Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Genworth Financial Inc (GNW, Financial) reported a net income of $139 million and adjusted operating income of $85 million in the first quarter.
- Enact, a subsidiary of Genworth Financial Inc (GNW), had a strong quarter with adjusted operating income of $135 million and announced a $250 million expansion of its share repurchase program.
- The LTC segment of Genworth Financial Inc (GNW) reported adjusted operating income of $3 million, driven by seasonally higher claim terminations.
- Genworth Financial Inc (GNW) achieved $41 million of gross incremental premium approvals with an average percentage premium increase of 25%.
- CareScout, part of Genworth Financial Inc (GNW), is expanding with the CareScout Quality Network now available in over 30 states, enhancing long-term care options and potentially reducing claim costs.
Negative Points
- The life and annuities segment of Genworth Financial Inc (GNW) reported an adjusted operating loss of $15 million, primarily due to losses in life insurance.
- Despite positive first-quarter results, Genworth Financial Inc (GNW) anticipates LTC earnings pressure throughout the remainder of the year with expected liability remeasurement losses.
- Genworth Financial Inc (GNW) experienced unfavorable tax timing of $15 million in the corporate and other segment, expected to reverse by year-end.
- The adjusted operating losses in life and annuities were partially offset by losses in corporate and other totaling $38 million.
- Genworth Financial Inc (GNW) faces ongoing volatility in GAAP results, although statutory results are considered more reflective of underlying performance.
Q & A Highlights
Q: Can you provide an overview of Genworth's financial performance in the first quarter of 2024?
A: (Thomas McInerney - President and CEO) Genworth reported a net income of $139 million, or $0.31 per share, and an adjusted operating income of $85 million, or $0.19 per share. The results were significantly bolstered by Enact, which contributed an adjusted operating income of $135 million to Genworth.
Q: How has Enact contributed to Genworth's financial health in this quarter?
A: (Thomas McInerney - President and CEO) Enact had a strong quarter with a $250 million expansion of its share repurchase program and an increase in its ordinary dividend. Genworth has benefited from approximately $675 million in capital from Enact since its IPO, including $61 million in the first quarter alone.
Q: What progress has been made in Genworth's strategic priorities, particularly in the LTC insurance business?
A: (Thomas McInerney - President and CEO) We've made significant strides in strengthening our legacy LTC insurance business through our multi-year rate action plan (MYRAP), achieving $41 million of gross incremental premium approvals with an average increase of 25% in premiums.
Q: Can you discuss the developments in the CareScout Services and its impact on Genworth's strategy?
A: (Thomas McInerney - President and CEO) CareScout Services is expanding, with the CareScout Quality Network now available in over 30 states. This network is expected to drive future growth by providing high-quality care at negotiated rates, which should also help reduce LTC claim costs significantly.
Q: What are the key financial metrics from Enact's performance this quarter?
A: (Jerome Upton - EVP and CFO) Enact's adjusted operating income was $135 million, with primary insurance in force growing by 4% year over year to $264 billion. Enact's strong performance continues to support Genworth's financial stability and shareholder value.
Q: How is Genworth managing its investment portfolio in the current economic environment?
A: (Jerome Upton - EVP and CFO) Our investment portfolio is predominantly composed of investment-grade fixed maturities, aligning with the long duration of our liabilities. We continue to benefit from the high interest rate environment and maintain a cautious approach towards our commercial real estate exposure.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
