Genworth Financial Announces Fourth Quarter 2021 Results
Genworth Financial reported a fourth-quarter net income of $163 million and adjusted operating income of $164 million, down from $267 million and $188 million in Q4 2020. For 2021, net income surged to $904 million, compared to $178 million in 2020. The Enact segment showed strong performance with a 9% growth in primary insurance, while the U.S. Life Insurance segment achieved $41 million in adjusted operating income. Significant debt retirement totaling $2.1 billion was noted. The cash and liquid assets at year-end were $356 million.
- Full-year net income increased to $904 million, up from $178 million in 2020.
- Successfully retired $2.1 billion in holding company debt, enhancing financial stability.
- Adjusted operating income from the Enact segment was $125 million, with primary insurance in force up 9%.
- Fourth-quarter net income declined 39% to $163 million compared to Q4 2020.
- U.S. Life Insurance segment reported an adjusted operating loss of $98 million, worsened from a $20 million loss in Q4 2020.
- Life Insurance segment faced an unfavorable charge of $70 million after-tax due to assumption changes related to pre-COVID-19 mortality.
Fourth Quarter Net Income of
2021 Full Year
-
Enact segment adjusted operating income of
, with nine percent annual growth in primary insurance in force and a loss ratio of three percent$125 million -
Enact’s PMIERs1 sufficiency ratio estimated at 165 percent, approximately
above published requirements$2.0 billion -
U.S. Life Insurance segment adjusted operating income of driven by long term care insurance (LTC) results benefitting from in force rate actions and higher net investment income$41 million -
Annual
U.S. GAAP assumption review completed forU.S. Life Insurance segment:-
LTC
U.S. GAAP active life margins remained positive and in the prior year range of to$0.5 $1.0 billion -
Net unfavorable impact of
after-tax in life insurance$70 million
-
LTC
-
Strong U.S. Life Insurance companies’ statutory income driving estimated year-end RBC to290% -
Received
dividend payment from Enact$163 million -
Significant holding company debt retirement in the fourth quarter of 2021 and approximately
principal retired in the year$2.1 billion -
Genworth holding company cash and liquid assets of at year-end$356 million
The company reported full year net income of
“Genworth delivered strong operating performance, including outstanding statutory results in its
Fourth Quarter of 2021 Strategic Highlights
-
Reduced holding company debt by
in the fourth quarter, including full retirement of the senior notes due in$518 million August 2023 ( principal) and reduction of the$400 million February 2024 senior notes by principal. As of$118 million December 31, 2021 ,Genworth had approximately of parent holding company long-term debt outstanding and$1.2 billion in cash and liquid assets.$356 million -
Continued progress against LTC multi-year rate action plan, with an estimated
net present value from achieved LTC rate actions since 2012.$19.6 billion -
Shareholder return program will be evaluated once the company reaches its holding company debt target of
and Enact initiates its regular common dividend.$1.0 billion
Financial Performance
Consolidated Net Income & |
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Adjusted Operating Income |
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Three months ended |
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Twelve months ended |
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2021 |
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2020 |
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2021 |
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2020 |
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Per |
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Per |
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Per |
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Per |
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diluted |
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diluted |
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Total |
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diluted |
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diluted |
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Total |
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(Amounts in millions, except per share) |
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Total |
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share |
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Total |
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share |
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% change |
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Total |
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share |
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Total |
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share |
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% change |
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Net income available to |
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common stockholders |
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$ |
163 |
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$ |
0.32 |
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$ |
267 |
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$ |
0.52 |
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(39)% |
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$ |
904 |
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$ |
1.76 |
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$ |
178 |
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$ |
0.35 |
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NM 4 |
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Adjusted operating income |
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$ |
164 |
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$ |
0.32 |
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$ |
188 |
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$ |
0.37 |
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(13)% |
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$ |
765 |
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$ |
1.48 |
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$ |
310 |
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$ |
0.61 |
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147 % |
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Weighted-average diluted common shares |
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515.6 |
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512.5 |
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514.7 |
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511.6 |
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As of |
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2021 |
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2020 |
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Book value per share |
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$ |
30.57 |
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$ |
30.28 |
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Book value per share, excluding |
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accumulated other comprehensive |
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income (loss) |
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$ |
22.96 |
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$ |
21.54 |
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Net investment gains, net of taxes and other adjustments, increased net income by
In
Net investment income was
Genworth’s effective tax rate on income from continuing operations for the current quarter was approximately 24 percent. The effective tax rate was increased by the tax effect of forward starting swap gains settled prior to the change in the corporate tax rate under the 2017 Tax Cuts and Jobs Act, which continue to be tax effected at 35 percent as they are amortized into net investment income.
The below table shows adjusted operating income (loss) by segment and for Corporate and Other activities:
Adjusted Operating Income (Loss) |
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(Amounts in millions) |
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Q4 21 |
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Q3 21 |
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Q4 20 |
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Enact |
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$ |
125 |
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$ |
134 |
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$ |
95 |
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41 |
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93 |
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129 |
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Runoff |
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16 |
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11 |
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13 |
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Corporate and Other |
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(18) |
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1 |
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(49) |
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Total Adjusted Operating Income |
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$ |
164 |
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$ |
239 |
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$ |
188 |
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Adjusted operating income (loss) represents income (loss) from continuing operations excluding the after-tax effects of income (loss) from continuing operations attributable to noncontrolling interests, net investment gains (losses), gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions, restructuring costs and other adjustments, net of taxes. A reconciliation of net income to adjusted operating income is included at the end of this press release.
Enact
Operating Metrics |
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(Dollar amounts in millions) |
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Q4 21 |
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Q3 21 |
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Q4 20 |
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Adjusted operating income |
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$ |
125 |
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$ |
134 |
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$ |
95 |
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Primary new insurance written |
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$ |
21,400 |
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$ |
24,000 |
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$ |
27,000 |
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Loss ratio |
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3 % |
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14 % |
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35 % |
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Enact reported adjusted operating income of
Enact’s current quarter results reflected losses of
Adjusted Operating Income (Loss) |
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(Amounts in millions) |
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Q4 21 |
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Q3 21 |
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Q4 20 |
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$ |
119 |
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$ |
133 |
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$ |
129 |
Life Insurance |
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(98) |
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(68) |
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(20) |
Fixed Annuities |
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20 |
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28 |
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20 |
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$ |
41 |
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$ |
93 |
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$ |
129 |
Long Term Care Insurance In Force Rate Action Performance |
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(Amounts in millions) |
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Q4 21 |
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Q3 21 |
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Q4 20 |
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Adjusted Operating Income from In Force Rate Actions6,7 |
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$ |
296 |
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$ |
304 |
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$ |
225 |
Long term care insurance reported adjusted operating income of
Claim terminations in the current quarter remained elevated versus pre-pandemic levels, increasing compared to the prior quarter but decreasing compared to the prior year. Beginning in the fourth quarter of 2020, the company established a temporary COVID-19 mortality adjustment, reflecting the assumption that the pandemic had accelerated its mortality experience on the most vulnerable claimants, leaving its overall claim population less likely to terminate compared to the pre-pandemic average population. In the current quarter, the company released
New claim incidence increased versus the prior year but has remained lower than pre-pandemic levels. With the historically low new claim incidence since the onset of the COVID-19 pandemic, favorable development on incurred but not reported (IBNR) claim reserves has continued, but to a lesser extent. Since the second quarter of 2020, IBNR has been strengthened to reflect the company’s assumption that incidence during the COVID-19 pandemic has been temporarily delayed. In the current quarter, IBNR claim reserves were reduced by
In the current quarter, the company completed its annual review of LTC claim reserve assumptions and methodologies and made no changes to existing claim reserves, as experience in the aggregate was in line with expectations. In the prior year, earnings included a net benefit of
In the current quarter, the company also completed its annual review of
Life Insurance
Life insurance reported an adjusted operating loss of
Mortality, attributable in part to the COVID-19 pandemic, was lower compared to both the prior quarter and the prior year. Current quarter results also included a
Fixed Annuities
Fixed annuities reported adjusted operating income of
Runoff
Runoff reported adjusted operating income of
Corporate And Other
Corporate and Other reported an adjusted operating loss of
Capital & Liquidity
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(Dollar amounts in millions) |
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Q4 21 |
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Q3 21 |
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Q4 20 |
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Enact |
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Consolidated Risk-To-Capital Ratio8 |
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12.2:1 |
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11.8:1 |
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12.1:1 |
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Genworth Mortgage Insurance Corporation Risk-To-Capital Ratio8 |
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12.3:1 |
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11.9:1 |
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12.3:1 |
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Private Mortgage Insurer Eligibility Requirements (PMIERs) Sufficiency Ratio8, 9 |
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165 |
% |
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181 |
% |
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137 |
% |
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290 |
% |
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291 |
% |
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229 |
% |
Holding Company Cash and Liquid Assets10, 11 |
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$ |
356 |
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$ |
638 |
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$ |
1,103 |
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-
Enact’s PMIERs sufficiency ratio is estimated to be 165 percent,
above published PMIERs requirements12. The PMIERs sufficiency ratio was down 16 points, or$2,003 million , sequentially, driven by the dividend paid in the current quarter, NIW and amortization of existing reinsurance transactions, partially offset by elevated lapse from prevailing low interest rates, business cash flows and lower delinquencies;$284 million -
PMIERs sufficiency benefited from a 0.30 multiplier applied to the risk based required asset factor for certain non-performing loans, which resulted in a reduction of the published PMIERs required assets by an estimated
at the end of the current quarter, compared to$390 million at the end of the prior quarter and$570 million at the end of the fourth quarter of 2020. These amounts are gross of incremental reinsurance benefits from the elimination of the 0.30 multiplier;$1,046 million -
In
January 2022 , Enact completed an excess of loss reinsurance transaction, which will provide of reinsurance coverage on a portion of current and expected new insurance written for the 2022 book year;$294 million -
U.S. life insurance companies’ statutory and cash flow testing results remain in process and will be made available with year-end statutory filings. The company estimates fourth quarter of 2021 RBC to be 290 percent, slightly down from 291 percent in the prior quarter due to the expected negative impacts of assumption updates and cash flow testing, offset by the benefit from the life block transaction completed in the fourth quarter. The company’s estimate for RBC in the fourth quarter of 2021 is significantly higher than 229 percent reported in the prior year, primarily attributable to the strong statutory earnings in the current year, driven by LTC premium increases and benefit reductions from in force rate actions, including the impacts from a legal settlement, favorable investment performance and favorable terminations. Statutory income through the third quarter of 2021 was ; and$693 million -
Genworth’s holding company ended the quarter with
of cash and liquid assets, including$356 million that is restricted. Cash sources in the quarter included a$3 million dividend from Enact and$163 million from intercompany tax arrangements. During the current quarter, the company redeemed all of its$75 million of outstanding principal due in$400 million August 2023 through a combination of open market repurchases and a make-whole tender. In addition, the company reduced itsFebruary 2024 debt obligation by through open market repurchases, leaving$118 million principal remaining. Genworth’s parent holding company public debt outstanding was approximately$282 million as of$1.2 billion December 31, 2021 .
About
From time to time,
Conference Call And Financial Supplement Information
This press release and the fourth quarter 2021 financial supplement are now posted on the company’s website. Additional information regarding business results will be posted on the company's website, http://investor.genworth.com, by
A replay of the call will be available at 888-203-1112 or 719-457-0820 (outside the
Prior to Genworth’s conference call, Enact will hold a conference call on
Use of Non-GAAP Measures
This press release includes the non-GAAP financial measures entitled "adjusted operating income (loss)" and "adjusted operating income (loss) per share." Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The chief operating decision maker evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The company defines adjusted operating income (loss) as income (loss) from continuing operations excluding the after-tax effects of income (loss) from continuing operations attributable to noncontrolling interests, net investment gains (losses), gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions, restructuring costs and infrequent or unusual non-operating items. Initial gains (losses) on insurance block transactions are defined as gains (losses) on the early extinguishment of non-recourse funding obligations, early termination fees for other financing restructuring and/or initial gains (losses) on reinsurance restructuring for certain blocks of business. The company excludes net investment gains (losses) and infrequent or unusual non-operating items because the company does not consider them to be related to the operating performance of the company's segments and Corporate and Other activities. 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. Gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions and restructuring costs are also excluded from adjusted operating income (loss) because, in the company's opinion, they are not indicative of overall operating trends. Infrequent or unusual non-operating items are also excluded from adjusted operating income (loss) if, in the company's opinion, they are not indicative of overall operating trends.
While some of these items may be significant components of net income (loss) available to
Adjustments to reconcile net income (loss) available to
In the fourth and third quarters of 2021, the company paid a pre-tax make-whole premium of
In the fourth quarter of 2021, the company recorded a pre-tax loss of
The company recorded a pre-tax expense of
The tables at the end of this press release provide a reconciliation of net income available to
This press release includes 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
Definition of Selected Operating Performance Measures
The company taxes its businesses at the
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.
The company reports 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
Management also regularly monitors and reports a loss ratio for the company's businesses. For the
Management also regularly monitors and reports adjusted operating income from in force rate actions in the long term care insurance business included in the company’s
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.
Statutory Accounting Data
The company presents certain supplemental statutory data for
This supplemental statutory data includes risk-based capital ratios for GLIC and its consolidating life insurance subsidiaries as well as statutory earnings. Management uses and provides this supplemental statutory data because it believes it provides a useful measure of among other things the adequacy of capital. Management uses this data to measure against its policy to manage the
Cautionary Note Regarding Forward-Looking Statements
This press release 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 future reductions of debt, potential dividends or share repurchases, and future strategic investments, including new products and services designed to assist individuals with navigating and financing long term care, as well as statements the company makes regarding the potential impacts of the COVID-19 pandemic. 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, business, competitive, market, regulatory and other factors and risks, including, but not limited to, the following:
• the company may be unable to successfully execute its strategic plans including: reducing the company's debt maturities and other near-term liabilities and financial obligations, reducing costs, stabilizing its
• risks relating to estimates, assumptions and valuations including: inadequate reserves and the need to increase reserves (including as a result of any changes the company may make in the future to its assumptions, methodologies or otherwise in connection with periodic or other reviews); risks related to the impact of the company’s annual review of assumptions and methodologies related to its long term care insurance claim reserves and margin reviews, including risks that additional information obtained in the future or other changes to assumptions or methodologies materially affect margins; the inability to accurately estimate the impacts of the COVID-19 pandemic, including whether borrower’s in a forbearance plan ultimately cure or result in a claim; inaccurate models; deviations from the company's estimates and actuarial assumptions or other reasons in its long term care insurance, life insurance and/or annuity businesses; accelerated amortization of deferred acquisition costs (DAC) and present value of future profits (PVFP) (including as a result of any future changes it may make to its assumptions, methodologies or otherwise in connection with periodic or other reviews); adverse impact on the company's financial results as a result of projected profits followed by projected losses (as is currently the case with its long term care insurance business); and changes in valuation of fixed maturity and equity securities;
• liquidity, financial strength ratings, credit and counterparty risks including: the impact on holding company liquidity caused by the inability to receive dividends or other returns of capital from
• risks relating to economic, market and political conditions including: downturns and volatility in global economies and equity and credit markets, including as a result of unemployment, low labor participation, inflation, supply chain disruptions, a sustained low interest rate environment and other displacements caused by the COVID-19 pandemic; interest rates and changes in rates have adversely impacted, and may continue to materially adversely impact, the company's business and profitability, including in connection with high mortgage refinancing resulting in the cancellation of private mortgage insurance consequently reducing Enact Holdings’ persistency on its insurance in-force; rising interest rates could reduce the volume of mortgage originations thereby adversely effecting
• regulatory and legal risks including: extensive regulation of the company's businesses and changes in applicable laws and regulations (including changes to tax laws and regulations); litigation and regulatory investigations or other actions; dependence on dividends and other distributions from
• operational risks including: the inability to retain, attract and motivate qualified employees or senior management; reliance on, and loss of, key customer or distribution relationships; the design and effectiveness of the company’s disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations; and failure or any compromise of the security of the company's computer systems, disaster recovery systems, business continuity plans and failures to safeguard or breaches of confidential information;
• insurance and product-related risks including: the company's inability to increase premiums and reduce benefits sufficiently, and in a timely manner, on its in force long term care insurance policies, in each case, as currently anticipated and as may be required from time to time in the future (including as a result of a delay or failure to obtain any necessary regulatory approvals, including as a result of the COVID-19 pandemic, or unwillingness or inability of policyholders to pay increased premiums and/or accept reduced benefits), including to offset any negative impact on the company's long term care insurance margins; availability, affordability and adequacy of reinsurance to protect the company against losses; decreases in the volume of mortgage originations or increases in mortgage insurance cancellations; increases in the use of alternatives to private mortgage insurance and reductions in the level of coverage selected; potential liabilities in connection with Enact Holdings’
• other risks including: the occurrence of natural or man-made disasters or a public health emergency, including pandemics, could materially adversely affect the company’s business, financial condition and results of operations.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise. This press release does not constitute an offering of any securities.
Condensed Consolidated Statements of Income |
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(Amounts in millions, except per share amounts) |
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(Unaudited) |
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Three months |
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Three months ended |
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Twelve months ended |
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ended |
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2021 |
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2020 |
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2021 |
2020 |
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2021 |
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Revenues: |
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Premiums |
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$ |
576 |
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$ |
970 |
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$ |
3,435 |
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$ |
3,836 |
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$ |
944 |
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Net investment income |
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866 |
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|
846 |
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3,370 |
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3,227 |
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859 |
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Net investment gains (losses) |
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132 |
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147 |
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|
323 |
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|
492 |
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|
88 |
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Policy fees and other income |
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162 |
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191 |
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704 |
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729 |
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179 |
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Total revenues |
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1,736 |
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2,154 |
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7,832 |
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8,284 |
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2,070 |
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Benefits and expenses: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Benefits and other changes in policy reserves |
|
|
861 |
|
|
1,157 |
|
|
4,383 |
|
|
5,214 |
|
|
1,143 |
|||
Interest credited |
|
|
127 |
|
|
132 |
|
|
508 |
|
|
549 |
|
|
123 |
|||
Acquisition and operating expenses, net of deferrals |
|
|
354 |
|
|
253 |
|
|
1,223 |
|
|
935 |
|
|
290 |
|||
Amortization of deferred acquisition costs and intangibles |
|
|
108 |
|
|
174 |
|
|
377 |
|
|
463 |
|
|
106 |
|||
Interest expense |
|
|
31 |
|
|
55 |
|
|
160 |
|
|
195 |
|
|
35 |
|||
|
|
Total benefits and expenses |
|
|
1,481 |
|
|
1,771 |
|
|
6,651 |
|
|
7,356 |
|
|
1,697 |
|
Income from continuing operations before income taxes |
|
|
255 |
|
|
383 |
|
|
1,181 |
|
|
928 |
|
|
373 |
|||
Provision for income taxes |
|
|
62 |
|
|
82 |
|
|
263 |
|
|
230 |
|
|
67 |
|||
Income from continuing operations |
|
|
193 |
|
|
301 |
|
|
918 |
|
|
698 |
|
|
306 |
|||
Income (loss) from discontinued operations, net of taxes |
|
|
(1) |
|
|
(35) |
|
|
27 |
|
|
(486) |
|
|
12 |
|||
Net income |
|
|
192 |
|
|
266 |
|
|
945 |
|
|
212 |
|
|
318 |
|||
Less: net income from continuing operations attributable to noncontrolling |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
interests |
|
|
29 |
|
|
— |
|
|
33 |
|
|
— |
|
|
4 |
||
Less: net income (loss) from discontinued operations attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
noncontrolling interests |
|
|
— |
|
|
(1) |
|
|
8 |
|
|
34 |
|
|
— |
||
Net income available to |
|
$ |
163 |
|
$ |
267 |
|
$ |
904 |
|
$ |
178 |
|
$ |
314 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net income available to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Income from continuing operations available to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common stockholders |
|
$ |
164 |
|
$ |
301 |
|
$ |
885 |
|
$ |
698 |
|
$ |
302 |
|
|
Income (loss) from discontinued operations available to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inc.'s common stockholders |
|
|
(1) |
|
|
(34) |
|
|
19 |
|
|
(520) |
|
|
12 |
|
|
Net income available to |
|
$ |
163 |
|
$ |
267 |
|
$ |
904 |
|
$ |
178 |
|
$ |
314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations available to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
common stockholders per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Basic |
|
$ |
0.32 |
|
$ |
0.60 |
|
$ |
1.75 |
|
$ |
1.38 |
|
$ |
0.59 |
|
|
|
Diluted |
|
$ |
0.32 |
|
$ |
0.59 |
|
$ |
1.72 |
|
$ |
1.36 |
|
$ |
0.59 |
|
Net income available to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Basic |
|
$ |
0.32 |
|
$ |
0.53 |
|
$ |
1.78 |
|
$ |
0.35 |
|
$ |
0.62 |
|
|
|
Diluted |
|
$ |
0.32 |
|
$ |
0.52 |
|
$ |
1.76 |
|
$ |
0.35 |
|
$ |
0.61 |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Basic |
|
|
507.4 |
|
|
505.6 |
|
|
506.9 |
|
|
505.2 |
|
|
507.4 |
|
|
|
Diluted |
|
|
515.6 |
|
|
512.5 |
|
|
514.7 |
|
|
511.6 |
|
|
514.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Adjusted Operating Income |
||||||||||||||||||
(Amounts in millions, except per share amounts) |
||||||||||||||||||
(Unaudited) |
||||||||||||||||||
|
|
|
|
|
Three |
|
Twelve |
|
Three |
|||||||||
|
|
|
|
|
months ended |
|
months ended |
|
months ended |
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
2021 |
|||||
Net income available to |
|
$ |
163 |
|
$ |
267 |
|
$ |
904 |
|
$ |
178 |
|
$ |
314 |
|||
Add: net income from continuing operations attributable to noncontrolling interests |
|
|
29 |
|
|
— |
|
|
33 |
|
|
— |
|
|
4 |
|||
Add: net income (loss) from discontinued operations attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
noncontrolling interests |
|
|
— |
|
|
(1) |
|
|
8 |
|
|
34 |
|
|
— |
||
Net income |
|
|
192 |
|
|
266 |
|
|
945 |
|
|
212 |
|
|
318 |
|||
Less: income (loss) from discontinued operations, net of taxes |
|
|
(1) |
|
|
(35) |
|
|
27 |
|
|
(486) |
|
|
12 |
|||
Income from continuing operations |
|
|
193 |
|
|
301 |
|
|
918 |
|
|
698 |
|
|
306 |
|||
Less: net income from continuing operations attributable to noncontrolling interests |
|
|
29 |
|
|
— |
|
|
33 |
|
|
— |
|
|
4 |
|||
Income from continuing operations available to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
common stockholders |
|
|
164 |
|
|
301 |
|
|
885 |
|
|
698 |
|
|
302 |
||
Adjustments to income from continuing operations available to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net investment (gains) losses, net13 |
|
|
(133) |
|
|
(144) |
|
|
(324) |
|
|
(503) |
|
|
(88) |
|||
Losses on early extinguishment of debt |
|
|
35 |
|
|
— |
|
|
45 |
|
|
9 |
|
|
6 |
|||
Initial loss from life block transaction |
|
|
92 |
|
|
— |
|
|
92 |
|
|
— |
|
|
— |
|||
Expenses related to restructuring |
|
|
5 |
|
|
1 |
|
|
34 |
|
|
3 |
|
|
3 |
|||
Taxes on adjustments |
|
|
1 |
|
|
30 |
|
|
33 |
|
|
103 |
|
|
16 |
|||
Adjusted operating income |
|
$ |
164 |
|
$ |
188 |
|
$ |
765 |
|
$ |
310 |
|
$ |
239 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Enact segment |
|
$ |
125 |
|
$ |
95 |
|
$ |
520 |
|
$ |
381 |
|
$ |
134 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
119 |
|
|
129 |
|
|
445 |
|
|
237 |
|
|
133 |
||
|
Life Insurance |
|
|
(98) |
|
|
(20) |
|
|
(269) |
|
|
(247) |
|
|
(68) |
||
|
Fixed Annuities |
|
|
20 |
|
|
20 |
|
|
91 |
|
|
78 |
|
|
28 |
||
|
|
|
|
41 |
|
|
129 |
|
|
267 |
|
|
68 |
|
|
93 |
||
Runoff segment |
|
|
16 |
|
|
13 |
|
|
54 |
|
|
43 |
|
|
11 |
|||
Corporate and Other |
|
|
(18) |
|
|
(49) |
|
|
(76) |
|
|
(182) |
|
|
1 |
|||
Adjusted operating income |
|
$ |
164 |
|
$ |
188 |
|
$ |
765 |
|
$ |
310 |
|
$ |
239 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Basic |
|
$ |
0.32 |
|
$ |
0.53 |
|
$ |
1.78 |
|
$ |
0.35 |
|
$ |
0.62 |
|
|
|
Diluted |
|
$ |
0.32 |
|
$ |
0.52 |
|
$ |
1.76 |
|
$ |
0.35 |
|
$ |
0.61 |
|
Adjusted operating income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Basic |
|
$ |
0.32 |
|
$ |
0.37 |
|
$ |
1.51 |
|
$ |
0.61 |
|
$ |
0.47 |
|
|
|
Diluted |
|
$ |
0.32 |
|
$ |
0.37 |
|
$ |
1.48 |
|
$ |
0.61 |
|
$ |
0.46 |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Basic |
|
|
507.4 |
|
|
505.6 |
|
|
506.9 |
|
|
505.2 |
|
|
507.4 |
|
|
|
Diluted |
|
|
515.6 |
|
|
512.5 |
|
|
514.7 |
|
|
511.6 |
|
|
514.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted Operating Income Previously Reported to Adjusted Operating Income |
|||||||
Re-Presented to Exclude Discontinued Operations |
|||||||
(Amounts in millions) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Twelve months ended |
||
|
|
|
|
|
|
||
|
|
|
2020 |
|
2020 |
||
Adjusted operating income as previously reported |
|
$ |
173 |
|
$ |
317 |
|
|
|
|
|
|
|
|
|
|
reported as discontinued operations |
|
|
16 |
|
|
(1) |
Adjustment for corporate overhead allocations, net of taxes14 |
|
|
(5) |
|
|
(17) |
|
Tax adjustments15 |
|
|
4 |
|
|
11 |
|
Re-presented adjusted operating income |
|
$ |
188 |
|
$ |
310 |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets |
||||||||||||
(Amounts in millions) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
2021 |
|
2020 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
||||||||
|
Cash, cash equivalents, restricted cash and invested assets |
|
$ |
74,496 |
|
$ |
77,917 |
|||||
|
Deferred acquisition costs |
|
|
1,146 |
|
|
1,487 |
|||||
|
Intangible assets |
|
|
143 |
|
|
157 |
|||||
|
Reinsurance recoverable, net |
|
|
16,813 |
|
|
16,819 |
|||||
|
Deferred tax and other assets |
|
|
507 |
|
|
469 |
|||||
|
Separate account assets |
|
|
6,066 |
|
|
6,081 |
|||||
|
Assets related to discontinued operations |
|
|
— |
|
|
2,817 |
|||||
|
|
|
|
Total assets |
|
$ |
99,171 |
|
$ |
105,747 |
||
Liabilities and equity |
|
|
|
|
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|||||
|
|
Future policy benefits |
|
$ |
41,528 |
|
$ |
42,695 |
||||
|
|
Policyholder account balances |
|
|
19,354 |
|
|
21,503 |
||||
|
|
Liability for policy and contract claims |
|
|
11,841 |
|
|
11,486 |
||||
|
|
Unearned premiums |
|
|
672 |
|
|
775 |
||||
|
|
Other liabilities |
|
|
1,511 |
|
|
1,614 |
||||
|
|
Long-term borrowings |
|
|
1,899 |
|
|
3,403 |
||||
|
|
Separate account liabilities |
|
|
6,066 |
|
|
6,081 |
||||
|
|
Liabilities related to discontinued operations |
|
|
34 |
|
|
2,370 |
||||
|
|
|
|
Total liabilities |
|
|
82,905 |
|
|
89,927 |
||
|
Equity: |
|
|
|
|
|
|
|||||
|
|
Common stock |
|
|
1 |
|
|
1 |
||||
|
|
Additional paid-in capital |
|
|
11,858 |
|
|
12,008 |
||||
|
|
Accumulated other comprehensive income (loss) |
|
|
3,861 |
|
|
4,425 |
||||
|
|
Retained earnings |
|
|
2,490 |
|
|
1,584 |
||||
|
|
|
|
|
(2,700) |
|
|
(2,700) |
||||
|
|
|
|
|
|
|
15,510 |
|
|
15,318 |
||
|
|
Noncontrolling interests |
|
|
756 |
|
|
502 |
||||
|
|
|
|
Total equity |
|
|
16,266 |
|
|
15,820 |
||
|
|
|
|
Total liabilities and equity |
|
$ |
99,171 |
|
$ |
105,747 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Reported Yield to Core Yield |
|||||||||||
|
|
|
|
|
|
||||||
|
|
|
|
|
Three |
||||||
|
|
|
|
|
months ended |
||||||
|
|
|
|
|
|
|
|
||||
(Assets - amounts in billions) |
|
2021 |
|
2021 |
|||||||
Reported Total Invested Assets and Cash |
|
$ |
73.8 |
|
|
$ |
74.7 |
|
|||
Subtract: |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) |
|
|
8.2 |
|
|
|
8.5 |
|
||
Adjusted End of Period Invested Assets and Cash |
|
$ |
65.6 |
|
|
$ |
66.2 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
Average Invested Assets and Cash Used in Reported and Core Yield Calculation |
|
$ |
65.9 |
|
|
$ |
66.2 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
(Income - amounts in millions) |
|
|
|
|
|
|
|
|
|||
Reported Net Investment Income |
|
$ |
866 |
|
|
$ |
859 |
|
|||
Subtract: |
|
|
|
|
|
|
|
|
|
|
|
|
Bond calls and commercial mortgage loan prepayments |
|
|
38 |
|
|
|
43 |
|
||
|
Other non-core items16 |
|
|
2 |
|
|
|
(4) |
|
||
Core Net Investment Income |
|
$ |
826 |
|
|
$ |
820 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
Reported Yield |
|
|
5.26 |
% |
|
|
5.19 |
% |
|||
Core Yield |
|
|
5.01 |
% |
|
|
4.95 |
% |
1 Private Mortgage Insurer Eligibility Requirements.
2 Unless otherwise stated, all references in this press release to net income (loss), net income (loss) per share, adjusted operating income (loss), adjusted operating income (loss) per share and book value per share should be read as net income (loss) available to
3 This is a financial measure that is not calculated based on
4 The company defines “NM” as not meaningful for increases or decreases greater than 200 percent.
5
6 Excludes reserve updates resulting from profits followed by losses.
7 Includes estimated premium tax, commissions, and other expenses, net of tax of
8 Company estimate for the fourth quarter of 2021 due to timing of the preparation and filing of statutory statements.
9 The PMIERs sufficiency ratio is calculated as available assets divided by required assets as defined within the published PMIERs. As of
10 Holding company cash and liquid assets comprises assets held in
11
12 The government-sponsored enterprises’ (GSEs) have imposed certain capital restrictions which remain in effect until certain conditions are met. These restrictions required
13 For the three months ended
14 Expenses previously reported in the
15 Tax impacts resulting from the classification of Genworth Australia as discontinued operations.
16 Includes cost basis adjustments on structured securities and various other immaterial items.
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