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Genworth MI Canada Inc. Reports Second Quarter 2010 Results

^{Published on 2010-07-29 13:40:50 - Market Wire}
 

 - Net premiums written were $157 million, representing a $63 million sequential increase and a $76 million increase over the second quarter of 2009. The 67% sequential and 93% increase year over year in net premiums written was primarily due to a strong Spring housing market and customer service execution. - Net premiums earned of $154 million were $2 million lower sequentially and consistent with the second quarter of 2009. At the end of the quarter, the Company had $1.9 billion in unearned premium reserves. - Losses on claims of $49 million were $10 million lower sequentially and $22 million lower than in the second quarter of 2009. The loss ratio of 32% in the second quarter was 6 points lower sequentially and 14 points lower than in the second quarter of 2009. - Investment Income of $42 million (excluding $1 million of investment losses) was $3.5 million lower sequentially and $2.7 million lower than in the second quarter of 2009. - Net operating income of $86 million was $5 million higher sequentially and $16 million higher than in the second quarter of 2009. - The expense ratio was 15%, 2 points lower sequentially and consistent with the second quarter of 2009. - The combined ratio of 47% was 8 points lower sequentially and 15 points lower than in the second quarter of 2009. - The regulatory capital ratio or Minimum Capital Test ("MCT") ratio was 154%, representing a 4 point increase sequentially and a 14 point increase over the second quarter of 2009. In July, as part of its capital plan, the Company increased its internal MCT target ratio from 135% to 145%. - Operating return on equity was 13% for the quarter, consistent sequentially and 1 point higher than the second quarter in 2009. 

 - The Company continued to improve its market position through its customer-centric sales and service strategies. During the quarter, the Company continued to enhance the customer experience and deepen certain lender relationships that resulted in higher net premiums written. - The improving loss ratio was due to fewer new delinquencies resulting from improved economic conditions and continued Homeowner Assistance Program activities. The Company is expanding its property re- marketing program to reduce losses. - The investment portfolio book yield was 4.4% and the portfolio duration was 3.4 years as at June 30, 2010. The Company continues to diversify its portfolio and position the portfolio for a rising interest rate environment. 

 ------------------------------------------------------------------------- (In millions, except per Three Months Ended Year To Date Ended share) June 30 (Unaudited) June 30 (Unaudited) ------------------- -------------------- 2010 2009 2010 2009 ------------------- -------------------- ------------------------------------------------------------------------- New Insurance Written 7,181 4,198 13,132 7,649 ------------------------------------------------------------------------- Insurance In Force 234,196 216,742 234,196 216,742 ------------------------------------------------------------------------- Net Premiums Written 157 82 252 146 ------------------------------------------------------------------------- Net Premiums Earned 154 154 309 301(2) ------------------------------------------------------------------------- Losses on Claims 49 71 109 131 ------------------------------------------------------------------------- Investment Income 41 51 90 94 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net Income 85 75 169 149(2) ------------------------------------------------------------------------- Net Operating Income(1) 86 70 167 147(2) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Fully Diluted EPS $0.72 $0.67 $1.43 $1.33(2) ------------------------------------------------------------------------- Fully Diluted Operating EPS(1) $0.73 $0.63 $1.42 $1.31(2) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Loss Ratio 32% 46% 35% 44% ------------------------------------------------------------------------- Combined Ratio 47% 62% 51% 58%(2) ------------------------------------------------------------------------- Operating Return on Equity 13% 12% 13% 14%(2) ------------------------------------------------------------------------- Minimum Capital Test Ratio 154% 140% 154% 140% ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) This is a financial measure not calculated based on Canadian generally accepted accounting principles (GAAP). See the "Non-GAAP Measures" section of this press release for additional information. (2) Including the impact of the change to the premium recognition curve in the first quarter of 2009, financial measures for the six months ended June 30, 2009 would have been: net premiums earned, $401; net income, $213; net operating income, $211; fully diluted earnings per share, $1.90; fully diluted operating earnings per share, $1.88; combined ratio, 45%, and operating return on equity, 19%.