Genworth(GNW) - 2025 Q2 - Quarterly Results

Investor Letter Provides an introductory note to investors, directing them to the company's website for Q2 2025 earnings and call details Investor Letter Content Directs investors to the company's website for Q2 2025 earnings results and provides details for the upcoming earnings call - Investors are directed to the company's website (https://investor.genworth.com) for additional information regarding Q2 2025 earnings results, including the accompanying press release and summary presentation[8] - Details for the Q2 2025 earnings call are provided, scheduled for July 31, 2025, at 9:00 a.m. (ET), accessible via telephone (888-208-1820 or 323-794-2110, conference ID 8808137) and webcast (http://investor.genworth.com)[9](index=9&type=chunk) Use of Non-GAAP Measures Explains the company's use of non-GAAP financial measures, specifically adjusted operating income (loss) and statutory accounting data Adjusted Operating Income (Loss) Definition Defines 'adjusted operating income (loss)' as a key non-GAAP measure used by management to assess performance and allocate resources, excluding specific non-operating items - Management uses 'adjusted operating income (loss)' as a key non-GAAP measure to evaluate performance and allocate resources, believing it more accurately reflects overall operating performance by minimizing macroeconomic volatility[11] - Adjusted operating income (loss) is defined as income (loss) from continuing operations, excluding after-tax effects of noncontrolling interests, net investment gains (losses), changes in fair value of market risk benefits, gains (losses) on business sales, gains (losses) on early extinguishment of debt, restructuring costs, and infrequent/unusual non-operating items[12] - The company's legacy U.S. life insurance subsidiaries (Long-Term Care Insurance and Life and Annuities segments) are managed on a standalone basis, with no capital allocated to them[11] Statutory Accounting Data Presents supplemental statutory accounting data for GLIC and its subsidiaries, prepared using SAP, to measure statutory pre-tax earnings and capital adequacy - Supplemental statutory data for Genworth Life Insurance Company (GLIC) and its subsidiaries is presented, prepared using Statutory Accounting Principles (SAP)[16] - This statutory data includes the impact from in-force rate actions on pre-tax long-term care insurance statutory earnings, which management uses to assess statutory pre-tax earnings and capital adequacy[17] - SAP financial statements differ materially from U.S. GAAP due to methodological differences, and this supplemental data should not be viewed as an alternative to U.S. GAAP[16] Results of Operations and Selected Operating Performance Measures Details the company's operational results and key performance metrics, including tax allocation methods and segment-specific measures Tax Allocation and Reporting Outlines the company's tax allocation methodology, applying a 21% U.S. corporate federal income tax rate with segment-specific adjustments and varying effective tax rate applications - Tax is allocated to businesses at a 21% U.S. corporate federal income tax rate, with adjustments for each segment's unique tax attributes[20] - For the three months ended June 30, 2025, March 31, 2025, September 30, 2024, and June 30, 2024, the actual effective tax rate was used for Long-Term Care Insurance and Life and Annuities segments[21] - For the same periods, an annualized projected effective tax rate was used for the Enact segment and Corporate and Other[21] Operating Performance Measures for Enact Segment Monitors the Enact segment's operating performance using key metrics like new insurance written, insurance in-force, risk in-force, and loss ratio to assess business volume and underwriting - Key operating performance measures for the Enact segment include 'new insurance written' (NIW), 'insurance in-force', 'risk in-force', and 'loss ratio'[22] - NIW measures the volume of new mortgage insurance policies sold, while insurance in-force and risk in-force indicate the size of the business that will generate future revenues and profits[23][24] - The loss ratio, calculated as benefits and other changes in policy reserves to net earned premiums, is used to measure underwriting performance[25] Financial Highlights Presents key financial data including balance sheet metrics, return on equity trends, and shares outstanding Balance Sheet Data Highlights Genworth Financial, Inc.'s stockholders' equity, excluding AOCI, remaining stable around $10.1 billion, with total equity increasing to $8,788 million by June 2025 Selected Balance Sheet Data (Amounts in millions, except per share data) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :---------------------------------------------------------------- | :------------ | :------------- | :------------------ | :------------------- | :------------ | | Total Genworth Financial, Inc.'s stockholders' equity, excluding AOCI | $10,160 | $10,131 | $10,136 | $10,182 | $10,146 | | Total accumulated other comprehensive income (loss) | $(1,372) | $(1,421) | $(1,642) | $(1,871) | $(1,687) | | Total Genworth Financial, Inc.'s stockholders' equity | $8,788 | $8,710 | $8,494 | $8,311 | $8,459 | | Book value per share | $21.35 | $20.94 | $20.16 | $19.40 | $19.49 | | Book value per share, excluding AOCI | $24.68 | $24.36 | $24.05 | $23.77 | $23.38 | | Common shares outstanding | 411.7 | 415.9 | 421.4 | 428.4 | 434.0 | - Total accumulated other comprehensive income (loss) improved from $(1,687) million as of June 30, 2024, to $(1,372) million as of June 30, 2025, primarily due to changes in the discount rate for future policy benefits[29] Return on Equity (ROE) Details fluctuations in U.S. GAAP Basis ROE and Operating ROE, with Q2 2025 Operating ROE at 2.7%, up from Q1 2025 Return on Equity (ROE) Trends | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------- | :------------ | :------------- | :------------------ | :------------------- | :------------ | | Twelve Month Rolling Average ROE | | | | | | | U.S. GAAP Basis ROE | 1.9% | 2.1% | 3.0% | 0.9% | 0.3% | | Operating ROE | 1.8% | 2.4% | 2.7% | 0.3% | 0.2% | | Quarterly Average ROE | | | | | | | U.S. GAAP Basis ROE | 2.0% | 2.1% | —% | 3.3% | 3.0% | | Operating ROE | 2.7% | 1.5% | 0.6% | 1.9% | 4.9% | Shares Outstanding Reports weighted-average common shares for basic EPS at 413.2 million for Q2 2025, with diluted shares slightly higher due to dilutive securities Weighted-Average Common Shares Outstanding (Millions) | Metric | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :-------------------------------------------------- | :------------------------------- | :----------------------------- | | Weighted-average common shares used in basic EPS | 413.2 | 415.7 | | Potentially dilutive securities | 4.3 | 4.5 | | Weighted-average common shares used in diluted EPS | 417.5 | 420.2 | Consolidated Quarterly Results Provides a consolidated overview of quarterly financial performance, including net income, balance sheets, and segment-specific breakdowns Consolidated Net Income (Loss) by Quarter Reports Genworth Financial, Inc.'s Q2 2025 net income at $83 million, a slight decrease from Q1 2025 but an improvement year-over-year Consolidated Net Income (Loss) by Quarter (Amounts in millions, except per share amounts) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Premiums | $865 | $862 | $1,727 | $876 | $874 | $855 | $875 | $3,480 | | Net investment income | $802 | $739 | $1,541 | $793 | $777 | $808 | $782 | $3,160 | | Total revenues | $1,796 | $1,786 | $3,582 | $1,782 | $1,880 | $1,769 | $1,864 | $7,295 | | Total benefits and expenses | $1,671 | $1,660 | $3,331 | $1,727 | $1,719 | $1,626 | $1,628 | $6,700 | | Income from continuing operations before income taxes | $125 | $126 | $251 | $55 | $161 | $143 | $236 | $595 | | Net income | $83 | $85 | $168 | $30 | $118 | $110 | $169 | $427 | | Net income (loss) available to common stockholders | $51 | $54 | $105 | $(1) | $85 | $76 | $139 | $299 | | Basic EPS (Net income available to common stockholders) | $0.12 | $0.13 | $0.25 | $0.00 | $0.20 | $0.17 | $0.31 | $0.69 | - Net investment gains (losses) shifted from a gain of $27 million in Q1 2025 to a loss of $(28) million in Q2 2025[33] - Loss from discontinued operations, net of taxes, was $(7) million in Q2 2025, primarily related to legal costs from litigation involving the former lifestyle protection insurance business[33] Reconciliation of Net Income (Loss) to Adjusted Operating Income Details the reconciliation of net income to adjusted operating income, which increased to $68 million in Q2 2025 from $51 million in Q1 2025 Reconciliation of Net Income (Loss) to Adjusted Operating Income (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :------------------------------------------------------------------------------------------------ | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Net income (loss) available to Genworth Financial, Inc.'s common stockholders | $51 | $54 | $105 | $(1) | $85 | $76 | $139 | $299 | | Income from continuing operations available to Genworth Financial, Inc.'s common stockholders | $58 | $59 | $117 | $4 | $88 | $77 | $140 | $309 | | Net investment (gains) losses, net (adjustment) | $27 | $(28) | $(1) | $39 | $(66) | $60 | $(50) | $(17) | | Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges (adjustment) | $(15) | $19 | $4 | $(24) | $17 | $(10) | $(26) | $(43) | | Adjusted operating income | $68 | $51 | $119 | $15 | $48 | $125 | $85 | $273 | | Adjusted operating income per share (Basic) | $0.16 | $0.12 | $0.29 | $0.04 | $0.11 | $0.29 | $0.19 | $0.63 | Adjusted Operating Income (Loss) by Segment (Amounts in millions) | Segment | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :-------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Enact segment | $141 | $137 | $278 | $137 | $148 | $165 | $135 | $585 | | Long-Term Care Insurance | $(37) | $(30) | $(67) | $(104) | $(46) | $(29) | $3 | $(176) | | Life and Annuities segment | $(7) | $(33) | $(40) | $5 | $(27) | $(1) | $(15) | $(38) | | Corporate and Other | $(29) | $(23) | $(52) | $(23) | $(27) | $(10) | $(38) | $(98) | Consolidated Balance Sheets Reports total assets of $87,336 million and total liabilities of $77,557 million as of June 30, 2025, with stockholders' equity increasing to $8,788 million Consolidated Balance Sheet Highlights (Amounts in millions) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :---------------------------------------------------- | :------------ | :------------- | :------------------ | :------------------- | :------------ | | ASSETS | | | | | | | Total investments | $58,868 | $58,694 | $57,928 | $60,520 | $58,359 | | Reinsurance recoverable, net | $17,639 | $17,719 | $17,655 | $18,599 | $17,713 | | Total assets | $87,336 | $87,256 | $86,871 | $90,760 | $87,543 | | LIABILITIES AND EQUITY | | | | | | | Future policy benefits | $54,111 | $54,158 | $53,610 | $57,303 | $53,774 | | Policyholder account balances | $14,163 | $14,447 | $14,594 | $14,864 | $15,047 | | Total liabilities | $77,557 | $77,575 | $77,440 | $81,505 | $78,190 | | Total Genworth Financial, Inc.'s stockholders' equity | $8,788 | $8,710 | $8,494 | $8,311 | $8,459 | | Noncontrolling interests | $991 | $971 | $937 | $944 | $894 | | Total equity | $9,779 | $9,681 | $9,431 | $9,255 | $9,353 | - Fixed maturity securities available-for-sale, at fair value, remained stable at approximately $45.6 billion in Q2 2025 and Q1 2025[39] - Accumulated other comprehensive income (loss) improved from $(1,687) million in Q2 2024 to $(1,372) million in Q2 2025, primarily due to a positive change in the discount rate used to measure future policy benefits[42] Consolidated Balance Sheets by Segment Presents the consolidated balance sheet by segment, showing Long-Term Care Insurance with the largest assets and liabilities, and Enact with the highest allocated equity, excluding AOCI Consolidated Balance Sheet by Segment (June 30, 2025, Amounts in millions) | Metric | Enact | Long-Term Care Insurance | Life and Annuities | Corporate and Other | Total | | :---------------------------------------------------- | :---- | :----------------------- | :----------------- | :------------------ | :---- | | ASSETS | | | | | | | Cash and investments | $6,589 | $36,013 | $17,281 | $1,338 | $61,221 | | Total assets | $6,777 | $45,725 | $33,355 | $1,479 | $87,336 | | LIABILITIES AND EQUITY | | | | | | | Future policy benefits | $— | $41,800 | $12,311 | $— | $54,111 | | Total liabilities | $1,542 | $42,938 | $31,821 | $1,256 | $77,557 | | Allocated equity, excluding AOCI | $4,329 | $2,668 | $2,440 | $723 | $10,160 | | Total Genworth Financial, Inc.'s stockholders' equity | $4,244 | $2,787 | $1,534 | $223 | $8,788 | | Noncontrolling interests | $991 | $— | $— | $— | $991 | - The Long-Term Care Insurance segment accounts for the largest share of future policy benefits at $41,800 million as of June 30, 2025[45] - The Enact segment's total assets were $6,777 million, with $6,589 million in cash and investments, and $991 million in noncontrolling interests as of June 30, 2025[45] Quarterly Results by Business Analyzes quarterly financial performance across individual business segments, including adjusted operating income and key operating metrics Adjusted Operating Income and Operating Metrics—Enact Segment Reports Enact segment's adjusted operating income at $141 million in Q2 2025, with Direct Primary New Insurance Written significantly increasing to $13,254 million and a 10% loss ratio Enact Segment Adjusted Operating Income (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Premiums | $245 | $245 | $490 | $246 | $249 | $244 | $241 | $980 | | Net investment income | $66 | $63 | $129 | $62 | $62 | $59 | $57 | $240 | | Total revenues | $304 | $307 | $611 | $302 | $310 | $298 | $292 | $1,202 | | Total benefits and expenses | $90 | $95 | $185 | $94 | $81 | $63 | $86 | $324 | | Adjusted operating income | $141 | $137 | $278 | $137 | $148 | $165 | $135 | $585 | Enact Segment Key Metrics (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :------------------------------------ | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Direct Primary New Insurance Written | $13,254 | $9,818 | $23,072 | $13,266 | $13,591 | $13,619 | $10,526 | $51,002 | | Direct Primary Insurance In-Force | $269,754| $268,366| | $268,825| $268,003| $266,060| $263,645| | | Direct Primary Risk In-Force | $70,401 | $69,937 | | $69,985 | $69,611 | $68,878 | $67,950 | | | Loss Ratio | 10% | 12% | 11% | 10% | 5% | (7)% | 8% | 4% | | Available Assets Above PMIERs Requirements | $1,961 | $1,966 | | $2,052 | $2,190 | $2,057 | $1,883 | | | PMIERs Sufficiency Ratio | 165% | 165% | | 167% | 173% | 169% | 163% | | - Primary delinquencies decreased slightly from 22,349 in Q1 2025 to 22,118 in Q2 2025, while new delinquencies also saw a decrease from 12,237 to 11,567[55] Adjusted Operating Income (Loss) and Statutory Impact of In-Force Rate Actions—Long-Term Care Insurance Segment Reports Long-Term Care Insurance segment's adjusted operating loss of $(37) million in Q2 2025, with statutory earnings from in-force rate actions at $342 million Long-Term Care Insurance Segment Adjusted Operating Income (Loss) (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Premiums | $578 | $571 | $1,149 | $587 | $581 | $564 | $578 | $2,310 | | Net investment income | $516 | $451 | $967 | $499 | $483 | $494 | $464 | $1,940 | | Total revenues | $1,119 | $1,051 | $2,170 | $1,065 | $1,135 | $1,011 | $1,105 | $4,316 | | Total benefits and expenses | $1,132 | $1,052 | $2,184 | $1,210 | $1,112 | $1,077 | $1,039 | $4,438 | | Adjusted operating income (loss) | $(37) | $(30) | $(67) | $(104) | $(46) | $(29) | $3 | $(176) | Statutory Impact of In-Force Rate Actions—Long-Term Care Insurance Segment (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :------------------------------------------ | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Premiums, premium tax, commissions and other expenses, net | $247 | $240 | $487 | $245 | $232 | $220 | $217 | $914 | | Reserve changes | $95 | $97 | $192 | $97 | $90 | $102 | $114 | $403 | | Statutory earnings from in-force rate actions | $342 | $340 | $682 | $355 | $410 | $445 | $462 | $1,672 | - Liability remeasurement (gains) losses were $50 million in Q2 2025, primarily due to actual variances from expected experience ($42 million)[60] Adjusted Operating Income (Loss)—Life and Annuities Segment Reports Life and Annuities segment's adjusted operating loss of $(7) million in Q2 2025, a significant improvement from Q1 2025, with total revenues at $394 million Life and Annuities Segment Adjusted Operating Income (Loss) (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Premiums | $39 | $44 | $83 | $40 | $42 | $44 | $53 | $179 | | Net investment income | $216 | $220 | $436 | $227 | $228 | $250 | $254 | $959 | | Total revenues | $394 | $421 | $815 | $412 | $429 | $454 | $461 | $1,756 | | Total benefits and expenses | $406 | $481 | $887 | $390 | $486 | $449 | $459 | $1,784 | | Adjusted operating income (loss) | $(7) | $(33) | $(40) | $5 | $(27) | $(1) | $(15) | $(38) | - The segment's adjusted operating loss improved significantly from $(33) million in Q1 2025 to $(7) million in Q2 2025[68] - Liability remeasurement (gains) losses were $10 million in Q2 2025, primarily due to actual variances from expected experience[68] Adjusted Operating Income (Loss)—Life and Annuities Segment—Life Insurance Reports Life Insurance sub-segment's adjusted operating loss of $(20) million in Q2 2025, an improvement from Q1 2025, with total revenues at $299 million Life Insurance Adjusted Operating Income (Loss) (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Premiums | $39 | $44 | $83 | $40 | $42 | $44 | $53 | $179 | | Net investment income | $139 | $144 | $283 | $147 | $146 | $167 | $167 | $627 | | Total revenues | $299 | $317 | $616 | $309 | $321 | $352 | $354 | $1,336 | | Total benefits and expenses | $334 | $373 | $707 | $310 | $373 | $377 | $391 | $1,451 | | Adjusted operating income (loss) | $(20) | $(44) | $(64) | $2 | $(40) | $(23) | $(33) | $(94) | Adjusted Operating Income—Life and Annuities Segment—Fixed Annuities Reports Fixed Annuities sub-segment's adjusted operating income of $8 million in Q2 2025, doubling from Q1 2025, with total revenues at $63 million Fixed Annuities Adjusted Operating Income (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Net investment income | $70 | $70 | $140 | $73 | $76 | $77 | $80 | $306 | | Total revenues | $63 | $73 | $136 | $70 | $75 | $70 | $73 | $288 | | Total benefits and expenses | $58 | $75 | $133 | $59 | $80 | $59 | $62 | $260 | | Adjusted operating income | $8 | $4 | $12 | $1 | $6 | $12 | $11 | $30 | Adjusted Operating Income—Life and Annuities Segment—Variable Annuities Reports Variable Annuities sub-segment's adjusted operating income of $5 million in Q2 2025, a decrease from Q1 2025, with total revenues at $32 million Variable Annuities Adjusted Operating Income (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Net investment income | $7 | $6 | $13 | $7 | $6 | $6 | $7 | $26 | | Policy fees and other income | $25 | $25 | $50 | $26 | $27 | $26 | $27 | $106 | | Total revenues | $32 | $31 | $63 | $33 | $33 | $32 | $34 | $132 | | Total benefits and expenses | $14 | $33 | $47 | $21 | $33 | $13 | $6 | $73 | | Adjusted operating income | $5 | $7 | $12 | $2 | $7 | $10 | $7 | $26 | Adjusted Operating Loss—Corporate and Other Reports Corporate and Other segment's adjusted operating loss of $(29) million in Q2 2025, an increase from Q1 2025, primarily due to net investment losses Corporate and Other Adjusted Operating Loss (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Premiums | $3 | $2 | $5 | $3 | $2 | $3 | $3 | $11 | | Net investment income | $4 | $5 | $9 | $5 | $4 | $5 | $7 | $21 | | Net investment gains (losses) | $(28) | $— | $(28) | $(5) | $— | $(2) | $(4) | $(11) | | Total revenues | $(21) | $7 | $(14) | $3 | $6 | $6 | $6 | $21 | | Total benefits and expenses | $43 | $32 | $75 | $33 | $40 | $37 | $44 | $154 | | Adjusted operating loss | $(29) | $(23) | $(52) | $(23) | $(27) | $(10) | $(38) | $(98) | - The segment includes inter-segment eliminations and results from other non-reportable businesses, such as CareScout and certain international businesses[78] Additional Financial Data Provides supplementary financial information, including detailed investment portfolio composition, credit quality, and net investment income yields Investments Summary Summarizes Genworth's investment portfolio as of June 30, 2025, with total invested assets and cash at $60,665 million, primarily in investment grade fixed maturity securities Composition of Investment Portfolio (June 30, 2025, Amounts in millions) | Investment Type | Carrying Amount | % of Total | | :------------------------------------------ | :-------------- | :--------- | | Public fixed maturity securities (Investment grade) | $26,326 | 43% | | Private fixed maturity securities (Investment grade) | $11,341 | 19% | | Commercial mortgage loans, net | $6,334 | 10% | | Policy loans | $2,366 | 4% | | Limited partnerships | $3,337 | 6% | | Cash, cash equivalents, restricted cash and short-term investments | $1,808 | 3% | | Other invested assets | $643 | 1% | | Total invested assets and cash | $60,665 | 100% | Public Fixed Maturity Securities—Credit Quality (June 30, 2025, Amounts in millions) | NRSRO Designation | Carrying Amount | % of Total | | :---------------- | :-------------- | :--------- | | AAA | $1,498 | 5% | | AA | $7,063 | 23% | | A | $9,031 | 29% | | BBB | $12,951 | 41% | | BB | $488 | 2% | | B | $46 | —% | | Total | $31,077 | 100% | Private Fixed Maturity Securities—Credit Quality (June 30, 2025, Amounts in millions) | NRSRO Designation | Carrying Amount | % of Total | | :---------------- | :-------------- | :--------- | | AAA | $652 | 4% | | AA | $1,580 | 11% | | A | $4,310 | 30% | | BBB | $7,118 | 49% | | BB | $828 | 6% | | B | $71 | —% | | CCC and lower | $21 | —% | | Not rated | $15 | —% | | Total | $14,595 | 100% | Fixed Maturity Securities Summary Details fixed maturity securities as of June 30, 2025, with a total fair value of $45,672 million, predominantly U.S. corporate bonds and investment grade holdings Fixed Maturity Securities - Security Sector (June 30, 2025, Amounts in millions) | Security Sector | Fair Value | % of Total | | :------------------------------------------ | :--------- | :--------- | | U.S. government, agencies and government-sponsored enterprises | $3,527 | 8% | | State and political subdivisions | $2,135 | 5% | | Foreign government | $1,121 | 2% | | U.S. corporate | $27,154 | 59% | | Foreign corporate | $7,302 | 16% | | Residential mortgage-backed securities | $1,044 | 2% | | Commercial mortgage-backed securities | $1,340 | 3% | | Other asset-backed securities | $2,049 | 5% | | Total fixed maturity securities | $45,672 | 100% | Corporate Bond Holdings - Industry Sector (June 30, 2025, Amounts in millions) | Industry Sector | Investment Grade | Non-Investment Grade | Total | | :------------------------ | :--------------- | :------------------- | :---- | | Finance and insurance | $8,587 | $135 | $8,722 | | Utilities | $5,043 | $69 | $5,112 | | Energy | $3,265 | $129 | $3,394 | | Consumer - non-cyclical | $4,871 | $137 | $5,008 | | Consumer - cyclical | $1,403 | $249 | $1,652 | | Capital goods | $2,818 | $143 | $2,961 | | Industrial | $1,641 | $166 | $1,807 | | Technology and communications | $3,345 | $206 | $3,551 | | Transportation | $1,495 | $— | $1,495 | | Other | $697 | $57 | $754 | | Total | $33,165 | $1,291 | $34,456 | Fixed Maturity Securities - Contractual Maturity Dates (June 30, 2025, Amounts in millions) | Maturity Period | Fair Value | % of Total | | :-------------------------------- | :--------- | :--------- | | Due in one year or less | $1,481 | 3% | | Due after one year through five years | $8,573 | 19% | | Due after five years through ten years | $11,040 | 24% | | Due after ten years | $20,145 | 44% | | Mortgage and asset-backed securities | $4,433 | 10% | | Total | $45,672 | 100% | U.S. GAAP Net Investment Income Yields Reports Genworth's Q2 2025 U.S. GAAP net investment income at $802 million, with an annualized yield of 5.0%, and limited partnerships yielding 8.4% U.S. GAAP Net Investment Income (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Fixed maturity securities - taxable | $570 | $559 | $1,129 | $556 | $557 | $571 | $554 | $2,238 | | Commercial mortgage loans | $72 | $73 | $145 | $73 | $74 | $75 | $75 | $297 | | Policy loans | $32 | $36 | $68 | $37 | $38 | $56 | $58 | $189 | | Limited partnerships | $69 | $8 | $77 | $60 | $36 | $36 | $20 | $152 | | Net investment income | $802 | $739 | $1,541 | $793 | $777 | $808 | $782 | $3,160 | Annualized Yields | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Fixed maturity securities - taxable | 4.7% | 4.6% | 4.6% | 4.6% | 4.6% | 4.7% | 4.5% | 4.6% | | Commercial mortgage loans | 4.6% | 4.6% | 4.6% | 4.5% | 4.5% | 4.5% | 4.4% | 4.5% | | Policy loans | 5.5% | 6.2% | 5.8% | 6.4% | 6.5% | 9.8% | 10.5% | 8.3% | | Limited partnerships | 8.4% | 1.0% | 4.8% | 7.7% | 4.7% | 4.9% | 2.8% | 5.1% | | Net investment income | 5.0% | 4.6% | 4.8% | 5.0% | 4.9% | 5.0% | 4.9% | 4.9% | - Yields are annualized and calculated as net investment income as a percentage of average quarterly asset carrying values, excluding unrealized fair value adjustments for fixed maturity securities and derivatives[88] Net Investment Gains (Losses)—Detail Details Genworth's Q2 2025 net investment losses of $(28) million, a shift from Q1 2025 gains, driven by realized losses on securities and derivatives Net Investment Gains (Losses)—Detail (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Total net realized investment gains (losses) | $(14) | $(3) | $(17) | $— | $(7) | $(19) | $(22) | $(48) | | Net change in allowance for credit losses on available-for-sale fixed maturity securities | $(11) | $(4) | $(15) | $(10) | $— | $7 | $— | $(3) | | Net unrealized gains (losses) on equity securities still held | $32 | $(14) | $18 | $17 | $22 | $12 | $32 | $83 | | Net unrealized gains (losses) on limited partnerships | $25 | $38 | $63 | $(3) | $55 | $(52) | $43 | $43 | | Derivative instruments | $(36) | $6 | $(30) | $(21) | $10 | $(8) | $1 | $(18) | | Net investment gains (losses), gross | $(28) | $27 | $(1) | $(41) | $66 | $(61) | $49 | $13 | - Realized losses on U.S. corporate fixed maturity securities were $(15) million in Q2 2025[91] - Net change in allowance for credit losses on available-for-sale fixed maturity securities was $(11) million in Q2 2025[91] Reconciliations of Non-GAAP Measures Provides detailed reconciliations for non-GAAP financial measures, including Operating ROE, consolidated expense ratio, and core investment yield Reconciliation of Operating ROE Reconciles Operating ROE, which was 1.8% for the twelve months ended June 30, 2025, and 2.7% for Q2 2025 on an annualized basis Twelve Month Rolling Average ROE | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------------------------------------------------------------------ | :------------ | :------------- | :------------------ | :------------------- | :------------ | | Net income available to Genworth Financial, Inc.'s common stockholders for the twelve months ended | $189 | $214 | $299 | $88 | $32 | | Adjusted operating income for the twelve months ended | $182 | $239 | $273 | $28 | $22 | | U.S. GAAP Basis ROE | 1.9% | 2.1% | 3.0% | 0.9% | 0.3% | | Operating ROE | 1.8% | 2.4% | 2.7% | 0.3% | 0.2% | Quarterly Average ROE | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------------------------------------------------------------------ | :------------ | :------------- | :------------------ | :------------------- | :------------ | | Net income (loss) available to Genworth Financial, Inc.'s common stockholders for the period ended | $51 | $54 | $(1) | $85 | $76 | | Adjusted operating income for the period ended | $68 | $51 | $15 | $48 | $125 | | Annualized U.S. GAAP Quarterly Basis ROE | 2.0% | 2.1% | —% | 3.3% | 3.0% | | Annualized Operating Quarterly Basis ROE | 2.7% | 2.0% | 0.6% | 1.9% | 4.9% | - Operating ROE is a non-GAAP measure that management believes enhances understanding of capital deployment efficiency, but it is not a substitute for U.S. GAAP net income (loss) ROE[95] Reconciliation of Consolidated Expense Ratio Reconciles the consolidated expense ratio, showing a GAAP Basis Expense Ratio of 29% and an Adjusted Expense Ratio of 24% for Q2 2025 Consolidated Expense Ratio Reconciliation (Amounts in millions) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Acquisition and operating expenses, net of deferrals | $249 | $236 | $485 | $253 | $259 | $229 | $236 | $977 | | Premiums | $865 | $862 | $1,727 | $876 | $874 | $855 | $875 | $3,480 | | GAAP Basis Expense Ratio | 29% | 27% | 28% | 29% | 30% | 27% | 27% | 28% | | Adjusted acquisition and operating expenses, net of deferrals | $249 | $236 | $485 | $255 | $261 | $244 | $241 | $1,001 | | Adjusted revenues | $1,022 | $1,020 | $2,042 | $1,030 | $1,037 | $1,022 | $1,033 | $4,122 | | Adjusted expense ratio | 24% | 23% | 24% | 25% | 25% | 24% | 23% | 24% | - The adjusted expense ratio is a non-GAAP measure used to enhance understanding of operating performance by highlighting underlying business activity and profitability drivers[100] Reconciliation of Reported Yield to Core Yield Reconciles Reported Yield to Core Yield, with Q2 2025 Reported Yield at 5.04% and Core Yield at 5.00%, adjusting for non-core investment items Reconciliation of Reported Yield to Core Yield (Amounts in billions for assets, millions for income) | Metric | 2Q 2025 | 1Q 2025 | Total 2025 YTD | 4Q 2024 | 3Q 2024 | 2Q 2024 | 1Q 2024 | Total 2024 | | :---------------------------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------ | :------ | :--------- | | Reported - Total Invested Assets and Cash | $60.7 | $60.6 | $60.7 | $60.0 | $62.6 | $60.3 | $61.0 | $60.0 | | Average Invested Assets and Cash Used in Reported and Core Yield Calculation | $63.6 | $63.7 | $63.7 | $63.9 | $64.0 | $64.0 | $64.3 | $64.1 | | Reported - Net Investment Income | $802 | $739 | $1,541 | $793 | $777 | $808 | $782 | $3,160 | | Core Net Investment Income | $796 | $735 | $1,531 | $788 | $772 | $803 | $779 | $3,142 | | Reported Yield | 5.04% | 4.64% | 4.84% | 4.97% | 4.86% | 5.04% | 4.87% | 4.93% | | Core Yield | 5.00% | 4.62% | 4.81% | 4.93% | 4.82% | 5.02% | 4.85% | 4.91% | - Adjustments to reconcile reported yield to core yield include subtracting bond calls and commercial mortgage loan prepayments, and other non-core items like cost basis adjustments on structured securities[104][106] - Core yield is a non-GAAP measure that management believes enhances understanding of the investment portfolio's underlying performance[105]