Genworth(US:GNW)2021-05-04 16:00Financial Performance - Genworth Financial reported a net income of $187 million for Q1 2021, a significant improvement from a net loss of $66 million in Q1 2020[273]. - Total revenues increased by 10% to $1,985 million compared to $1,809 million in the prior year[1]. - Net investment income rose by 2% to $801 million from $782 million[1]. - Net investment gains improved significantly to $33 million from a loss of $99 million, representing a 133% change[1]. - Adjusted operating income available to common stockholders was $168 million for Q1 2021, significantly up from $20 million in Q1 2020[307]. - Basic earnings per share increased to $0.37 in Q1 2021 from a loss of $0.13 in Q1 2020, while diluted earnings per share also improved to $0.37 from a loss of $0.13[310]. - Total revenues for the U.S. Life Insurance segment increased to $1,620 million in Q1 2021, up 9% from $1,487 million in Q1 2020[404]. - Adjusted operating income available to common stockholders decreased to $62 million, down 70% from $132 million in the prior year[409]. Insurance Operations - The U.S. Mortgage Insurance segment had adjusted operating income of $126 million in Q1 2021, down from $148 million in Q1 2020, primarily due to higher losses from new delinquencies related to COVID-19[273]. - New insurance written in the U.S. Mortgage Insurance segment rose to $24.9 billion in Q1 2021, a 39% increase compared to Q1 2020, fueled by higher refinance and purchase originations[279]. - The long-term care insurance business generated adjusted operating income of $95 million in Q1 2021, up from $1 million in Q1 2020, driven by higher claim terminations and favorable development on incurred but not reported claims[273]. - The company implemented significant premium rate increases in its long-term care insurance business, receiving 43 filing approvals representing a weighted-average increase of 40% on approximately $396 million in annualized in-force premiums[280]. - The U.S. Life Insurance segment experienced a decrease of $4 million in premiums, with long-term care insurance showing a $4 million increase[2]. Strategic Initiatives - Genworth Financial plans to raise liquidity to address future debt maturities and other near-term liabilities, with a focus on long-term shareholder value[266]. - The company is focused on stabilizing its U.S. life insurance businesses through a multi-year long-term care insurance in-force rate action plan[269]. - Genworth is preparing for a planned partial sale of its U.S. mortgage insurance business, subject to market conditions and necessary approvals[266]. - Genworth is open to exploring other strategic alternatives to address future holding company debt maturities and financial obligations[266]. - The termination of the merger agreement with China Oceanwide may adversely affect Genworth's business and stock price[261]. Market Conditions - The U.S. unemployment rate was 6.0% in March 2021, down from a peak of 14.8% in April 2020, indicating a gradual economic recovery[320]. - Mortgage origination activity remained robust in Q1 2021, driven by refinance activity and strong home sales, although sales of previously owned homes decreased by 3.7% in early 2021[322]. - The total unsold inventory of single-family homes was low at a 1.9-month supply as of February 2021, contributing to rising home prices[322]. - The company continues to monitor the impact of COVID-19 on its business, with potential adverse effects on future results due to ongoing uncertainties[323]. Risk Management - As of March 31, 2021, the PMIERs sufficiency ratio for the U.S. mortgage insurance business was 159%, indicating $1,764 million above the required assets[277]. - The delinquency rate for primary insurance was 4.48% as of March 31, 2021, up from 1.78% a year earlier[365]. - Approximately 54% of new primary delinquencies in Q1 2021 were subject to a forbearance plan, compared to less than 5% in prior quarters[335]. - The company continues to monitor cash and liquid investments to ensure obligations can be met under stressed liquidity scenarios[381]. Regulatory and Compliance - Standard & Poor's modified its outlook for Genworth from Negative to Creditwatch Positive, contingent on the successful execution of its strategic plan[284]. - The GSE Restrictions require GMICO to maintain 115% of PMIERs minimum required assets through 2021, increasing to 125% thereafter[340]. - The approval process for in-force rate actions varies by state, affecting the timing and amount of premium increases realized over time[392].