Workflow
Genworth(GNW) - 2024 Q3 - Quarterly Report
GNWGenworth(GNW)2024-11-07 22:02
Transcript

Financial Performance - Total revenues for Q3 2024 were 1,880million,anincreaseof31,880 million, an increase of 3% compared to 1,831 million in Q3 2023[178]. - Premiums decreased by 4% to 874millioninQ32024from874 million in Q3 2024 from 915 million in Q3 2023[178]. - Net investment income fell by 3% to 777millioninQ32024,downfrom777 million in Q3 2024, down from 801 million in Q3 2023[178]. - Income from continuing operations increased by 102% to 121millioninQ32024,comparedto121 million in Q3 2024, compared to 60 million in Q3 2023[178]. - Net income for Q3 2024 was 118million,a97118 million, a 97% increase from 60 million in Q3 2023[178]. - Total benefits and expenses decreased by 1% to 1,719millioninQ32024from1,719 million in Q3 2024 from 1,741 million in Q3 2023[178]. - For the nine months ended September 30, 2024, total revenues were 5,513million,adecreaseof15,513 million, a decrease of 1% from 5,577 million in the same period of 2023[179]. - Net income available to common stockholders for the nine months ended September 30, 2024, was 300million,up4300 million, up 4% from 288 million in the same period of 2023[179]. - Adjusted operating income for the three months ended September 30, 2024, was 48million,upfrom48 million, up from 42 million in the prior year, reflecting a 14% increase[185]. - The adjusted operating income for the nine months ended September 30, 2024, was 258million,downfrom258 million, down from 271 million in the prior year, indicating a decrease of 5%[185]. Capital Management - Enact Holdings provided 81millionofcapitalreturnstoGenworthHoldingsinQ32024,withexpectedtotalreturnsfor2024between81 million of capital returns to Genworth Holdings in Q3 2024, with expected total returns for 2024 between 245 million and 285million[169].−Genworthhasrepurchased285 million[169]. - Genworth has repurchased 503 million worth of its common stock since the initiation of its share repurchase program in May 2022[169]. - Genworth Financial executed 135millionofsharerepurchasesduringtheninemonthsendedSeptember30,2024[197].−GenworthHoldingsreceived135 million of share repurchases during the nine months ended September 30, 2024[197]. - Genworth Holdings received 205 million in capital returns from Enact Holdings during the nine months ended September 30, 2024, with expectations of total returns between 245millionand245 million and 285 million for the full year[293]. - Genworth Financial repurchased 21,551,602 shares at an average price of 6.26pershareforatotalof6.26 per share for a total of 135 million during the nine months ended September 30, 2024[293]. Ratings and Outlook - Moody's affirmed Genworth Holdings' senior unsecured debt rating at "Ba1" with a positive outlook as of October 9, 2024[172]. - A.M. Best upgraded Genworth Financial's credit rating to "bb-" from "b+" with a stable outlook on August 28, 2024[173]. - Genworth Life Insurance Company and Genworth Life Insurance Company of New York maintained a financial strength rating of "C++" with a stable outlook[173]. Long-Term Care Insurance - Genworth achieved an estimated cumulative economic benefit of approximately 30billionfromapprovedrateactionsinlong−termcareinsurancesince2012[170].−Thecompanyexpectscontinuedoverallgrowthinnewclaimsaspolicyholdersreachtheirpeakclaimyears,despitemixedexperienceinlong−termcareinsurance[229].−Legalsettlementscoveringapproximately7030 billion from approved rate actions in long-term care insurance since 2012[170]. - The company expects continued overall growth in new claims as policyholders reach their peak claim years, despite mixed experience in long-term care insurance[229]. - Legal settlements covering approximately 70% of the long-term care insurance block are expected to result in a net favorable economic impact, reducing tail risk on long-duration liabilities[234]. - The total liability for future policy benefits for long-term care insurance is 42.4 billion, sensitive to interest rate movements, which may cause volatility in reserve balances[231]. - Long-term care insurance premiums decreased by 40million(640 million (6%) from 621 million in Q3 2023 to 581millioninQ32024[235].−TotalrevenuesfortheLong−TermCareInsurancesegmentincreasedby581 million in Q3 2024[235]. - Total revenues for the Long-Term Care Insurance segment increased by 53 million (5%) from 1,082millioninQ32023to1,082 million in Q3 2023 to 1,135 million in Q3 2024[235]. Investment Performance - Net investment income rose by 13% to 62millioninQ32024,comparedto62 million in Q3 2024, compared to 55 million in Q3 2023, primarily due to higher investment yields[210]. - The company recorded 66millioninnetinvestmentgainsforthethreemonthsendedSeptember30,2024,comparedtoanetlossof66 million in net investment gains for the three months ended September 30, 2024, compared to a net loss of 43 million in the same period last year[281]. - Net unrealized gains on limited partnerships increased by 41millioninthecurrentyear,drivenbyfavorableprivateequitymarketperformance[282].−Thecompanyreported41 million in the current year, driven by favorable private equity market performance[282]. - The company reported 10 million in net investment gains related to derivatives, a significant improvement from 28millioninnetinvestmentlossesintheprioryear[282].InsuranceOperations−TheLong−TermCareInsurancesegmentreportedanadjustedoperatinglossof28 million in net investment losses in the prior year[282]. Insurance Operations - The Long-Term Care Insurance segment reported an adjusted operating loss of 46 million for the three months ended September 30, 2024, an improvement from a loss of 71millioninthesameperiodlastyear[185].−Enact′sprimarypersistencyratewas8371 million in the same period last year[185]. - Enact's primary persistency rate was 83%, contributing to insurance in-force growth despite a 6% decrease in new insurance written compared to the third quarter of 2023[192]. - The delinquency rate for primary insurance increased to 2.17% as of September 30, 2024, compared to 2.10% on December 31, 2023, and 1.97% on September 30, 2023[222]. - The primary insurance in-force for loans with a FICO score over 760 increased to 114,424 million in 2024 from 109,701millionin2023[221].MarketConditions−Theunemploymentrateremainedflatat4.1109,701 million in 2023[221]. Market Conditions - The unemployment rate remained flat at 4.1% in September 2024, with approximately 6.8 million unemployed Americans[202]. - The U.S. Federal Reserve decreased interest rates by 50 basis points in September 2024, with forecasts for additional decreases in Q4 2024[276]. - Credit spreads tightened during the third quarter of 2024, indicating strong overall credit market performance[276]. - The company continues to monitor changes in interest rates as part of its market risk assessment[300]. Cash Flow and Liquidity - Net cash inflows from operating activities decreased to 61 million in 2024 from 450millionin2023,primarilyduetohigherbenefitpaymentsandlowerpremiumscollectedinthelong−termcareinsurancebusiness[291].−Netcashinflowsfrominvestingactivitiesfellto450 million in 2023, primarily due to higher benefit payments and lower premiums collected in the long-term care insurance business[291]. - Net cash inflows from investing activities fell to 641 million in 2024 compared to 913millionin2023,mainlyduetolowernetsalesandmaturitiesoffixedmaturitysecurities[291].−Netcashoutflowsfromfinancingactivitiesimprovedto913 million in 2023, mainly due to lower net sales and maturities of fixed maturity securities[291]. - Net cash outflows from financing activities improved to (860) million in 2024 from (1,170)millionin2023,drivenbylowernetwithdrawalsfrominvestmentcontracts[291].−AsofSeptember30,2024,GenworthHoldingshad(1,170) million in 2023, driven by lower net withdrawals from investment contracts[291]. - As of September 30, 2024, Genworth Holdings had 369 million in unrestricted cash and cash equivalents, an increase from $350 million at the end of 2023[294].