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Business Wire 1-May-2024 4:15 PM
Strategic Highlights
Financial Highlights
Genworth Financial, Inc. (NYSE:GNW) today reported results for the quarter ended March 31, 2024.
"I'm pleased with Genworth's solid performance to start the year," said Tom McInerney, President & CEO. "Enact recorded yet another strong quarter, evidenced by continued growth in equity and today's return of capital announcements. We further strengthened the financial stability of our LTC legacy block and returned $63 million to shareholders through share repurchases. We remain focused on executing our strategy and laying the foundation for long-term growth through CareScout. The recently launched CareScout Quality Network will drive better care outcomes for our LTC policyholders who select in-network providers, allowing them to extend their benefits while driving significant claims savings for Genworth."
Consolidated Metrics |
|
|
Q1 2024 |
|
Q4 2023 |
|
Q1 2023 |
|
|||
(Amounts in millions, except per share data) |
|
|
|
|
|
||||||
Net income (loss)2 |
|
|
$ |
139 |
|
$ |
(212) |
|
$ |
122 |
|
Earnings (loss) per diluted share2 |
|
|
$ |
0.31 |
|
$ |
(0.47) |
|
$ |
0.24 |
|
Adjusted operating income (loss)2,3 |
|
|
$ |
85 |
|
$ |
(230) |
|
$ |
144 |
|
Adjusted operating income (loss) per diluted share2,3 |
|
|
$ |
0.19 |
|
$ |
(0.51) |
|
$ |
0.29 |
|
Weighted-average diluted shares6 |
|
|
|
450.3 |
|
|
449.4 |
|
|
500.1 |
|
Consolidated GAAP Financial Highlights
Enact |
|||||||||||
GAAP Operating Metrics |
|
|
Q1 2024 |
|
Q4 2023 |
|
Q1 2023 |
|
|||
(Dollar amounts in millions) |
|
|
|
|
|
||||||
Adjusted operating income2 |
|
|
$ |
135 |
|
$ |
129 |
|
$ |
143 |
|
Primary new insurance written |
|
|
$ |
10,526 |
|
$ |
10,453 |
|
$ |
13,154 |
|
Loss ratio |
|
|
|
8% |
|
|
10% |
|
|
(5)% |
|
Equity7 |
|
|
$ |
3,846 |
|
$ |
3,785 |
|
$ |
3,514 |
|
Capital Metric |
|
|
Q1 2024 |
|
Q4 2023 |
|
Q1 2023 |
|
||||||
|
|
|
|
|
|
|||||||||
PMIERs Sufficiency Ratio5,8 |
|
|
|
163 |
% |
|
|
161 |
% |
|
|
164 |
% |
|
Long-Term Care Insurance |
|||||||||||
GAAP Operating Metrics |
|
|
Q1 2024 |
Q4 2023 |
Q1 2023 |
||||||
(Amounts in millions) |
|
|
|||||||||
Adjusted operating income (loss) |
|
|
$ |
3 |
|
$ |
(151) |
|
$ |
23 |
|
Premiums |
|
|
$ |
578 |
|
$ |
615 |
|
$ |
616 |
|
Net investment income |
|
|
$ |
464 |
|
$ |
489 |
|
$ |
473 |
|
Liability remeasurement gains (losses) |
|
|
$ |
16 |
|
$ |
(188) |
|
$ |
32 |
|
Cash flow assumption updates |
|
|
|
2 |
|
|
(61) |
|
|
(21) |
|
Actual to expected experience |
|
|
|
14 |
|
|
(127) |
|
|
53 |
|
Life and Annuities |
|||||||||||
GAAP Adjusted Operating Income (Loss) |
|
|
Q1 2024 |
|
Q4 2023 |
|
Q1 2023 |
|
|||
(Amounts in millions) |
|
|
|
|
|
||||||
Life Insurance |
|
|
$ |
(33) |
|
$ |
(206) |
|
$ |
(27) |
|
Fixed Annuities |
|
|
|
11 |
|
|
9 |
|
|
14 |
|
Variable Annuities |
|
|
|
7 |
|
|
14 |
|
|
9 |
|
Total Life and Annuities |
|
|
$ |
(15) |
|
$ |
(183) |
|
$ |
(4) |
|
Life Insurance
Annuities
U.S. Life Insurance Companies9 Statutory Results and RBC |
|||||||||||
(Dollar amounts in millions) |
|
|
Q1 2024 |
|
Q4 2023 |
|
Q1 2023 |
|
|||
|
|
|
|
|
|
||||||
Statutory Pre-Tax Income (Loss)5,10 |
|
|
$ |
258 |
|
$ |
148 |
|
$ |
192 |
|
Long-Term Care Insurance |
|
|
|
151 |
|
|
(9) |
|
|
138 |
|
Life Insurance |
|
|
|
(18) |
|
|
82 |
|
|
(23) |
|
Fixed Annuities |
|
|
|
17 |
|
|
16 |
|
|
25 |
|
Variable Annuities |
|
|
|
108 |
|
|
59 |
|
|
52 |
|
GLIC Consolidated RBC Ratio5 |
|
|
|
314% |
|
|
303% |
|
|
295% |
|
Corporate and Other
Holding Company Cash and Liquid Assets |
|||||||||||
|
|
|
|
|
|
||||||
(Amounts in millions) |
|
|
Q1 2024 |
|
Q4 2023 |
|
Q1 2023 |
|
|||
|
|
|
|
|
|
||||||
Holding Company Cash and Liquid Assets11,12 |
|
|
$ |
253 |
|
$ |
350 |
|
$ |
233 |
|
Returns to Shareholders
About Genworth Financial
Genworth Financial, Inc. (NYSE:GNW) is a Fortune 500 company focused on empowering families to navigate the aging journey with confidence, now and in the future. Headquartered in Richmond, Virginia, Genworth provides guidance, products, and services that help people understand their caregiving options and fund their long-term care needs. Genworth is also the parent company of publicly traded Enact Holdings, Inc. (NASDAQ:ACT), a leading U.S. mortgage insurance provider. For more information on Genworth, visit genworth.com, and for more information on Enact Holdings, Inc. visit enactmi.com.
Conference Call Information
Investors are encouraged to read this press release, summary presentation and financial supplement which are now posted on the company's website, http://investor.genworth.com.
Genworth will conduct a conference call on May 2, 2024 at 9:00 a.m. (ET) to discuss its first quarter results, which will be accessible via:
Allow at least 15 minutes prior to the call time to register for the call. A replay of the webcast will be available on the company's website for one year.
Prior to Genworth's conference call, Enact will hold a conference call on May 2, 2024 at 8:00 a.m. (ET) to discuss its first quarter results, which will be accessible via:
Allow at least 15 minutes prior to the call time to register for the call.
Use of Non-GAAP Measures
Management uses non-GAAP financial measures entitled "adjusted operating income (loss)" and "adjusted operating income (loss) per share" to evaluate performance and allocate resources. Adjusted operating income (loss) per share is derived from 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) 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) determined in accordance with 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) or net income (loss) per share on a basic and diluted basis determined in accordance with 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) to adjusted operating income (loss) assume a 21 percent 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.
The tables at the end of this press release provide a reconciliation of net income (loss) available to Genworth Financial, Inc.'s common stockholders to adjusted operating income (loss) for the three months ended March 31, 2024 and 2023, as well as the three months ended December 31, 2023 and reflect adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting.
Statutory Accounting Data
The company presents certain supplemental statutory data for 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 GAAP, the values for assets, liabilities and equity, and the recognition of income and expenses, reflected in financial statements prepared in accordance with 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, GAAP.
This supplemental statutory data includes the company action level RBC ratio for GLIC and its consolidating life insurance subsidiaries as well as combined statutory pre-tax earnings from the principal U.S. life insurance companies, GLIC, GLAIC and GLICNY. 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). The combined product level statutory pre-tax earnings are grouped on a consistent basis as those provided on page six of the statutory Annual Statements. 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.
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 potential dividends or share repurchases; future return of capital by Enact Holdings, Inc. (Enact Holdings), including share repurchases, and quarterly and special dividends; the cumulative economic benefit of approved and future rate actions contemplated in the company's long-term care insurance multi-year in-force rate action plan; future financial performance, including the expectation that adverse quarterly variances between actual and expected experience could persist resulting in future remeasurement losses in the company's long-term care insurance business; future financial condition of the company's businesses; liquidity and new lines of business or new products and services, such as those the company is pursuing with its CareScout business (CareScout); as well as statements the company makes regarding the potential occurrence of a recession.
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, the following:
The company provides additional information regarding these risks and uncertainties in its Annual Report on Form 10-K. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Accordingly, for the foregoing reasons, 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.
Condensed Consolidated Statements of Income |
||||||||||||
(Amounts in millions, except per share amounts) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
Three months |
||||
|
|
Three months ended |
|
ended |
||||||||
|
|
March 31, |
|
December 31, |
||||||||
|
|
2024 |
|
2023 |
|
2023 |
||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|||
Premiums |
|
$ |
875 |
|
|
$ |
915 |
|
|
$ |
904 |
|
Net investment income |
|
|
782 |
|
|
|
787 |
|
|
|
810 |
|
Net investment gains (losses) |
|
|
49 |
|
|
|
(11 |
) |
|
|
38 |
|
Policy fees and other income |
|
|
158 |
|
|
|
163 |
|
|
|
159 |
|
Total revenues |
|
|
1,864 |
|
|
|
1,854 |
|
|
|
1,911 |
|
Benefits and expenses: |
|
|
|
|
|
|
|
|
|
|||
Benefits and other changes in policy reserves |
|
|
1,203 |
|
|
|
1,176 |
|
|
|
1,233 |
|
Liability remeasurement (gains) losses |
|
|
(8 |
) |
|
|
(15 |
) |
|
|
416 |
|
Changes in fair value of market risk benefits and associated hedges |
|
|
(23 |
) |
|
|
17 |
|
|
|
14 |
|
Interest credited |
|
|
125 |
|
|
|
126 |
|
|
|
124 |
|
Acquisition and operating expenses, net of deferrals |
|
|
236 |
|
|
|
240 |
|
|
|
248 |
|
Amortization of deferred acquisition costs and intangibles |
|
|
65 |
|
|
|
72 |
|
|
|
63 |
|
Interest expense |
|
|
30 |
|
|
|
29 |
|
|
|
30 |
|
Total benefits and expenses |
|
|
1,628 |
|
|
|
1,645 |
|
|
|
2,128 |
|
Income (loss) from continuing operations before income taxes |
|
|
236 |
|
|
|
209 |
|
|
|
(217 |
) |
Provision (benefit) for income taxes |
|
|
66 |
|
|
|
55 |
|
|
|
(36 |
) |
Income (loss) from continuing operations |
|
|
170 |
|
|
|
154 |
|
|
|
(181 |
) |
Loss from discontinued operations, net of taxes |
|
|
(1 |
) |
|
|
— |
|
|
|
(2 |
) |
Net income (loss) |
|
|
169 |
|
|
|
154 |
|
|
|
(183 |
) |
Less: net income attributable to noncontrolling interests |
|
|
30 |
|
|
|
32 |
|
|
|
29 |
|
Net income (loss) available to Genworth Financial, Inc.'s common stockholders |
|
$ |
139 |
|
|
$ |
122 |
|
|
$ |
(212 |
) |
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Income (loss) from continuing operations available to Genworth Financial, Inc.'s |
|
|
|
|
|
|
|
|
|
|||
common stockholders per share: |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
$ |
0.32 |
|
|
$ |
0.25 |
|
|
$ |
(0.47 |
) |
Diluted |
|
$ |
0.31 |
|
|
$ |
0.24 |
|
|
$ |
(0.47 |
) |
Net income (loss) available to Genworth Financial, Inc.'s common stockholders |
|
|
|
|
|
|
|
|
|
|||
per share: |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
$ |
0.31 |
|
|
$ |
0.25 |
|
|
$ |
(0.47 |
) |
Diluted |
|
$ |
0.31 |
|
|
$ |
0.24 |
|
|
$ |
(0.47 |
) |
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
|
443.0 |
|
|
|
492.3 |
|
|
|
449.4 |
|
Diluted6 |
|
|
450.3 |
|
|
|
500.1 |
|
|
|
449.4 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss) |
||||||||||||
(Amounts in millions, except per share amounts) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
||||||||
|
|
Three |
|
Three |
||||||||
|
|
months ended |
|
months ended |
||||||||
|
|
March 31, |
|
December 31, |
||||||||
|
|
2024 |
|
2023 |
|
2023 |
||||||
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss) available to Genworth Financial, Inc.'s common stockholders |
|
$ |
139 |
|
|
$ |
122 |
|
|
$ |
(212 |
) |
Add: net income attributable to noncontrolling interests |
|
|
30 |
|
|
|
32 |
|
|
|
29 |
|
Net income (loss) |
|
|
169 |
|
|
|
154 |
|
|
|
(183 |
) |
Less: loss from discontinued operations, net of taxes |
|
|
(1 |
) |
|
|
— |
|
|
|
(2 |
) |
Income (loss) from continuing operations |
|
|
170 |
|
|
|
154 |
|
|
|
(181 |
) |
Less: net income from continuing operations attributable to noncontrolling interests |
|
|
30 |
|
|
|
32 |
|
|
|
29 |
|
Income (loss) from continuing operations available to Genworth Financial, Inc.'s common stockholders |
|
|
140 |
|
|
|
122 |
|
|
|
(210 |
) |
Adjustments to income (loss) from continuing operations available to Genworth Financial, Inc.'s common stockholders: |
|
|
|
|
|
|
|
|
|
|||
Net investment (gains) losses, net13 |
|
|
(50 |
) |
|
|
11 |
|
|
|
(38 |
) |
Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges14 |
|
|
(26 |
) |
|
|
14 |
|
|
|
13 |
|
(Gains) losses on early extinguishment of debt |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
Expenses related to restructuring |
|
|
7 |
|
|
|
3 |
|
|
|
— |
|
Taxes on adjustments |
|
|
15 |
|
|
|
(5 |
) |
|
|
6 |
|
Adjusted operating income (loss) |
|
$ |
85 |
|
|
$ |
144 |
|
|
$ |
(230 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Adjusted operating income (loss): |
|
|
|
|
|
|
|
|
|
|||
Enact segment |
|
$ |
135 |
|
|
$ |
143 |
|
|
$ |
129 |
|
Long-Term Care Insurance segment |
|
|
3 |
|
|
|
23 |
|
|
|
(151 |
) |
Life and Annuities segment: |
|
|
|
|
|
|
|
|
|
|||
Life Insurance |
|
|
(33 |
) |
|
|
(27 |
) |
|
|
(206 |
) |
Fixed Annuities |
|
|
11 |
|
|
|
14 |
|
|
|
9 |
|
Variable Annuities |
|
|
7 |
|
|
|
9 |
|
|
|
14 |
|
Total Life and Annuities segment |
|
|
(15 |
) |
|
|
(4 |
) |
|
|
(183 |
) |
Corporate and Other |
|
|
(38 |
) |
|
|
(18 |
) |
|
|
(25 |
) |
Adjusted operating income (loss) |
|
$ |
85 |
|
|
$ |
144 |
|
|
$ |
(230 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss) available to Genworth Financial, Inc.'s common stockholders per share: |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
$ |
0.31 |
|
|
$ |
0.25 |
|
|
$ |
(0.47 |
) |
Diluted |
|
$ |
0.31 |
|
|
$ |
0.24 |
|
|
$ |
(0.47 |
) |
Adjusted operating income (loss) per share: |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
$ |
0.19 |
|
|
$ |
0.29 |
|
|
$ |
(0.51 |
) |
Diluted |
|
$ |
0.19 |
|
|
$ |
0.29 |
|
|
$ |
(0.51 |
) |
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
|
443.0 |
|
|
|
492.3 |
|
|
|
449.4 |
|
Diluted6 |
|
|
450.3 |
|
|
|
500.1 |
|
|
|
449.4 |
|
|
|
|
|
|
|
|
|
|
|
Footnote Definitions |
________________________ |
1 Long-term care insurance. |
2 All references reflect amounts available to Genworth's common stockholders. |
3 This is a financial measure that is not calculated based on U.S. Generally Accepted Accounting Principles (GAAP). See the Use of Non-GAAP Measures section of this press release for additional information. |
4 Risk-based capital ratio based on company action level for GLIC consolidated. |
5 Company estimate for the first quarter of 2024 due to timing of the preparation of the filing(s). |
6 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 company's loss from continuing operations available to Genworth Financial, Inc.'s common stockholders 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 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 available to Genworth Financial, Inc.'s common stockholders for the three months ended December 31, 2023, dilutive potential weighted-average common shares outstanding would have been 455.7 million. |
7 Reflects Genworth's ownership of equity including accumulated other comprehensive income and excluding noncontrolling interests of $873 million, $855 million and $793 million in the first quarter of 2024 and the fourth and first quarters of 2023, respectively. |
8 The Private Mortgage Insurer Eligibility Requirements (PMIERs) sufficiency ratio is calculated as available assets divided by required assets as defined within PMIERs. |
9 Genworth's principal U.S. life insurance companies: GLIC, GLAIC and GLICNY. |
10 Net gain from operations before dividends to policyholders, refunds to members and federal income taxes for Genworth Life Insurance Company (GLIC), Genworth Life and Annuity Insurance Company (GLAIC) and Genworth Life Insurance Company of New York (GLICNY), and before realized capital gains or (losses). |
11 Holding company cash and liquid assets comprises assets held in Genworth Holdings, Inc. (the issuer of outstanding public debt) which is a wholly-owned subsidiary of Genworth Financial, Inc. |
12 Genworth Holdings, Inc. held no short-term investments or U.S. government securities as of March 31, 2024, December 31, 2023 and March 31, 2023. |
13 Net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests of $1 million for the three months ended March 31, 2024. |
14 Changes in fair value of market risk benefits and associated hedges were adjusted to exclude changes in reserves, attributed fees and benefit payments of $(3) million for both the three months ended March 31, 2024 and 2023 and $(1) million for the three months ended December 31, 2023. |
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