       19       74  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     1,286        1,183       1,128       1,049       4,646       828       1,100       1,078       952       3,958  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     (118      (101     15       49       (155     301       (13     30       143       461  

Provision (benefit) for income taxes

     (18      (13     10       18       (3     79       (1     9       38       125  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     (100      (88     5       31       (152     222       (12     21       105       336  

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:

                       

Net investment (gains) losses

     (64      21       (62     (9     (114     (20     47       (5     (41     (19

Expenses related to restructuring

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

Taxes on adjustments

     13        (4     13       2       24       4       (9     —        9       4  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

   $ (151    $ (71   $ (43   $ 23     $ (242   $ 204     $ 26     $ 17     $ 73     $ 320  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liability remeasurement (gains) losses:

                       

Cash flow assumption updates

   $ 61      $ (6   $ (24   $ 21     $ 52     $ (303   $ (10   $ (20   $ (2   $ (335

Actual to expected experience

     127        110       85       (53     269       48       13       43       (86     18  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 188      $ 104     $ 61     $ (32   $ 321     $ (255   $ 3     $ 23     $ (88   $ (317
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratio of the liability remeasurement (gains) losses to beginning reserves(3)

     0.45      0.25     0.15     (0.08 )%      0.77     (0.62 )%      —      0.06     (0.22 )%      (0.78 )% 
                           

 

(1) 

In the fourth quarter of 2023, the liability remeasurement loss of $188 million in the company’s long-term care insurance business reflected an unfavorable impact from annual cash flow assumption updates of $61 million, including updates to its healthy life assumptions to better align near-term experience for cost of care, mortality, incidence and lapse. These adverse assumption updates were partially offset by a favorable update to disabled life mortality assumptions to reflect an expectation that mortality will continue at elevated levels in the near term post-COVID-19. The company also evaluated its assumptions regarding expectations of future premium rate increase approvals and benefit reductions and made no significant changes to its 2023 multi-year in-force rate action plan. However, the company did increase the value of its assumption for future approvals and benefit reductions based on recent rate increase approval experience, regulatory support and legal settlement results. In addition, the company updated its assumptions for the third long-term care insurance legal settlement primarily impacting its Choice II policies, which represents approximately 35% of the overall block. As previously disclosed, the third legal settlement was mostly comprised of profitable uncapped cohorts. Cohorts with profits or margin have a net premium ratio below 100% and therefore have less of an impact on the liability remeasurement (gain) loss in the income statement.

(2) 

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.

(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 locked-in discount rate as of each applicable quarter.

 

22


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Statutory Impact of In-Force Rate Actions—Long-Term Care Insurance Segment

(amounts in millions)

 

     2023     2022  
     4Q      3Q     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)

   $ 232      $ 231     $ 224     $ 219     $ 906     $ 224     $ 220     $ 207     $ 192     $ 843  

Reserve changes(2)

     119        99       104       94       416       124       120       113       132       489  
 

Settlement impacts - reserve changes

     232        169       97       93       591       78       9       19       148       254  

Settlement impacts - litigation expenses and settlement payments

     (116      (102     (54     (56     (328     (45     (10     (6     (43     (104
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Settlement impacts, net

     116        67       43       37       263       33       (1     13       105       150  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Statutory earnings from in-force rate actions

   $ 467      $ 397     $ 371     $ 350     $ 1,585     $ 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

FOURTH QUARTER 2023

Adjusted Operating Income (Loss)—Life and Annuities Segment

(amounts in millions)

 

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

REVENUES:

                       

Premiums

   $ 47      $ 48     $ 50     $ 62     $ 207     $ 45     $ 55     $ 60     $ 74     $ 234  

Net investment income

     256        261       261       264       1,042       268       271       265       279       1,083  

Net investment gains (losses)

     (14      (18     (7     (10     (49     (3     (15     —        14       (4

Policy fees and other income

     160        158       165       163       646       167       169       164       169       669  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     449        449       469       479       1,846       477       480       489       536       1,982  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                       

Benefits and other changes in policy reserves

     248        229       240       246       963       226       247       (108     255       620  

Liability remeasurement (gains) losses

     228        12       9       17       266       (12     14       1       24       27  

Changes in fair value of market risk benefits and associated hedges

     14        (24     (19     17       (12     (56     (27     20       (41     (104

Interest credited

     124        127       126       126       503       125       128       126       125       504  

Acquisition and operating expenses, net of deferrals

     55        54       51       53       213       54       57       416       77       604  

Amortization of deferred acquisition costs and intangibles

     41        45       44       51       181       54       57       63       66       240  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     710        443       451       510       2,114       391       476       518       506       1,891  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     (261      6       18       (31     (268     86       4       (29     30       91  

Provision (benefit) for income taxes

     (56      1       3       (7     (59     17       —        (7     6       16  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     (205      5       15       (24     (209     69       4       (22     24       75  
 

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:

                       

Net investment (gains) losses

     14        18       7       10       49       3       15       —        (14     4  

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

     13        (26     (23     14       (22     (64     (32     8       (54     (142

Expenses related to restructuring

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

Pension plan termination costs

     —         —        —        —        —        2       6       —        —        8  

Taxes on adjustments

     (5      —        3       (4     (6     14       1       (1     14       28  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

   $ (183    $ (3   $ 2     $ (4   $ (188   $ 23     $ (6   $ (15   $ (30   $ (28
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                           

 

(1)  In the fourth quarter of 2023, the liability remeasurement loss of $228 million was primarily driven by an unfavorable impact from cash flow assumption updates in the company’s life insurance products reflecting updates to persistency and mortality assumptions. Additional information is included on page 26.

 

(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

   $ 14      $ (24   $ (19   $ 17     $ (12   $ (56   $ (27   $ 20     $ (41   $ (104

Adjustment for changes in reserves, attributed fees and benefit payments

     (1      (2     (4     (3     (10     (8     (5     (12     (13     (38
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ 13      $ (26   $ (23   $ 14     $ (22   $ (64   $ (32   $ 8     $ (54   $ (142
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

25


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Adjusted Operating Income (Loss)—Life and Annuities Segment—Life Insurance

(amounts in millions)

 

     2023     2022  
     4Q(1),(2)      3Q     2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

REVENUES:

                       

Premiums

   $ 47      $ 48     $ 50     $ 62     $ 207     $ 45     $ 55     $ 60     $ 74     $ 234  

Net investment income

     167        169       165       164       665       167       166       164       164       661  

Net investment gains (losses)

     (6      —        (1     (2     (9     1       (7     2       9       5  

Policy fees and other income

     131        130       136       134       531       138       138       133       134       543  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     339        347       350       358       1,394       351       352       359       381       1,443  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                       

Benefits and other changes in policy reserves

     207        184       197       199       787       181       197       217       203       798  

Liability remeasurement (gains) losses

     229        22       7       18       276       (10     16       4       22       32  

Interest credited

     98        99       98       98       393       97       98       96       94       385  

Acquisition and operating expenses, net of deferrals

     38        36       34       36       144       39       40       32       56       167  

Amortization of deferred acquisition costs and intangibles

     35        38       36       44       153       45       49       55       57       206  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     607        379       372       395       1,753       352       400       404       432       1,588  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     (268      (32     (22     (37     (359     (1     (48     (45     (51     (145

Benefit for income taxes

     (57      (7     (5     (8     (77     (1     (10     (10     (11     (32
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS

     (211      (25     (17     (29     (282     —        (38     (35     (40     (113
 

ADJUSTMENTS TO LOSS FROM CONTINUING OPERATIONS:

                       

Net investment (gains) losses

     6        —        1       2       9       (1     7       (2     (9     (5

Expenses related to restructuring

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

Pension plan termination costs

     —         —        —        —        —        2       6       —        —        8  

Taxes on adjustments

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

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

   $ (206    $ (25   $ (17   $ (27   $ (275   $ 1     $ (28   $ (37   $ (47   $ (111
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                           

 

(1)  In the fourth quarter of 2023, the company’s life insurance products had an unfavorable impact from cash flow assumption updates of $226 million reflecting updates to its persistency and mortality assumptions. The company made an unfavorable update to its persistency assumptions particularly in certain universal life insurance products with secondary guarantees to better reflect emerging experience, consistent with others in the industry. The company also made unfavorable updates to its mortality assumption in its term universal, universal and term life insurance products to better reflect emerging experience related to more modest mortality improvement and to include an expectation that mortality will continue at elevated levels in the near term post-COVID-19.

(2)  Effective December 31, 2023, the company entered into a binding letter of intent with a third-party to cede, on a yearly renewable term basis, certain term and universal life insurance products. Policy fees and other income included $6 million of ceded deposits and the remeasurement loss reflected higher ceded universal life insurance reserves of $40 million. As a result, this transaction resulted in a gain of $34 million that was deferred as cost of reinsurance in benefits and other changes in policy reserves. Therefore, there was no impact to net income (loss).

   

   

 

26


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Adjusted Operating Income—Life and Annuities Segment—Fixed Annuities

(amounts in millions)

 

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

REVENUES:

                       

Net investment income

   $ 82      $ 85     $ 87     $ 91     $ 345     $ 93     $ 96     $ 93     $ 108     $ 390  

Net investment gains (losses)

     (8      (18     (5     (8     (39     (4     (7     (2     5       (8

Policy fees and other income

     2        1       2       2       7       1       2       2       2       7  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     76        68       84       85       313       90        91       93       115       389  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                       

Benefits and other changes in policy reserves(1)

     35        36       35       39       145       37       42       (332     46       (207

Liability remeasurement (gains) losses

     (1      (10     2       (1     (10     (2     (2     (3     2       (5

Changes in fair value of market risk benefits and associated hedges

     16        (18     (4     8       2       —        (15     (12     (13     (40

Interest credited

     26        26       27       27       106       27       28       29       30       114  

Acquisition and operating expenses, net of deferrals(1)

     8        9       7       8       32       7       7       372       9       395  

Amortization of deferred acquisition costs and intangibles

     2        3       4       3       12       4       4       4       4       16  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     86        46       71       84       287       73       64       58       78       273  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     (10      22       13       1       26       17       27       35       37       116  

Provision (benefit) for income taxes

     (2      5       3       —        6       4       6       7       8       25  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     (8      17       10       1       20       13       21       28       29       91  
 

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:

                       

Net investment (gains) losses

     8        18       5       8       39       4       7       2       (5     8  

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

     14        (18     (5     8       (1     (3     (14     (13     (15     (45

Taxes on adjustments

     (5      —        —        (3     (8     —        1       3       4       8  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 9      $ 17     $ 10     $ 14     $ 50     $ 14     $ 15     $ 20     $ 13     $ 62  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                           

 

(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 $372 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

   $ 16      $  (18   $ (4   $ 8     $ 2     $  —      $  (15   $  (12   $  (13   $  (40

Adjustment for changes in reserves, attributed fees and benefit payments

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

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ 14      $ (18   $ (5   $ 8     $ (1   $ (3   $ (14   $ (13   $ (15   $ (45
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

27


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Adjusted Operating Income—Life and Annuities Segment—Variable Annuities

(amounts in millions)

 

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

REVENUES:

                       

Net investment income

   $ 7      $ 7     $ 9     $ 9     $ 32     $ 8     $ 9     $ 8     $ 7     $ 32  

Net investment gains (losses)

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

Policy fees and other income

     27        27         27       27        108         28         29       29         33         119  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     34        34       35       36       139       36       37       37       40       150  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                       

Benefits and other changes in policy reserves

     6        9       8       8       31       8       8       7       6       29  

Changes in fair value of market risk benefits and associated hedges

     (2      (6     (15     9       (14     (56     (12     32       (28     (64

Interest credited

     —         2       1       1       4       1       2       1       1       5  

Acquisition and operating expenses, net of deferrals

     9        9       10       9       37       8       10       12       12       42  

Amortization of deferred acquisition costs and intangibles

     4        4       4       4       16       5       4       4       5       18  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     17        18       8       31       74       (34     12       56       (4     30  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     17        16       27       5       65       70       25       (19     44       120  

Provision (benefit) for income taxes

     3        3       5       1       12       14       4       (4     9       23  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     14        13       22       4       53       56       21       (15     35       97  
 

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:

                       

Net investment (gains) losses

     —         —        1       —        1       —        1       —        —        1  

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

     (1      (8     (18     6       (21     (61     (18     21       (39     (97

Taxes on adjustments

     1        —        4       (1     4       13       3       (4     8       20  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME

   $ 14      $ 5     $ 9     $ 9     $ 37     $ 8     $ 7     $ 2     $ 4     $ 21  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                           

 

(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

   $ (2    $ (6   $ (15   $ 9     $ (14   $ (56   $ (12   $ 32     $ (28   $ (64

Adjustment for changes in reserves, attributed fees and benefit payments

     1        (2     (3     (3     (7     (5     (6     (11     (11     (33
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ (1    $ (8   $ (18   $ 6     $ (21   $ (61   $ (18   $ 21     $ (39   $ (97
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

28


 

Corporate and Other

                      

 

29


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

Adjusted Operating Loss—Corporate and Other(1)

(amounts in millions)

 

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

REVENUES:

                       

Premiums

   $ 2      $ 3     $ 2     $ 2     $ 9     $ 1     $ 2     $ 1     $ 2     $ 6  

Net investment income

     8        3       4       4       19       4       1       —        3       8  

Net investment gains (losses)

     (11      (4     (3     (10     (28     (21     4       15       (13     (15

Policy fees and other income

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

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     (2      1       3       (4     (2     (16     6       17       (8     (1
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                       

Benefits and other changes in policy reserves

     (3      (1     (2     (3     (9     —        (4     (4     (3     (11

Acquisition and operating expenses, net of deferrals

     21        13       15       16       65       11       11       10       9       41  

Amortization of deferred acquisition costs and intangibles

     1        —        —        —        1       —        —        —        —        —   

Interest expense

     17        17       16       16       66       14       14       13       13       54  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     36        29       29       29       123       25       21       19       19       84  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     (38      (28     (26     (33     (125     (41     (15     (2     (27     (85

Provision (benefit) for income taxes

     (5      (6     (4     (5     (20     (16     2       3       (5     (16
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM CONTINUING OPERATIONS

     (33      (22     (22     (28     (105     (25     (17     (5     (22     (69
 

ADJUSTMENTS TO LOSS FROM CONTINUING OPERATIONS:

                       

Net investment (gains) losses

     11        4       3       10       28       21       (4     (15     13       15  

(Gains) losses on early extinguishment of debt

     (1      —        —        (1     (2     (1     3       1       3       6  

Expenses related to restructuring

     —         —        —        4       4       1       —        —        —        1  

Taxes on adjustments

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

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING LOSS

   $ (25    $ (18   $ (20   $ (18   $ (81   $ (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

FOURTH QUARTER 2023

Investments Summary

(amounts in millions)

 

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

   $ 27,302        43    $ 25,148        42   $ 26,413        43   $ 26,894        44   $ 26,047        43

Private fixed maturity securities

     11,016        18        10,432        17       10,808        18       11,182        18       11,126        19  

Residential mortgage-backed securities(1)

     907        1        891        2       935        1       986        2       995        2  

Commercial mortgage-backed securities

     1,413        2        1,495        3       1,674        3       1,814        3       1,900        3  

Other asset-backed securities

     2,199        4        2,163        4       2,164        4       2,113        3       2,117        3  

State and political subdivisions

     2,302        4        2,164        4       2,343        4       2,403        4       2,399        4  

Non-investment grade fixed maturity securities

     1,642        3        1,675        3       1,733        3       1,989        3       1,999        3  

Equity securities:

                            

Common stocks and mutual funds

     347        1        316        1       326        1       306        1       258        1  

Preferred stocks

     49        —         47        —        52        —        58        —        61        —   

Commercial mortgage loans, net

     6,802        10        6,793        11       6,852        11       6,891        11       7,010        11  

Policy loans

     2,220        4        2,233        4       2,270        4       2,133        3       2,139        3  

Limited partnerships

     2,821        5        2,699        5       2,585        4       2,456        4       2,331        4  

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

     2,242        4        2,023        3       2,196        3       1,759        3       1,802        3  

Other invested assets:

   Derivatives:                             
  

Interest rate swaps

     55        —         12        —        30        —        42        —        24        —   
  

Foreign currency swaps

     10        —         15        —        16        —        17        —        20        —   
  

Equity index options

     15        —         11        —        15        —        10        —        6        —   
  

Forward bond purchase commitments

     51        —         —         —        —         —        —         —        —         —   
  

Other

     573        1        577        1       564        1       541        1       513        1  
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total invested assets and cash

   $ 61,966        100    $ 58,694        100   $ 60,976        100   $ 61,594        100   $ 60,747        100
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Public Fixed Maturity Securities—Credit Quality:

                                                                  

NRSRO(2) Designation

                            
   

       AAA

   $ 2,559        8    $ 2,533        8   $ 5,936        19   $ 6,112        19   $ 6,067        19

        AA

     6,170        19        5,650        19       2,896        9       2,872        9       2,859        9  

        A

     9,287        29        8,359        28       8,597        27       8,699        27       8,398        27  

       BBB

     13,645        42        12,923        43       13,649        43       14,056        43       13,623        43  

        BB

     498        2        519        2       564        2       786        2       776        2  

        B

     30        —         20        —        23        —        41        —        34        —   

     CCC and lower

     —         —         —         —        —         —        —         —        —         —   
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total public fixed maturity securities

   $ 32,189        100    $ 30,004        100   $ 31,665        100   $ 32,566        100   $ 31,757        100
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Private Fixed Maturity Securities—Credit Quality:

                                                                  

NRSRO(2) Designation

                            
   

       AAA

   $ 832        6    $ 867        6   $ 863        6   $ 860        6   $ 825        6

        AA

     1,477        10        1,352        10       1,416        10       1,422        10       1,421        10  

        A

     4,043        28        3,960        28       4,135        29       4,217        28       4,170        28  

       BBB

     7,126        48        6,649        48       6,845        47       7,154        48       7,221        48  

        BB

     975        7        993        7       1,016        7       1,012        7       1,076        7  

        B

     117        1        121        1       122        1       150        1       113        1  

     CCC and lower

     7        —         7        —        8        —        —         —        —         —   

      Not rated

     15        —         15        —        —         —        —         —        —         —   
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total private fixed maturity securities

   $ 14,592        100    $ 13,964        100   $ 14,405        100   $ 14,815        100   $ 14,826        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

FOURTH QUARTER 2023

 

Fixed Maturity Securities Summary

(amounts in millions)

 

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

   $ 3,494        7    $ 3,112        7   $ 3,389        7   $ 3,441        7   $ 3,341        7

State and political subdivisions

     2,302        5        2,164        5       2,343        5       2,403        5       2,399        5  

Foreign government

     626        1        583        1       625        1       630        1       645        1  

U.S. corporate

     27,985        60        25,956        60       27,043        59       27,872        59       27,119        59  

Foreign corporate

     7,811        17        7,554        17       7,838        17       8,059        17       8,010        17  

Residential mortgage-backed securities

     907        2        891        2       934        2       985        2       995        2  

Commercial mortgage-backed securities

     1,418        3        1,503        3       1,690        4       1,831        4       1,908        4  

Other asset-backed securities

     2,238        5        2,205        5       2,208        5       2,160        5       2,166        5  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total fixed maturity securities

   $ 46,781        100    $ 43,968        100   $ 46,070        100   $ 47,381        100   $ 46,583        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Corporate Bond Holdings - Industry Sector:

                            
   

Investment Grade:

                            

Finance and insurance

   $ 9,045        25    $ 8,541        26   $ 8,871        26   $ 9,149        26   $ 8,986        26

Utilities

     4,904        14        4,503        13       4,653        14       4,788        13       4,591        13  

Energy

     3,181        9        2,967        9       3,022        9       2,882        8       2,813        8  

Consumer - non-cyclical

     4,979        14        4,573        14       4,863        14       4,998        14       4,872        14  

Consumer - cyclical

     1,659        5        1,497        4       1,558        4       1,602        4       1,594        5  

Capital goods

     2,593        7        2,406        7       2,490        7       2,554        7       2,517        7  

Industrial

     1,869        5        1,773        5       1,857        5       1,944        6       1,863        5  

Technology and communications

     3,686        10        3,422        10       3,599        10       3,713        10       3,564        10  

Transportation

     1,498        4        1,371        4       1,428        4       1,459        4       1,439        4  

Other

     895        3        933        3       973        3       1,022        3       1,048        3  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal

     34,309        96        31,986        95       33,314        96       34,111        95       33,287        95  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-Investment Grade:

                            

Finance and insurance

     181        1        176        1       154        —        164        1       153        1  

Utilities

     54        —         72        —        46        —        47        —        47        —   

Energy

     218        1        218        1       228        1       407        1       409        1  

Consumer - non-cyclical

     142        —         135        —        139        —        150        —        151        —   

Consumer - cyclical

     211        1        262        1       273        1       291        1       299        1  

Capital goods

     149        —         157        1       172        1       178        1       167        1  

Industrial

     161        —         145        —        149        —        155        —        152        —   

Technology and communications

     228        1        212        1       226        1       247        1       277        1  

Transportation

     28        —         29        —        35        —        37        —        36        —   

Other

     115        —         118        —        145        —        144        —        151        —   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal

     1,487        4        1,524        5       1,567        4       1,820        5       1,842        5  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 35,796        100    $ 33,510        100   $ 34,881        100   $ 35,931        100   $ 35,129        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Fixed Maturity Securities - Contractual Maturity Dates:

                            
   

Due in one year or less

   $ 1,372        3    $ 1,426        3   $ 1,375        3   $ 1,328        3   $ 1,234        3

Due after one year through five years

     8,205        18        8,115        18       8,000        17       8,245        17       7,931        17  

Due after five years through ten years

     12,114        26        11,368        26       11,662        25       11,746        25       11,915        26  

Due after ten years

     20,527        43        18,460        43       20,201        44       21,086        44       20,434        43  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal

     42,218        90        39,369        90       41,238        89       42,405        89       41,514        89  

Mortgage and asset-backed securities

     4,563        10        4,599        10       4,832        11       4,976        11       5,069        11  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total fixed maturity securities

   $ 46,781        100    $ 43,968        100   $ 46,070        100   $ 47,381        100   $ 46,583        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
                                      

 

33


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

U.S. GAAP Net Investment Income Yields

(amounts in millions)

 

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

U.S. GAAP Net Investment Income

                       

Fixed maturity securities - taxable

   $ 557      $ 559     $ 567     $ 561     $ 2,244     $ 562     $ 576     $ 578     $ 580     $ 2,296  

Fixed maturity securities - non-taxable

     —         1       1       1       3       1       2       1       1       5  

Equity securities

     5        1       3       2       11       3       3       2       2       10  

Commercial mortgage loans

     75        76       75       76       302       81       81       78       81       321  

Policy loans

     57        58       54       55       224       55       55       51       50       211  

Limited partnerships

     41        31       17       28       117       22       38       32       7       99  

Other invested assets

     72        69       70       68       279       71       67       66       63       267  

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

     27        28       22       18       95       12       7       1       —        20  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross investment income before expenses and fees

     834        823       809       809       3,275       807       829       809       784       3,229  

Expenses and fees

     (24      (22     (24     (22     (92     (20     (21     (22     (20     (83
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

   $ 810      $ 801     $ 785     $ 787     $ 3,183     $ 787     $ 808     $ 787     $ 764     $ 3,146  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Annualized Yields

                       

Fixed maturity securities - taxable

     4.5      4.5     4.5     4.4     4.5     4.4     4.5     4.5     4.4     4.5

Fixed maturity securities - non-taxable

     —       5.6     4.9     4.6     4.2     4.0     7.1     3.6     3.6     4.7

Equity securities

     5.3      1.1     3.2     2.3     3.0     4.0     4.6     3.4     3.7     4.0

Commercial mortgage loans

     4.4      4.5     4.4     4.4     4.4     4.6     4.6     4.5     4.7     4.6

Policy loans

     10.2      10.3     9.8     10.3     10.2     10.3     10.2     9.7     9.8     10.0

Limited partnerships(1)

     5.9      4.7     2.7     4.7     4.5     3.9     7.0     6.2     1.4     4.7

Other invested assets(2)

     50.1      48.3     50.7     51.6     50.5     56.6     57.0     62.6     64.8     59.9

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

     5.1      5.3     4.5     4.0     4.7     2.9     1.7     0.3     —      1.2
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross investment income before expenses and fees

     5.2      5.1     5.0     5.0     5.1     5.0     5.1     4.9     4.8     5.0

Expenses and fees

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

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

     5.0      5.0     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

FOURTH QUARTER 2023

 

Net Investment Gains (Losses)—Detail

(amounts in millions)

 

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

Realized investment gains (losses):

                     

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

                     

Fixed maturity securities:

                     

U.S. corporate

  $ (15   $ (5   $ (39   $ (8   $ (67   $ (25   $ (23   $ (2   $ (12   $ (62

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

    (30     2       1       1       (26     —        9       —        6       15  

Foreign corporate

    (5     (3     1       (3     (10     (6     (7     (1     (2     (16

Foreign government

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

Mortgage-backed securities

    (18     (5     (2     (5     (30     (4     (5     (1     —        (10

Asset-backed securities

    —        —        9       —        9       —        (1     —        —        (1
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

    (68     (11     (30     (16     (125     (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)

    (68     (11     (31     (16     (126     (35     (27     (4     (8     (74
 

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

    (1     (2     11       (15     (7     —        —        —        —        —   

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

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

Net unrealized gains (losses) on equity securities still held

    33       (12     21       11       53       11       (14     (26     (6     (35

Net unrealized gains (losses) on limited partnerships

    57       14       40       —        111       36       (24     24       35       71  

Commercial mortgage loans

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

Derivative instruments

    24       (28     (1     12       7       (12     7       18       19       32  

Other

    (5     (3     —        (1     (9     (6     —        5       3       2  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment gains (losses), gross

    38       (43     39       (11     23       (5     (58     19       42       (2

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

    —        —        2       —        2       —        —        —        —        —   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment gains (losses), net

  $ 38     $ (43   $ 41     $ (11   $ 25     $ (5   $ (58   $ 19     $ 42     $ (2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                         

 

35


 

 

Reconciliations of Non-GAAP Measures

  

 

 

 

 

36


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

Reconciliation of Operating ROE

(amounts in millions)

 

Quarterly Average ROE

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

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

  $ (212   $ 29     $ 137     $ 122     $ 381  

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

  $ 10,156     $ 10,299     $ 10,307     $ 10,269     $ 10,069  

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

    (8.4 )%      1.1     5.3     4.8     15.1

Operating ROE

         

Adjusted operating income (loss) for the period ended(1)

  $ (230   $ 42     $ 85     $ 144     $ 338  

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

  $ 10,156     $ 10,299     $ 10,307     $ 10,269     $ 10,069  

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

    (9.1 )%      1.6     3.3     5.6     13.4

Non-GAAP Definition for Operating ROE

The company references the non-GAAP financial measure entitled “operating return on equity” or “operating ROE.” The company defines operating ROE as adjusted operating income (loss) divided by average ending Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss) over two consecutive quarters. 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 (loss) available to Genworth Financial, Inc.’s common stockholders and adjusted operating income (loss) from page 9 herein.

(2) 

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

 

37


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2023

 

Reconciliation of Consolidated Expense Ratio

(amounts in millions)

 

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

(A)

   Acquisition and operating expenses, net of deferrals    $ 248      $ 228     $ 226     $ 240     $ 942     $ 225     $ 245     $ 579     $ 236     $ 1,285  

(B)

   Premiums    $ 904      $ 915     $ 902     $ 915     $ 3,636     $ 918     $ 929     $ 916     $ 917     $ 3,680  
 

(A) / (B)

   GAAP Basis Expense Ratio      27      25     25     26     26     25     26     63     26     35
 
   Adjusted Expense Ratio                        
   Acquisition and operating expenses, net of deferrals    $ 248      $ 228     $ 226     $ 240     $ 942     $ 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    $ 248      $ 228     $ 225     $ 227     $ 928     $ 225     $ 225     $ 214     $ 236     $ 900  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   Premiums    $ 904      $ 915     $ 902     $ 915     $ 3,636     $ 918     $ 929     $ 916     $ 917     $ 3,680  
   Add: Policy fees and other income      159        158       166       163       646       167       169       165       170       671  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(D)

   Adjusted revenues    $ 1,063      $ 1,073     $ 1,068     $ 1,078     $ 4,282     $ 1,085     $ 1,098     $ 1,081     $ 1,087     $ 4,351  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(C) / (D)

   Adjusted expense ratio(3)      23      21     21     21     22     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

FOURTH QUARTER 2023

 

Reconciliation of Reported Yield to Core Yield

 

          2023     2022  
     (Assets - amounts in billions)    4Q      3Q     2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  
   Reported - Total Invested Assets and Cash    $ 62.0      $ 58.7     $ 61.0     $ 61.6     $ 62.0     $ 60.7     $ 60.1     $ 63.2     $ 68.2     $ 60.7  
   Subtract:                        
  

Unrealized gains (losses)

     (2.4      (5.8     (3.7     (3.0     (2.4     (4.2     (4.9     (1.9     3.0       (4.2
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   Adjusted end of period invested assets and cash    $ 64.4      $ 64.5     $ 64.7     $ 64.6     $ 64.4     $ 64.9     $ 65.0     $ 65.1     $ 65.2     $ 64.9  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(A)

   Average Invested Assets and Cash Used in Reported and Core Yield Calculation    $ 64.5      $ 64.6     $ 64.6     $ 64.8     $ 64.6     $ 65.0     $ 65.0     $ 65.2     $ 65.4     $ 65.2  
 
   (Income - amounts in millions)                        
 

(B)

   Reported - Net Investment Income    $ 810      $ 801     $ 785     $ 787     $ 3,183     $ 787     $ 808     $ 787     $ 764     $ 3,146  
   Subtract:                        
  

Bond calls and commercial mortgage loan prepayments

     —         1       —        2       3       6       6       7       10       29  
  

Other non-core items(1)

     4        1       3       1       9       (1     —        —        —        (1
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(C)

   Core Net Investment Income    $ 806      $ 799     $ 782     $ 784     $ 3,171     $ 782     $ 802     $ 780     $ 754     $ 3,118  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(B) / (A)

   Reported Yield      5.03      4.96     4.86     4.86     4.92     4.84     4.97     4.83     4.67     4.83

(C) / (A)

   Core Yield      5.00      4.95     4.84     4.84     4.91     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.

 

39