Presentation Q3 2024
3Q Investor Presentation
Earnings Summary
Cautionary Note Regarding Forward-Looking Statements
This presentation 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 the company's future business and financial performance. Examples of forward-looking statements include statements the company makes relating to potential dividends or share repurchases; future retuof capital by
Non-GAAP and Other Items
All financial results are as of
Unless otherwise noted, all references in this presentation to net income (loss), net income (loss) per share, adjusted operating income (loss) and adjusted operating income (loss) per share should be read as net income (loss) available to
Statutory Accounting Data
The company presents certain supplemental statutory data for
This supplemental statutory data includes the company action level risk-based capital (RBC) ratio for GLIC and its consolidating life insurance subsidiaries as well as combined statutory pre-tax earnings from the principal
2
Financial Performance in 3rd Quarter
- Net income1 of
$85M , or$0.19 per diluted share, and adjusted operating income1,2 of$48M , or$0.11 per diluted share - Enact reported adjusted operating income of
$148M 1; distributed$81M in capital returns toGenworth U.S. life insurance companies' RBC3 ratio of 317%4 reflects strong year-to-date pre-tax statutory incomeGenworth holding company cash and liquid assets of$369M 5 at quarter-end
1 All references reflect amounts available to
3 presentation for additional information; 3 Risk-based capital ratio based on company action level for GLIC consolidated; 4 Estimate for the third quarter of 2024 due to timing of the preparation and filing of statutory financial statements; 5 Includes approximately
3rd Quarter Progress on
Create shareholder value through Enact's growing market value and capital returns
- Growing Enact book value
- Executed
$36M in share repurchases in the quarter; -
$144M executed year-to-date through October at an average price of$6.29 per share
- Repurchased
$17M in principal of holding company debt at a discount
Maintain self-sustaining, customer-centric legacy insurance companies, including the LTC, life and annuity businesses
- Continued progress on LTC1 MYRAP2 with
$124M of gross incremental premium approvals in the quarter; - Approximately
$30B estimated NPV3 achieved from IFAs4 since 2012 U.S. life insurance companies'
RBC5 ratio of 317%6
Drive future growth through CareScout with innovative, consumer-focused aging care services and funding solutions
- Continuing to expand nationwide CareScout Quality Network
- Network available in 49 states through October
- Developing long-term care insurance products to meet growing demand
4 1
3Q24 CareScout Update
CareScout Quality Network (CQN) Build-Out
Percentage of Aged 65+
of Network Providers and Number of Active States
Buildout and growth of the CareScout Quality Network
- Nationwide network of high-quality home care providers
- Providers undergo rigorous credentialing across 20+ metrics
- Over 90% of providers have agreed to rates below the median cost of care1 in their respective zip codes, with many agreeing to 20% discounts off their standard rates for CareScout
2025 plan to focus on further expansion of the company's home care network and onboarding Assisted Living Communities in large MSAs2
Looking to extend CareScout Services to other insurance companies and launch a direct-to-consumer offering in 2025
100% |
|
80% |
|
(%) |
60% |
Coverage |
40% |
20%
0%
Active # of States
Coverage (%) |
Providers (#) |
|||
76% |
79% |
|||
69% |
||||
422 |
||||
390 |
||||
45% |
302 |
|||
93 |
181 |
|||
10% |
||||
4Q23 |
1Q24 |
2Q24 |
3Q24 |
Oct '24 |
16 |
30 |
40 |
43 |
49 |
600
500 |
|
400 |
(#) |
300 |
Providers |
200 |
100
0
- Developing and engaging with regulators on an initial product with capped coverage limits and conservative assumptions to reduce the need for future premium increases
- Plan to enter the market in 2025
5
•1 Genworth Cost of Care Survey Results as of 2023 2 Metropolitan Statistical Area
of
3Q24 Results Summary - Genworth Consolidated (GAAP)
Enact: $148M1
- Continued favorable cure performance driving reserve releases
- Higher investment income with higher yields and average invested assets versus the prior year
- Current quarter reflected an actual to expected experience loss, primarily driven by higher claims and lower terminations
- Results included favorable impact from cash flow assumption updates, primarily related to higher approval amounts of certain IFAs
- Prior quarter included a
$24M pre-tax benefit from net insurance recoveries
Life and Annuities:
- Life insurance loss of
$40M reflected unfavorable mortality - Annuities income of
$13M reflected unfavorable mortality and lower net spread income primarily from block runoff
Corporate and Other:
- Current quarter loss up sequentially primarily driven by timing of
tax related items in the prior quarter |
|
6 |
Reflects |
•1 |
Adjusted Operating Income (Loss)1 ($M)
3Q24 |
2Q24 |
3Q23 |
48 |
125 |
42 |
148 |
165 |
134 |
||||||||||
(46) |
(29) |
|||||||||||
(1) |
(71) |
|||||||||||
(10) |
||||||||||||
(27) |
||||||||||||
(3) |
||||||||||||
(27) |
(18) |
|||||||||||
Net Income |
Net Income |
Net Income |
||||||||||
85 |
76 |
29 |
||||||||||
Enact |
Long-Term Care |
Life & Annuities |
Corporate & Other |
|||||||||
Insurance |
Enact Segment
Primary IIF1 ($B)
268 |
266 |
262 |
3Q24 |
2Q24 |
3Q23 |
Portfolio up 2% year-over-year driven by new insurance written (NIW) and continued elevated persistency
Earned Premiums ($M)
249 |
244 |
243 |
3Q24 |
2Q24 |
3Q23 |
|
Primary NIW |
13,591 |
13,619 |
14,391 |
Earned premiums were higher versus prior quarter and prior year as IIF growth was partially offset by higher ceded premiums
Primary NIW was down 6% versus the prior year primarily driven by Enact's lower estimated market share
7
1 Insurance in-force
Enact Segment
Benefits & Changes in |
|||
Policy Reserves ($M) |
|||
(Benefit) / Loss |
|||
3Q24 |
2Q24 |
3Q23 |
|
|
|
|
|
Loss Ratio |
5% |
(7)% |
7% |
Primary Delqs (#) |
21,027 |
19,051 |
19,241 |
Primary New Delqs (#) |
12,964 |
10,461 |
11,107 |
Primary Paid Claims (#) |
220 |
160 |
147 |
Primary Cures1 (#) |
10,768 |
10,742 |
9,784 |
Pre-tax reserve release of
Primary delinquency rate of 2.2% in line with pre-pandemic levels
New delinquencies increased 17% to 12,964 from 11,107 in the prior year primarily from continued seasoning of large, newer books
Continued strong cure performance
Sufficiency to PMIERs2 ($M)
173% |
169% |
162% |
2,190 |
2,057 |
2,017 |
3Q24 |
2Q24 |
3Q23 |
||
Net Sufficiency to Compliance |
Sufficiency Ratio3 |
|||
Enact paid a quarterly dividend of
Estimated PMIERs sufficiency ratio was 173%,
8•1 Includes rescissions and claim denials; 2 Private Mortgage Insurer Eligibility Requirements (PMIERs), company estimate for the third quarter of 2024 due to the timing of the PMIERs filing;
•3 Calculated as available assets divided by required assets as defined within PMIERs
Proactively Managing LTC Risk
Stabilizing LTC legacy block through the MYRAP to protect claims-paying ability
Focused on cash flows, economic value, and statutory earnings
- GAAP results do not impact cash flows or economic value
Strong track record demonstrated over 12+ years
- Actuarial justified premium increases
- Reduction in rich policyholder benefits (lifetime policies, inflation riders)
Continuing to work with state insurance regulators
- Solutions to strengthen
Genworth's claims-paying ability and support customers with a wide range of benefit reduction options
- No plan to contribute capital from
Genworth holding company - No plan to retucapital
Additional risk mitigation factors to build resiliency
- Statutory capital and surplus of
$3.7B - Potential for claims savings with the CareScout services business and benefits from Live Well | Age Well program
Approximately
present value achieved since 2012
56.9% benefit reduction rate1on a cumulative
basis
3 favorable legal settlements covering ~70%
of the block; accelerated benefit reductions & reduced tail-risk
Evaluating in-force management
actions for further downside protection
9
1 Measured through
LTC In-Force Rate Action Progress
Approvals & Filings
Cumulative Policyholder Responses since 2012
Approved Filings |
2022 |
2023 |
State Filings Approved |
139 |
117 |
Impacted In-Force Premium ($M) |
1,143 |
697 |
Weighted Average % Rate Increase |
48% |
51% |
Approved On Impacted In-Force |
||
Gross Incremental Premium Approved ($M) |
549 |
354 |
Filings Submitted |
2022 |
2023 |
State Filings Submitted |
139 |
144 |
In-Force Premium Submitted ($M) |
1,226 |
989 |
3Q23 YTD 3Q24 YTD
- 72
- 695
43% 44%
227 303
3Q23 YTD 3Q24 YTD
- 54
- 276
37.3% |
44.1% |
45.5% |
50.9% |
56.9% |
|
22.0% |
27.0% |
||||
NFO |
16.4% |
18.0% |
|||
11.6% |
|||||
29.9% |
|||||
RBO |
25.7% |
27.7% |
27.5% |
28.9% |
|
As of: |
2020 |
2021 |
2022 |
2023 |
3Q24 |
Paying Full |
62.7% |
55.9% |
54.5% |
49.1% |
43.1% |
Amount |
|||||
NFO: % of in-force policies that selected non-forfeiture option (NFO)
RBO: % of in-force policies that have selected reduced benefit option (RBO) at least once since 2012
Paying Full Amount: % of in-force policies that have always elected to pay the full rate increase premium
Cumulative benefit reduction rate of 56.9%2, with recent growth driven primarily by additional NFO & RBO options offered to Choice I, PCS I & II, and Choice II policyholders through legal settlements
New filings on |
Significant progress in addressing LTC tail-risk |
including |
|
- Number of policyholders with 5% compound inflation reduced by 35%3 |
|
As of |
- Number of policyholders with lifetime benefits reduced by 51%3 |
MYRAP |
|
•1 Calculated as of 12/31/23; 2 As of |
|
policies in GLIC and GLICNY |
|
10 |
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