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Genworth(GNW) - 2024 Q4 - Earnings Call Transcript
GNWGenworth(GNW)2025-02-19 18:34
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Financial Data and Key Metrics Changes - For Q4 2024, Genworth reported a net loss of 1million,whileadjustedoperatingincomewas1 million, while adjusted operating income was 15 million, primarily driven by Enact's strong performance contributing 137milliontoadjustedoperatingincome[13][14]−Forthefullyear,netincomewas137 million to adjusted operating income [13][14] - For the full year, net income was 299 million or 0.68pershare,withadjustedoperatingincomeof0.68 per share, with adjusted operating income of 273 million [14][33] - The total estimated pretax statutory loss for U.S. life insurance companies was 33millionforQ4,whilefull−yearstatutorypretaxincomewas33 million for Q4, while full-year statutory pretax income was 378 million, including a 355millionbenefitfromlegalsettlements[15][48]BusinessLineDataandKeyMetricsChanges−Thelong−termcare(LTC)insurancesegmentreportedanadjustedoperatinglossof355 million benefit from legal settlements [15][48] Business Line Data and Key Metrics Changes - The long-term care (LTC) insurance segment reported an adjusted operating loss of 104 million in Q4, driven by liability remeasurement losses and unfavorable assumption updates [30] - Enact's adjusted operating income for Q4 was 137million,reflectinga6137 million, reflecting a 6% year-over-year increase, with primary insurance in force growing 2% year-over-year to a record 269 billion [34][35] - The adjusted operating loss for LTC for the full year was 176million,primarilyduetoremeasurementlosses[33]MarketDataandKeyMetricsChanges−Enact′sPMIERsufficiencyratioremainedstrongat167176 million, primarily due to remeasurement losses [33] Market Data and Key Metrics Changes - Enact's PMIER sufficiency ratio remained strong at 167%, approximately 2.1 billion above requirements [35] - Genworth's share of Enact's book value increased to 4.1billionatyear−end2024,upfrom4.1 billion at year-end 2024, up from 3.8 billion at year-end 2023 [36] Company Strategy and Development Direction - The company aims to create shareholder value through its 81% ownership stake in Enact, which has returned 903millionincapitalsinceitsIPO,including903 million in capital since its IPO, including 289 million in 2024 [17] - The CareScout Quality Network has expanded to cover 86% of the aged 65-plus population in the U.S., with nearly 500 providers joining the network [11][12] - The company plans to invest 75millioninthenewCareScoutInsuranceCompanyin2025tomeetregulatoryrequirements[26]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceintheprogressmadein2024andthemomentumbuildingforfuturegrowth,particularlythroughCareScoutandEnact[7][28]−Thecompanyanticipatesgenerating75 million in the new CareScout Insurance Company in 2025 to meet regulatory requirements [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress made in 2024 and the momentum building for future growth, particularly through CareScout and Enact [7][28] - The company anticipates generating 1 billion to 1.5billioninclaimssavingsovertimethroughtheCareScoutQualityNetwork[22]−Managementhighlightedtheimportanceofmaintainingself−sustainabilityinlegacyLTCbusinessesthroughthemultiyearrateactionplan(MYRAP)[18][39]OtherImportantInformation−ThecompanyendedQ4withholdingcompanycashandliquidassetsof1.5 billion in claims savings over time through the CareScout Quality Network [22] - Management highlighted the importance of maintaining self-sustainability in legacy LTC businesses through the multiyear rate action plan (MYRAP) [18][39] Other Important Information - The company ended Q4 with holding company cash and liquid assets of 294 million, including 186millionsetasideforfutureobligations[16][52]−Genworthrepurchased51millionsharesinQ4atanaveragepriceof186 million set aside for future obligations [16][52] - Genworth repurchased 51 million shares in Q4 at an average price of 7.32 per share, with plans to allocate 100millionto100 million to 120 million for share repurchases in 2025 [54][55] Q&A Session Summary Question: Update on CareScout Services revenue expectations - Management indicated that CareScout Services already generates revenue from the assessment business and expects to grow products and customer base in 2025 [60][61] Question: Timing of the U.K. court case - The court case between AXA and Santander is scheduled for early March, with an expected duration of about six weeks if it goes to trial [67][68] Question: Funding for CareScout Insurance entity - The capital contribution for the new CareScout Insurance entity will be funded from existing holding company resources, as part of the base operating plan [69][71]