Genworth(US:GNW)2019-05-01 18:20Financial Data and Key Metrics Changes - In Q1 2019, Genworth reported adjusted operating income of $121 million, or $0.24 per diluted share, compared to $125 million, or $0.25 per diluted share in the prior-year period [6][7] - Net income for the quarter was $174 million, reflecting strong performance in mortgage insurance businesses [15] Business Line Data and Key Metrics Changes - U.S. Mortgage Insurance (MI) adjusted operating income increased 12% year-over-year to $124 million, driven by strong premium growth and favorable loss performance [7][16] - Canadian MI adjusted operating income declined 10% year-over-year to $41 million due to lower earned premiums and increased expenses [8] - Australian MI adjusted operating income decreased 26% year-over-year to $14 million, primarily due to lower premiums from portfolio seasoning [8] - The Life Insurance segment recorded an operating loss of $5 million, flat with Q1 2018, impacted by higher long-term care (LTC) claims severity and frequency [8][20] Market Data and Key Metrics Changes - U.S. MI generated $9.6 billion in new insurance written (NIW), up 3% sequentially and 7% year-over-year [16][17] - In Canada, flow NIW decreased 33% sequentially and 8% year-over-year due to ongoing affordability pressures [18] - In Australia, flow new business levels were down 15% versus the prior quarter but up 9% versus the prior year [19] Company Strategy and Development Direction - Genworth's strategic priorities include growing earnings and building capital in mortgage businesses and strengthening the U.S. Life business through LTC rate action plans [14][36] - The company is focused on achieving actuarially justified premium rate increases and benefit reductions through its LTC rate action plan [9][21] Management's Comments on Operating Environment and Future Outlook - Management noted a solid macroeconomic environment with steady growth, low unemployment, and stable housing trends supporting mortgage insurance performance [15][16] - The company is actively engaged with regulators regarding the Oceanwide transaction, which has faced delays but remains a priority for completion [10][12][60] Other Important Information - Genworth and Oceanwide extended the merger agreement from April 30, 2019, to June 30, 2019, to allow additional time for Canadian regulatory review [11][14] - The company received 24 state approvals for LTC premium increases impacting $241 million of in-force premiums, with an average annual increase of 62% [9] Q&A Session Summary Question: Can you talk about the Canadian review timeline and any recent contact? - Management indicated that significant discussions began in January 2019, with the last meeting in early February, but no timeframe for completion was provided [40] Question: Are there any requirements regarding China Oceanwide's financial conditions? - No specific requirements were mentioned, and regulators will continue to review new information until the deal closes [42][43] Question: Is there a possibility of needing to re-seek approvals if delays continue? - Management expressed confidence that existing approvals would remain valid and supportive, focusing on completing the Canadian review [58][60] Question: Can you provide insight on Oceanwide's financing for the transaction? - Management confirmed that Oceanwide has significant excess cash and capital, both within China and outside, to fund the transaction [62]