GNW Genworth Financial Inc

Continued progress on the LTC¹ multi-year rate action plan (MYRAP) with $124M of gross incremental premium approvals; approximately $30B estimated net present value achieved from in-force rate actions (IFAs) since 2012

Expanded the CareScout Quality Network to 49 states through October, covering over 75% of the aged 65-plus Census population in the United States; on track to achieve 80% to 85% coverage by year-end

Executed $36M in share repurchases in the quarter; $144M executed year-to-date through October at an average price of $6.29 per share

Repurchased $17M in principal of holding company debt at a discount

Net income² of $85M, or $0.19 per diluted share, and adjusted operating income^2,3 of $48M, or $0.11 per diluted share

Enact reported adjusted operating income of $148M²; distributed $81M in capital returns to Genworth

U.S. life insurance companies’ RBC⁴ ratio of 317%⁵ reflects strong year-to-date statutory pre-tax income

Genworth holding company cash and liquid assets of $369M⁶ at quarter-end

Consolidated Metrics

(Amounts in millions, except per share data)

Net income²

Earnings per diluted share²

Adjusted operating income^2,3

Adjusted operating income per diluted share^2,3

Weighted-average diluted shares

Net income in the quarter was driven by Enact, which had very strong operating performance

Net investment gains, net of taxes, increased net income by $52 million in the current quarter, compared with net investment losses of $48 million in the prior quarter and $34 million in the prior year. The investment gains in the current quarter were driven primarily by mark-to-market adjustments on limited partnerships and equity securities

Changes in the fair value of market risk benefits and associated hedges, net of taxes, decreased net income by $17 million in the quarter driven primarily by an unfavorable change in interest rates, compared with increases of $6 million in the prior quarter and $19 million in the prior year

Net investment income, net of taxes, was $614 million in the quarter, down from $638 million in the prior quarter driven by lower income from policy loans and U.S. Government Treasury Inflation-Protected Securities (TIPS)

GAAP Operating Metrics

(Dollar amounts in millions)

Adjusted operating income²

Primary new insurance written

Loss ratio

Equity⁷

Current quarter results reflected a pre-tax reserve release of $65 million primarily from favorable cure performance. The prior quarter and prior year included pre-tax reserve releases of $77 million and $55 million, respectively

Net investment income of $62 million in the current quarter was up from $55 million in the prior year from higher yields and higher average invested assets

Primary insurance in-force increased two percent versus the prior year to $268 billion driven by new insurance written (NIW) and continued elevated persistency

Primary NIW was down six percent versus the prior year primarily driven by Enact’s lower estimated market share

New delinquencies increased 17 percent to 12,964 from 11,107 in the prior year primarily from continued seasoning of large, newer books

Capital Metric

PMIERs Sufficiency Ratio^5,8

Enact paid a quarterly dividend of $0.185 per share in the current quarter

Estimated PMIERs sufficiency ratio of 173 percent, $2,190 million above requirements

GAAP Operating Metrics

(Amounts in millions)

Adjusted operating loss

Premiums

Net investment income

Liability remeasurement gains (losses)

Cash flow assumption updates

Actual to expected experience

Premiums increased versus the prior quarter primarily driven by seasonal trends typically observed in the third quarter and decreased versus the prior year primarily driven by lower renewal premiums as a result of benefit reduction elections in connection with IFAs and legal settlements and from policy terminations

Net investment income decreased from the prior quarter driven by lower TIPS income

Current quarter liability remeasurement loss included adverse actual to expected experience primarily from higher claims and lower terminations, partially offset by favorable cash flow assumption updates largely related to higher approval amounts of certain IFAs

Prior quarter included a $24 million pre-tax benefit from net insurance recoveries

GAAP Adjusted Operating Income (Loss)

(Amounts in millions)

Life Insurance

Fixed Annuities

Variable Annuities

Total Life and Annuities

Current quarter results reflected unfavorable mortality

The prior year included an unfavorable after-tax impact of $9 million from a voluntary recapture of previously ceded reinsurance

Current quarter results reflected unfavorable mortality and lower net spread income primarily from block runoff

(Dollar amounts in millions)

Statutory Pre-Tax Income (Loss)^5,10

Long-Term Care Insurance

Life Insurance

Fixed Annuities

Variable Annuities

GLIC Consolidated RBC Ratio^4,5

Statutory pre-tax income was $411 million year-to-date, with a pre-tax loss of $18 million in the current quarter

LTC results reflected a lower pre-tax benefit from IFAs and legal settlements as the Choice II legal settlement nears completion and the impact of higher new claims as the block ages; prior quarter included a benefit from net insurance recoveries

Life insurance results included unfavorable mortality and seasonal impacts versus the prior quarter; prior year included $45 million of pre-tax unfavorable impacts from recaptures of previously ceded reinsurance

Fixed annuities results reflected unfavorable mortality and lower net spread income primarily from block runoff

Variable annuity results included a net benefit from equity markets and interest rates, though lower than prior quarter

Current quarter estimated GLIC consolidated RBC ratio was 317 percent, down from the prior quarter due to higher required capital from investment in limited partnerships

The current quarter adjusted operating loss was $27 million, up from $10 million in the prior quarter primarily driven by timing of tax related items and $18 million in the prior year primarily driven by higher expenses related to CareScout growth initiatives

(Amounts in millions)

Holding Company Cash and Liquid Assets¹¹

Cash and liquid assets of $369 million in the quarter, including $162 million of advance cash payments from the company’s subsidiaries held for future obligations

Cash inflows during the current quarter consisted of $81 million from Enact capital returns and $60 million from intercompany tax payments held for future obligations

Current quarter cash outflows included $36 million in share repurchases, $12 million related to debt servicing costs and the repurchase of $17 million in principal of holding company debt at a discount

In the third quarter of 2024, the company repurchased $36 million of its common stock at an average price of $6.38 per share leaving 428 million shares outstanding at the end of the quarter

Executed $503 million in share repurchases program-to-date through October at an average price of $5.54 per share

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the inability to successfully launch new lines of business, including long-term care insurance and other products and services the company is pursuing with CareScout;

the company’s failure to maintain self-sustainability of its legacy life insurance subsidiaries, including as a result of the inability to achieve desired levels of in-force rate actions and/or the timing of future premium rate increases and associated benefit reductions taking longer to achieve than originally assumed; other regulatory actions negatively impacting the company’s life insurance businesses;

inaccuracies or changes in estimates, assumptions, methodologies, valuations, projections and/or models, which result in inadequate reserves or other adverse results (including as a result of any changes in connection with quarterly, annual or other reviews, including reviews the company expects to complete in the fourth quarter of 2024);

the impact on holding company liquidity caused by an inability to receive dividends or any other returns of capital from Enact Holdings, and limited sources of capital and financing and the need to seek additional capital on unfavorable terms;

adverse changes to the structure or requirements of Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) or the U.S. mortgage insurance market; an increase in the number of loans insured through federal government mortgage insurance programs, including those offered by the Federal Housing Administration; the inability of Enact Holdings and/or its U.S. mortgage insurance subsidiaries to continue to meet the requirements mandated by PMIERs (or any adverse changes thereto), inability to meet minimum statutory capital requirements of applicable regulators or the mortgage insurer eligibility requirements of Fannie Mae or Freddie Mac;

changes in economic, market and political conditions including as a result of elevated inflation, labor shortages and elevated interest rates, which could heighten the risk of a future recession; unanticipated financial events, which could lead to market-wide liquidity problems and other significant market disruption resulting in losses, defaults or credit rating downgrades of other financial institutions; deterioration in economic conditions, a recession or a decline in home prices, all of which could be driven by many potential factors; political and economic instability or changes in government policies, including U.S. federal tax laws or rates, and at regulatory agencies as a result of any change in administration due to the 2024 U.S. presidential election; and fluctuations in international securities markets;

downgrades in financial strength and credit ratings and potential adverse impacts to liquidity; counterparty credit risks; defaults by counterparties to reinsurance arrangements or derivative instruments; defaults or other events impacting the value of invested assets;

changes in tax rates or tax laws, or changes in accounting and reporting standards;

litigation and regulatory investigations or other actions, including commercial and contractual disputes with counterparties;

the inability to retain, attract and motivate qualified employees or senior management;

the loss of significant key customers and distribution relationships by Enact Holdings;

the impact from deficiencies in the company’s disclosure controls and procedures or internal control over financial reporting;

the occurrence of natural or man-made disasters, including geopolitical tensions and war (including the Russian invasion of Ukraine and the Israel-Hamas conflict), a public health emergency, including pandemics, or climate change;

the inability to effectively manage information technology systems (including artificial intelligence), cyber incidents or other failures, disruptions or security breaches of the company or its third-party vendors, as well as unknown risks and uncertainties associated with artificial intelligence;

the inability of third-party vendors to meet their obligations to the company;

the lack of availability, affordability or adequacy of reinsurance to protect the company against losses;

a decrease in the volume of high loan-to-value home mortgage originations or an increase in the volume of mortgage insurance cancellations;

unanticipated claims against Enact Holdings’ delegated underwriting program;

the impact of medical advances such as genetic research and diagnostic imaging, emerging new technology, including artificial intelligence and related legislation; and

other factors described in the risk factors contained in Item 1A of the company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on February 29, 2024.

Revenues:

Premiums

Net investment income

Net investment gains (losses)

Policy fees and other income

Total revenues

Benefits and expenses:

Benefits and other changes in policy reserves

Liability remeasurement (gains) losses

Changes in fair value of market risk benefits and associated hedges

Interest credited

Acquisition and operating expenses, net of deferrals

Amortization of deferred acquisition costs and intangibles

Interest expense

Total benefits and expenses

Income from continuing operations before income taxes

Provision for income taxes

Income from continuing operations

Loss from discontinued operations, net of taxes

Net income

Less: net income attributable to noncontrolling interests

Net income available to Genworth Financial, Inc.’s common stockholders

Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share:

Basic

Diluted

Net income available to Genworth Financial, Inc.’s common stockholders per share:

Basic

Diluted

Weighted-average common shares outstanding:

Basic

Diluted

Net income available to Genworth Financial, Inc.’s common stockholders

Add: net income attributable to noncontrolling interests

Net income

Less: loss from discontinued operations, net of taxes

Income from continuing operations

Less: net income from continuing operations attributable to noncontrolling interests

Income from continuing operations available to Genworth Financial, Inc.’s common stockholders

Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders:

Net investment (gains) losses, net¹²

Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges¹³

(Gains) losses on early extinguishment of debt, net¹⁴

Expenses related to restructuring

Taxes on adjustments

Adjusted operating income

Adjusted operating income (loss):

Enact segment

Long-Term Care Insurance segment

Life and Annuities segment:

Life Insurance

Fixed Annuities

Variable Annuities

Total Life and Annuities segment

Corporate and Other

Adjusted operating income

Net income available to Genworth Financial, Inc.’s common stockholders per share:

Basic

Diluted

Adjusted operating income per share:

Basic

Diluted

Weighted-average common shares outstanding:

Basic

Diluted

Long-term care insurance.

All references reflect amounts available to Genworth’s common stockholders.

This is a financial measure that is not calculated based on U.S. Generally Accepted Accounting Principles (GAAP). See the Use of Non-GAAP Measures section of this press release for additional information.

Risk-based capital ratio based on company action level for Genworth Life Insurance Company (GLIC) consolidated.

Company estimate for the third quarter of 2024 due to timing of the preparation and filing of the statutory financial statement filing(s).

Includes approximately $162 million and $95 million of advance cash payments from the company’s subsidiaries held for future obligations in the third and second quarters of 2024, respectively.

Reflects Genworth’s ownership of equity including accumulated other comprehensive income (loss) and excluding noncontrolling interests of $944 million, $894 million and $822 million in the third and second quarters of 2024 and the third quarter of 2023, respectively.

The Private Mortgage Insurer Eligibility Requirements (PMIERs) sufficiency ratio is calculated as available assets divided by required assets as defined within PMIERs.

Genworth’s principal U.S. life insurance companies: GLIC, Genworth Life and Annuity Insurance Company (GLAIC) and Genworth Life Insurance Company of New York (GLICNY).

Net gain from operations before dividends to policyholders, refunds to members and federal income taxes for GLIC, GLAIC and GLICNY, and before realized capital gains or (losses).

Holding company cash and liquid assets comprises assets held in Genworth Holdings, Inc. (the issuer of outstanding public debt) which is a wholly-owned subsidiary of Genworth Financial, Inc.

Net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests of $1 million for the three months ended June 30, 2024.

Changes in fair value of market risk benefits and associated hedges were adjusted to exclude changes in reserves, attributed fees and benefit payments of $(4) million and $(2) million for the three months ended September 30, 2024 and 2023, respectively, and $(2) million for the three months ended June 30, 2024.

(Gains) losses on early extinguishment of debt were net of the portion attributable to noncontrolling interests of $2 million for the three months ended June 30, 2024.