Genworth Financial (NYSE:GNW) Q4 2025 Earnings call February 24, 2026 09:00 AM ET Company ParticipantsChristine Jewell - Head of Investor RelationsJerome Upton - CFOSamir Shah - President and CEO of CareScout ServicesTom McInerney - President and CEOOperatorGood morning, ladies and gentlemen, and welcome to Genworth Financial's fourth quarter 2025 earnings conference call. My name is Lisa, and I'll be your coordinator today. At this time, all participants are in a listen-only mode. We will facilitate a ques ...

Financial Data and Key Metrics Changes - Genworth reported net income of $2 million and Adjusted Operating Income of $8 million for Q4 2025, driven by strong performance from Enact, which contributed $146 million to Adjusted Operating Income, partially offset by a loss of $114 million in the closed block, primarily from LTC [4][21] - For the full year 2025, Adjusted Operating Income was $144 million, with Enact contributing $558 million, while the Closed Block segment reported an adjusted operating loss of $317 million [23][24] Business Line Data and Key Metrics Changes - Enact's Adjusted Operating Income for Q4 was $146 million, with a net reserve release of $60 million, while the Closed Block reported an adjusted operating loss of $114 million, primarily due to LTC [21][22] - The LTC segment experienced an adjusted operating loss of $326 million for the year, driven by a remeasurement loss and unfavorable actual-to-expected experience [23][24] Market Data and Key Metrics Changes - The CareScout Quality Network expanded to approximately 790 home care providers with over 1,000 locations, covering 97% of the U.S. population aged 65 and older, facilitating 925 matches in Q4 and ending the year with 3,255 matches, significantly exceeding targets [9][10] - CareScout launched its inaugural standalone LTC insurance product, Care Assurance, in 40 states, aiming for disciplined, scalable growth in the LTC insurance market [12] Company Strategy and Development Direction - Genworth's strategic priorities include creating shareholder value through Enact, advancing CareScout as a long-term growth strategy, and managing the closed block of business focused on existing policyholders [5][13] - The company is leveraging technology and AI to enhance customer service and operational efficiency, aiming to redefine long-term care delivery [8][17] Management's Comments on Operating Environment and Future Outlook - Management highlighted the growing bipartisan focus on healthcare affordability and the sustainability of public programs like Medicaid, emphasizing the need for flexible insurance and support services in the LTC market [16][17] - The company expects to continue scaling CareScout and anticipates significant value creation through its integrated approach to services and insurance [13][44] Other Important Information - Genworth ended Q4 with $234 million in cash and liquid assets, maintaining a disciplined capital structure and a cash interest coverage ratio of approximately 8 times [38][40] - The company secured $100 million in gross incremental LTC premium approvals in Q4, with average premium increases of 35.6% for the year [14] Q&A Session Summary Question: Importance of offering both services and insurance under CareScout - Management emphasized that CareScout is uniquely positioned to deliver the full value chain in the fragmented LTC market, helping families navigate care needs and providing affordable options through its Quality Network [46][47] Question: How CareScout supports consumers - Management noted that CareScout Services will assist the aging baby boomer population in determining care needs and finding providers, while CareScout Insurance will cater to their children and grandchildren, who will face the challenges of LTC costs [47][48]

Financial Performance and Key Metrics - Genworth reported net income of $116 million and adjusted operating income of $17 million, or $0.04 per share, driven by strong performance from its mortgage insurance subsidiary, Enact, which contributed $134 million to adjusted operating income [4][5] - The estimated pre-tax statutory income for U.S. life insurance companies was approximately $68 million year-to-date through the end of Q3 2025 [4] - The company ended the quarter with $254 million in cash and liquid assets, indicating a healthy liquidity position [4][31] Business Line Performance - The long-term care (LTC) insurance segment reported an adjusted operating loss of $100 million, primarily due to unfavorable variances in actual experience [19] - Life and annuities reported adjusted operating income of $4 million, with life insurance showing an adjusted operating loss of $15 million, while annuities generated adjusted operating income of $19 million [20] - Enact's adjusted operating income was $134 million, down slightly from the previous quarter and down 9% year-over-year, reflecting a lower reserve release [21] Market Data and Key Metrics - Enact's primary insurance in force grew slightly year-over-year to $272 billion, supported by new insurance written and elevated persistency [21] - The CareScout Quality Network expanded to over 700 providers, covering over 95% of the U.S. population aged 65 and older, with over 2,500 matches achieved year-to-date [8][9] Company Strategy and Industry Competition - Genworth's strategic priorities include creating shareholder value through Enact, stabilizing legacy LTC businesses, and driving growth through CareScout [5][6] - The acquisition of Seniorly enhances CareScout's offerings, allowing the company to reach more aging adults and families beyond its policyholder base [10][11] - The company is focused on managing LTC risk through its multi-year rate action plan (MIRAP), which has achieved approximately $31.8 billion in net present value since its inception [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining momentum and delivering on strategic objectives, despite challenges in the LTC segment due to rising claims and benefit utilization [18][19] - The company anticipates that the aging baby boomer population will drive demand for long-term care services, positioning CareScout to meet this need [37] - Management emphasized the importance of premium increases and benefit reductions in achieving self-sustainability for legacy life companies [36][40] Other Important Information - The company expects to allocate between $200-$225 million to share repurchases in 2025, with a new $350 million repurchase authorization in place [32][33] - Genworth's holding company debt stands at $790 million, with a cash-interest coverage ratio of approximately seven times [33] Q&A Session Summary Question: Long-term resolution of the LTC situation - Management highlighted ongoing efforts to ensure the self-sustainability of legacy life companies through premium increases and benefit reductions, while CareScout is positioned to assist the aging population with care needs [36][37] Question: Transition to negative statutory earnings - The primary driver of pressure on statutory income is the long-term care segment, with increasing claims and benefit utilization impacting results [39][40] Question: Future statutory income expectations - Management indicated that while there may be quarter-to-quarter variations, the goal is to achieve break-even through the multi-year rate action plan, with no expectation of generating statutory income from the legacy LTC block [44]

Financial Performance - Genworth reported net income of $116 million, or $0.28 per diluted share, and adjusted operating income of $17 million, or $0.042 per diluted share[12] - Enact reported adjusted operating income of $134 million and distributed $110 million in capital returns to Genworth[12] - U S life insurance companies' RBC ratio was 303%, a slight decrease from the prior quarter[12] - Genworth holding company cash and liquid assets totaled $254 million at quarter-end[12] Strategic Progress - Enact has provided $1 12 billion in capital returns since its IPO[16] - The company executed $76 million in share repurchases in 3Q and $696 million program-to-date through September 30, 2025[16] - Long-Term Care(LTC) in-force rate actions(IFAs) have achieved an estimated net present value(NPV) of ~$31 8 billion since 2012[16] - Gross incremental LTC premium approvals in 3Q totaled $44 million[16] CareScout Growth - CareScout Quality Network(CQN) continued to grow, with 950 matches in 3Q[16] - CareScout acquired Seniorly in October, accelerating growth into senior living communities[16] - The cumulative benefit reduction rate in LTC is 60 5%[16]