Genworth MI Canada Inc. Second Quarter 2013
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Transcript of Genworth MI Canada Inc. Second Quarter 2013
- 1. Genworth MI Canada Inc.SecondQuarter2013 July31,2013
2. Forward-lookingandnon-IFRSstatements Thispresenta?onincludescertainforward-lookingstatements.Theseforward-lookingstatementsinclude,butarenotlimitedto, statementswithrespecttotheCompanysfutureopera?ngandnancialresults,expecta?onsregardingpremiumswriIen, capitalexpenditureplans,dividendpolicyandtheabilitytoexecuteonitsfutureopera?ng,inves?ngandnancialstrategies,and otherstatementsthatarenothistoricalfacts.Theseforward-lookingstatementsmaybeiden?edbytheiruseofwordssuchas may,would,could,will,expects,an?cipates,contemplates,intends,plans,believes,seeks,es?mates,or wordsofsimilarmeaning.ThesestatementsarebasedontheCompanyscurrentassump?ons,includingassump?onsregarding economic,global,poli?cal,business,compe??ve,marketandregulatorymaIers.Theseforward-lookingstatementsare inherentlysubjecttosignicantrisks,uncertain?esandchangesincircumstances,manyofwhicharebeyondthecontrolofthe Company.TheCompanysactualresultsmaydiermateriallyfromthoseexpressedorimpliedbysuchforward-looking statements,includingasaresultofchangesinthefactsunderlyingtheCompanysassump?ons,andtheotherrisksdescribedin theCompanysAnnualInforma?onFormdatedMarch29,2013,itsShortFormBaseShelfProspectusdatedMay31,2012,the ProspectusSupplementstheretoandalldocumentsincorporatedbyreferenceinsuchdocuments.Otherthanasrequiredby applicablelaws,theCompanyundertakesnoobliga?ontopubliclyupdateorreviseanyforward-lookingstatement,whetherasa resultofnewinforma?on,futuredevelopmentsorotherwise. Tosupplementitsnancialstatements,theCompanyusesselectnon-IFRSsnancialmeasures.Non-IFRSsmeasuresusedbythe Companytoanalyzeperformanceincludeunderwri?ngra?ossuchaslossra?o,expensera?oandcombinedra?o,aswellas otherperformancemeasuressuchasnetopera?ngincomeandreturnonnetopera?ngincome.TheCompanybelievesthatthese non-IFRSsnancialmeasuresprovidemeaningfulsupplementalinforma?onregardingitsperformanceandmaybeusefulto investorsbecausetheyallowforgreatertransparencywithrespecttokeymetricsusedbymanagementinitsnancialand opera?onaldecisionmaking.Non-IFRSsmeasuresdonothavestandardizedmeaningsandareunlikelytobecomparabletoany similarmeasurespresentedbyothercompanies.ThesemeasuresaredenedintheCompanysglossary,whichispostedonthe CompanyswebsiteathIp://investor.genworthmicanada.ca.Areconcilia?onfromnon-IFRSsnancialmeasurestothemost readilycomparablemeasurescalculatedinaccordancewithIFRSscanbefoundintheCompanysmostrecentnancial statements,whicharepostedontheCompanyswebsiteandarealsoavailableatwww.sedar.com. Genworth MI Canada Inc.2Q22013 July 31, 2013 3. Netopera?ngincomehigherby11% Q22013Netopera?ngincomeQ22012$88million $79millionOpera?ngReturnonequity12% $0.89Opera?ngearningspershare(diluted)12% $0.79BookValuePerShare(diluted,includingAOCI) 11%CAGR $30.62 $27.88Q22012Genworth MI Canada Inc.$31.32$30.94Q12013Q22013$28.72Q32012Q420123Q22013 July 31, 2013 4. SolidresultsforQ22013 PriorityResultPremiumswriIen$137millionofnewpremiumswriIenPrudentriskmanagementLossra?oof25%Investmentporbolioreturn$5.3billioninvestmentporbolio Bookyieldof3.6%asatJune30,2013CapitalstrengthMinimumcapitaltestof216% Dividendsandreturnto shareholdersQuarterlydividendof$0.32percommonshare Repurchased$50millionincommonsharesGenworth MI Canada Inc.4Q22013 July 31, 2013 5. Broadbasedimprovementindelinquencies Number of delinquencies & Delinquency rateInsurance in-forceJune30 2013March31 2013June30 2012June30 2013Ontario45353364946%BC31833739515%Alberta30133755116%Quebec45150758714%Other2552492269%Total1,7781,9632,408100%Delinquencyrate0.12%0.14%0.17%26%declineinnumberofdelinquenciesoverprioryear Genworth MI Canada Inc.5Q22013 July 31, 2013 6. Canadianmarketupdate Macroeconomicenvironment SolidoutlookforCanadianeconomy2013NewInsuranceWriZen Unemploymentratestable Averagecreditscore732 Monetarypolicysuppor?nggrowth AverageGDS*of23%Housingmarket Homepricesupamodest4% Balancedhousingmarket 89%lockinginthe5-yrxedrate Lowinterestratescon?nue Averagehomepurchaseprice$318K Trendingtowardsasomlanding *GDS=GrossDebtServicewhichrepresentsprincipal,interestandtaxesasa%ofgrossfamilyincome Genworth MI Canada Inc.6Q22013 July 31, 2013 7. Demonstratedtrackrecordofperformance $millions(exceptEPS)Q22013 Q12013 Q22012NetpremiumswriZen$137$84$176Premiumsearned143144148Lossesonclaims(35)(44)(48)Underwriangincome827476Netinvestmentincome (excludinggains/losses)444540$88$85$79$0.89$0.86$0.79$30.94$31.32$27.88Netoperaangincome OperaangEPS(diluted) Bookvaluepershare (dilutedandincludingAOCI)Genworth MI Canada Inc.7Q22013 July 31, 2013 8. Corebusinesssteady,inlinewithmarket PremiumswriZen ($millions)4711 102611 17 3 160Pordolio1213 11 3 10899Renance71Purchase Q212 Q22012QQ312 Q42012QQ113 Q22013 32012 Q412 12013 Q213GrossPW17918111984137Riskpremium(2)(3)(2)--$84 2012productchangeshaveresultedin slowerrealestateac?vity Premiumsfrompurchasesdown10%year- over-yearconsistentwithslowerresale volumes Con?nuedtoselec?velypar?cipatein porbolioinsurance$137NetPW$176 $178 $117(PWrepresentspremiumswriIen)$1.7billioninunearnedpremiums Genworth MI Canada Inc.8Q22013 July 31, 2013 9. Solidunderwri?ngperformance ($millions) PremiumsearnedLosseson claimsUnderwriangprot $148 $14735Underwriang prot48444644252628267677737482Q2'12Expenses Strongporbolioquality&stable economiccondi?onsposi?vely inuencinglossperformance$147 $144 $143Q3'12Q4'12Q1'13Q2'1326Lossra?o32%30%31%31%17%18%19%18%18%Combined raao49%48%50%49% Q2lossra?oof25%,improvedby6 points25%Expensera?o Newreporteddelinquencies declinedby9%sequen?ally43%Consistentunderwriangprot Genworth MI Canada Inc.9Q22013 July 31, 2013 10. Investmentporbolioremainshighquality Balancedhighqualityporbolio 50%federal&provincialbondsCash 5% 41%corporatebondsCommon Equity 5% 95%ofbondsAorhigher Total $5.3billion $193millionposi?vemark-to-market Federal 37%$Billion Corporates 41%Assets(MV) Provincial 13%Pre-taxyield1 Dura?onPordolio $5.3 3.6% 3.6years1Pre-taxequivalentbookyieldamerdividendgross-upofgeneralporbolio(asatJune30,2013)Genworth MI Canada Inc.10Q22013 July 31, 2013 11. Strongcapitalposi?onwithexibility MinimumCapitalTestRaao(MCTraao) 216% 31%156%31%185%162%216%185%Q12013Q22013170% 25%11%17%145%145%145%201020112012InternalMCTraaotargetRepurchased$50millioncommonsharesduringquarter Genworth MI Canada Inc.11Q22013 July 31, 2013 12. Ourcorestrengths! Provenbusinessmodel Disciplinedexecuaon Strongriskfocus Capitalexibility SolidnancialfoundaaonGenworth MI Canada Inc.12Q22013 July 31, 2013 13. Ques?onandAnswer SAMANTHACHEUNGForfurtherinfo:Genworth MI Canada Inc.VPINVESTORRELATIONS 9052875482 [email protected] www.genworth.ca13Q22013 July 31, 2013