Genworth Financial, Inc. Q2 FY2025 earnings call

• Enact remains a key cash flow source, expects to return ~$400 million to shareholders in 2025, and Genworth has repurchased $630 million of shares. - Multiyear rate action program (MYRAP) for LTC secured $41 million of gross incremental premium approvals in Q2, with cumulative $31.6 billion in net present value achieved. - CareScout launched care plans, expanded Quality Network to all 50 states with ~650 home care providers, expects 2,850 matches in 2025, reentering LTC insurance market with new product approved in 29 states, targeting 30-35 states launch. - Favorable judgment in AXA/Santander litigation, court awarded ~$911 million, Genworth expects to recover ~$750 million if resolved favorably.

Genworth reported net income of $51 million in the quarter. Adjusted operating income was $68 million or $0.16 per share, driven by Enact contributing $141 million. The Long-Term Care Insurance segment had an adjusted operating loss of $37 million, with an unfavorable A2E of $42 million partially offset by a $26 million pretax gain from recapturing LTC policies. Life and Annuities had an adjusted operating loss of $7 million, with life insurance down $20 million (improved by lower mortality) and annuities up $13 million. Corporate and Other reported a $29 million loss, higher than prior year. Enact's primary insurance in-force grew 1% year-over-year to $270 billion, with $141 million in adjusted operating income, a $48 million pretax reserve release, and an estimated PMIERs sufficiency ratio of 165%.

• Enact to return ~$400 million to shareholders in 2025, Genworth expects ~$325 million from Enact. - Genworth now expects to allocate $100 million to $150 million to share repurchases in 2025. - CareScout Insurance reentering LTC market with new product, targeting approvals in 30-35 states before launch, and working on annuity hybrid product.

• Uncertainty around AXA/Santander litigation appeal process. - Volatility in investment portfolio, especially with alternatives. - Long-tail nature of LTC insurance liabilities, peak claim years still over a decade away.

Q: What's the process for the AXA/Santander litigation appeal?

A: Santander has until August 15 to seek permission from the Appellate Court; if granted, appeal could take 12-18 months.

Q: Thoughts on using AXA proceeds for spin-off?

A: Spin-off not viable currently as RemainCo (U.S. Life businesses, etc.) has no positive cash flow to support holding company.

Q: Possibility of common stock dividend?

A: Majority of shareholders prefer buybacks, but Board and management review on ongoing basis.

Q: Details on LTC recapture?

A: Arbitration with Blue Cross Blue Shield in Nebraska, onetime gain of $26 million from recapturing LTC policies.

Q: Where are new LTC products being written?

A: New Long-Term Care Insurance product is issued by CareScout Insurance Company, domiciled in Virginia, with 29 states approved, targeting 30-35 states launch, and worksite version filed with insurance compact.