Genworth Financial Announces Third Quarter 2021 Results - 02.11.21 - News

RICHMOND, Va., Nov. 2, 2021

Successfully completed initial public offering (IPO) of Enact Holdings, Inc. (Enact)
Enact adjusted operating income of $134 million, with 10 percent annual growth in primary insurance in force and a 14 percent loss ratio
Enact's PMIERs¹ sufficiency ratio estimated at 181 percent, $2,287 million above published requirements
U.S. life insurance segment adjusted operating income of $93 million driven by long term care insurance (LTC) results benefitting from in force rate actions and net investment income
Holding company cash and liquid assets of $638 million and $809 million of holding company debt retired

Genworth Financial, Inc. (NYSE: GNW) today reported results for the quarter ended September 30, 2021. The company reported net income² of $314 million, or $0.61 per diluted share, in the third quarter of 2021, compared with net income of $418 million, or $0.82 per diluted share, in the third quarter of 2020. The company reported adjusted operating income³ of $239 million, or $0.46 per diluted share, in the third quarter of 2021, compared with adjusted operating income of $125 million, or $0.25 per diluted share, in the third quarter of 2020.

"Genworth delivered another quarter of strong results," said Tom McInerney, Genworth President and CEO. "At the same time, we continued to execute against our strategic plan, including the successful completion of the Enact IPO which improved Genworth's financial position and drove ratings improvements at both Enact and Genworth. With this critical step behind us, we have a clearer path to reduce holding company debt to a more sustainable level, which in turn will enable Genworth to pursue other strategic priorities that are aimed at creating both near-term and long-term shareholder value."

Strategic Highlights

Completed IPO of Enact with net proceeds of $529 million to Genworth, reducing ownership of Enact from 100 percent to 81.6 percent
Received ratings upgrades from Moody's Investors Service and S&P Global Ratings following the IPO, in recognition of improvement in Genworth Holdings, Inc.'s credit risk profile and increased financial flexibility
Significantly reduced holding company debt, including the retirement of the AXA S.A. (AXA) promissory note ($296 million) and AXA's corresponding release of the 19.9% of Enact common stock pledged as collateral for the note, as well as the redemption of the remaining principal amount of the September 2021 debt maturity ($513 million)
Continued progress against LTC multi-year rate action plan, with $117 million in annual premium rate increases and benefit reductions approved in the third quarter of 2021, bringing total net present value from LTC rate actions to over $16.3 billion since 2012

Financial Performance

Consolidated Net Income & Adjusted Operating Income

Three months ended September 30

ARIVA.DE Börsen-Geflüster

Kurse

Genworth Financial

6,10 $

+1,84%

2021

2020

Per

diluted

Total

(Amounts in millions, except per share)

Total

share

Total

share

% change

Net income available to Genworth's common stockholders

$

314

$

0.61

$

418

$

0.82

(25)%

Adjusted operating income

$

239

$

0.46

$

125

$

0.25

91 %

Weighted-average diluted shares

514.2

511.5

As of September 30

2021

2020

Book value per share

$

30.11

$

29.19

Book value per share, excluding accumulated other comprehensive

income (loss)

$

22.62

$

20.99

On September 16, 2021, the company completed the minority IPO of 18.4 percent of its U.S. mortgage insurance business, Enact, and as a result, net income attributable to noncontrolling interests in the Enact segment was $4 million in the current quarter. The company's net income, before noncontrolling interests in the Enact segment, was $318 million in the third quarter of 2021. The company's adjusted operating income, before noncontrolling interests in the Enact segment, for the third quarter of 2021 was $243 million.

Net investment gains, net of taxes and other adjustments, increased net income by $70 million in the current quarter. The investment gains were primarily driven by mark-to-market gains on limited partnership investments held in the LTC business. Net income in the third quarter of 2020 included $277 million of investment gains, net of taxes and other adjustments.

Net investment income was $859 million in the quarter, compared to $844 million in the prior quarter and $820 million in the prior year. Net investment income was higher than the prior quarter and prior year as a result of higher variable investment income, including income from limited partnerships, bond calls, commercial mortgage loan prepayments and the inflation impact on Treasury Inflation-Protected Securities (TIPS), primarily in the LTC business. The reported yield and the core yield³ for the quarter were 5.19 percent and 4.95 percent, respectively, compared to 5.11 percent and 4.85 percent, respectively, in the prior quarter.

Genworth's effective tax rate on income from continuing operations for the current quarter was approximately 18 percent. The effective tax rate was favorably impacted by higher tax benefits from a reduction in uncertain tax positions due to the expiration of certain statute of limitations, partially offset 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)
(Amounts in millions)	Q3 21		Q2 21		Q3 20
Enact	$	134	$	135	$	141
U.S. Life Insurance		93		71		14
Runoff		11		15		19
Corporate and Other		1		(27)		(49)
Total Adjusted Operating Income	$	239	$	194	$	125

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, 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

(Dollar amounts in millions)

Mehr Nachrichten zur Genworth Financial Aktie kostenlos abonnieren

E-Mail-Adresse

Benachrichtigungen von ARIVA.DE
(Mit der Bestellung akzeptierst du die Datenschutzhinweise)

Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte.