Genworth MI Canada Inc. Second Quarter 2013

1. Genworth MI Canada Inc.
Second
Quarter
2013
July
31,
2013

2. Forward-­‐looking
and
non-­‐IFRS
statements
This
presenta?on
includes
certain
forward-­‐looking
statements.
These
forward-­‐looking
statements
include,
but
are
not
limited
to,
statements
with
respect
to
the
Company’s
future
opera?ng
and
financial
results,
expecta?ons
regarding
premiums
wriIen,
capital
expenditure
plans,
dividend
policy
and
the
ability
to
execute
on
its
future
opera?ng,
inves?ng
and
financial
strategies,
and
other
statements
that
are
not
historical
facts.
These
forward-­‐looking
statements
may
be
iden?fied
by
their
use
of
words
such
as
“may,”
“would,”
“could,”
“will,”
“expects,”
“an?cipates,”
“contemplates,”
“intends,”
“plans,”
“believes,”
“seeks,”
“es?mates,”
or
words
of
similar
meaning.
These
statements
are
based
on
the
Company’s
current
assump?ons,
including
assump?ons
regarding
economic,
global,
poli?cal,
business,
compe??ve,
market
and
regulatory
maIers.
These
forward-­‐looking
statements
are
inherently
subject
to
significant
risks,
uncertain?es
and
changes
in
circumstances,
many
of
which
are
beyond
the
control
of
the
Company.
The
Company’s
actual
results
may
differ
materially
from
those
expressed
or
implied
by
such
forward-­‐looking
statements,
including
as
a
result
of
changes
in
the
facts
underlying
the
Company’s
assump?ons,
and
the
other
risks
described
in
the
Company’s
Annual
Informa?on
Form
dated
March
29,
2013,
its
Short
Form
Base
Shelf
Prospectus
dated
May
31,
2012,
the
Prospectus
Supplements
thereto
and
all
documents
incorporated
by
reference
in
such
documents.
Other
than
as
required
by
applicable
laws,
the
Company
undertakes
no
obliga?on
to
publicly
update
or
revise
any
forward-­‐looking
statement,
whether
as
a
result
of
new
informa?on,
future
developments
or
otherwise.
To
supplement
its
financial
statements,
the
Company
uses
select
non-­‐IFRSs
financial
measures.
Non-­‐IFRSs
measures
used
by
the
Company
to
analyze
performance
include
underwri?ng
ra?os
such
as
loss
ra?o,
expense
ra?o
and
combined
ra?o,
as
well
as
other
performance
measures
such
as
net
opera?ng
income
and
return
on
net
opera?ng
income.
The
Company
believes
that
these
non-­‐IFRSs
financial
measures
provide
meaningful
supplemental
informa?on
regarding
its
performance
and
may
be
useful
to
investors
because
they
allow
for
greater
transparency
with
respect
to
key
metrics
used
by
management
in
its
financial
and
opera?onal
decision
making.
Non-­‐IFRSs
measures
do
not
have
standardized
meanings
and
are
unlikely
to
be
comparable
to
any
similar
measures
presented
by
other
companies.
These
measures
are
defined
in
the
Company’s
glossary,
which
is
posted
on
the
Company’s
website
at
hIp://investor.genworthmicanada.ca.
A
reconcilia?on
from
non-­‐IFRSs
financial
measures
to
the
most
readily
comparable
measures
calculated
in
accordance
with
IFRSs
can
be
found
in
the
Company’s
most
recent
financial
statements,
which
are
posted
on
the
Company’s
website
and
are
also
available
at
www.sedar.com.
Genworth MI Canada Inc.
2
Q22013 July 31, 2013

3. Net
opera?ng
income
higher
by
11%
Q2
2013
Net
opera?ng
income
Q2
2012
$88
million
$79
million
Opera?ng
Return
on
equity
12%
$0.89
Opera?ng
earnings
per
share
(diluted)
12%
$0.79
Book
Value
Per
Share
(diluted,
including
AOCI)
11%
CAGR
$30.62
$27.88
Q2
2012
Genworth MI Canada Inc.
$31.32
$30.94
Q1
2013
Q22013
$28.72
Q3
2012
Q4
2012
3
Q22013 July 31, 2013

4. Solid
results
for
Q2
2013
Priority
Result

Premiums
wriIen
$137
million
of
new
premiums
wriIen

Prudent
risk
management
Loss
ra?o
of
25%

Investment
porbolio
return
$5.3
billion
investment
porbolio
Book
yield
of
3.6%
as
at
June
30,
2013

Capital
strength
Minimum
capital
test
of
216%

Dividends
and
return
to
shareholders
Quarterly
dividend
of
$0.32
per
common
share
Repurchased
$50
million
in
common
shares
Genworth MI Canada Inc.
4
Q22013 July 31, 2013

5. Broad
based
improvement
in
delinquencies
Number of delinquencies &
Delinquency rate
Insurance
in-­‐force
June
30
2013
March
31
2013
June
30
2012
June
30
2013
Ontario
453
533
649
46%
BC
318
337
395
15%
Alberta
301
337
551
16%
Quebec
451
507
587
14%
Other
255
249
226
9%
Total
1,778
1,963
2,408
100%
Delinquency
rate
0.12%
0.14%
0.17%
26%
decline
in
number
of
delinquencies
over
prior
year
Genworth MI Canada Inc.
5
Q22013 July 31, 2013

6. Canadian
market
update
Macroeconomic
environment
• Solid
outlook
for
Canadian
economy
2013
New
Insurance
WriZen
• Unemployment
rate
stable
• Average
credit
score
732
• Monetary
policy
suppor?ng
growth
• Average
GDS*
of
23%
Housing
market
• Home
prices
up
a
modest
4%
 Balanced
housing
market
• 89%
locking
in
the
5-­‐yr
fixed
rate
 Low
interest
rates
con?nue
• Average
home
purchase
price
$318K
 Trending
towards
a
som
landing
*
GDS
=
Gross
Debt
Service
which
represents
principal,
interest
and
taxes
as
a
%
of
gross
family
income
Genworth MI Canada Inc.
6
Q22013 July 31, 2013

7. Demonstrated
track
record
of
performance
$
millions
(except
EPS)
Q2
2013
Q1
2013
Q2
2012
Net
premiums
wriZen
$137
$84
$176
Premiums
earned
143
144
148
Losses
on
claims
(35)
(44)
(48)
Underwriang
income
82
74
76
Net
investment
income
(excluding
gains/losses)
44
45
40
$88
$85
$79
$0.89
$0.86
$0.79
$30.94
$31.32
$27.88
Net
operaang
income
Operaang
EPS
(diluted)
Book
value
per
share
(diluted
and
including
AOCI)
Genworth MI Canada Inc.
7
Q22013 July 31, 2013

8. Core
business
steady,
in
line
with
market
Premiums
wriZen
($millions)
47
11
10
26
11
17
3
160
Pordolio
121
3
11
3
108
99
Refinance
71
Purchase
Q2‘12
Q2
2012
QQ3‘12
Q4
2012
QQ1‘13
Q2
2013
3
2012
Q4‘12
1
2013
Q2‘13
Gross
PW
179
181
119
84
137
Risk
premium
(2)
(3)
(2)
-­‐
-­‐
$84
 2012
product
changes
have
resulted
in
slower
real
estate
ac?vity
 Premiums
from
purchases
down
10%
year-­‐
over-­‐year
consistent
with
slower
resale
volumes
 Con?nued
to
selec?vely
par?cipate
in
porbolio
insurance
$137
Net
PW
$176
$178
$117
(PW
represents
premiums
wriIen)
$1.7
billion
in
unearned
premiums
Genworth MI Canada Inc.
8
Q22013 July 31, 2013

9. Solid
underwri?ng
performance
($millions)
Premiums
earned
Losses
on
claims
Underwriang
profit
$148
$147
35
Underwriang
profit
48
44
46
44
25
26
28
26
76
77
73
74
82
Q2'12
Expenses
 Strong
porbolio
quality
&
stable
economic
condi?ons
posi?vely
influencing
loss
performance
$147
$144
$143
Q3'12
Q4'12
Q1'13
Q2'13
26
Loss
ra?o
32%
30%
31%
31%
17%
18%
19%
18%
18%
Combined
raao
49%
48%
50%
49%
 Q2
loss
ra?o
of
25%,
improved
by
6
points
25%
Expense
ra?o
 New
reported
delinquencies
declined
by
9%
sequen?ally
43%
Consistent
underwriang
profit
Genworth MI Canada Inc.
9
Q22013 July 31, 2013

10. Investment
porbolio
remains
high
quality
 Balanced
high
quality
porbolio
• 50%
federal
&
provincial
bonds
Cash
5%
• 41%
corporate
bonds
Common Equity
5%
• 95%
of
bonds
‘A’
or
higher
Total
$5.3
billion
 $193
million
posi?ve
mark-­‐to-­‐market
Federal
37%
$
Billion
Corporates
41%
Assets
(MV)
Provincial
13%
Pre-­‐tax
yield1
Dura?on
Pordolio
$5.3
3.6
%
3.6
years
1Pre-­‐tax
equivalent
book
yield
amer
dividend
gross-­‐up
of
general
porbolio
(as
at
June
30,
2013)
Genworth MI Canada Inc.
10
Q22013 July 31, 2013

11. Strong
capital
posi?on
with
flexibility
Minimum
Capital
Test
Raao
(MCT
raao)
216%
31%
156%
31%
185%
162%
216%
185%
Q1
2013
Q2
2013
170%
25%
11%
17%
145%
145%
145%
2010
2011
2012
Internal
MCT
raao
target
Repurchased
$50
million
common
shares
during
quarter
Genworth MI Canada Inc.
11
Q22013 July 31, 2013

12. Our
core
strengths!
Proven
business
model
Disciplined
execuaon
Strong
risk
focus
Capital
flexibility
Solid
financial
foundaaon
Genworth MI Canada Inc.
12
Q22013 July 31, 2013

13. Ques?on
and
Answer
SAMANTHA
CHEUNG
For
further
info:
Genworth MI Canada Inc.
VP
INVESTOR
RELATIONS
905
287
5482
samantha.cheung@genworth.com
www.genworth.ca
13
Q22013 July 31, 2013