Genworth Financial (GNW)

Tim Owens Vice President of Investor Relations
Tom McInerney President & Chief Executive Officer
Kelly Groh Chief Financial Officer
Ryan Krueger KBW
Tom Gallagher Evercore
Jimmy Bhullar JP Morgan
Alex Scott Goldman Sachs
Call transcript
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Good morning, ladies and gentlemen, and welcome to Genworth Financial's First Quarter 2019 Earnings Conference Call. My name is Kleena, and I will be your coordinator today. At this time, all participants are in listen-only mode.

We will facilitate a question-and-answer session towards the end of this conference call.

As a reminder, this conference is being recorded for replay purposes. you the using call. Q&A that or phones, ask during headsets portion we refrain cell from speakerphones Also, of today's would Investor turn Owens, to now over I Tim to the Vice Relations. presentation of President like Mr. Owens, proceed. you may

Tim Owens

thank Thank Genworth's for first everyone call. joining earnings you you, XXXX morning, operator. Good and quarter

all referenced were you release was website our followed posted supplement night. these Chief during call. our this encourage released of be We our press Financial review you Kelly by Chief Our from financial morning, Today In to to President and last Officer. Groh, our McInerney and Executive will our presentation materials. will earnings Tom Officer, hear and

comments, the will open-up prepared question-and-answer call our period. we a Following for

and to Investment will In addition to your our take speakers Officer; Sheehan, be Officer Dan Kevin available Operating Schneider, questions. Chief Chief

this During we various forward-looking make statements. may the call morning,

recent from results well our in And read regarding turn call CEO, the estimates cautionary to may notes finally, differ actual and exchange. Our our as the presentation And the are statements. discussion I'll please In release Also, XX-K non-GAAP morning's all materially investor Tom to timing foreign that of rules. the been financial you talk we factors the statements. of We investors. statutory required This the financial references meaningful release international filed note SEC includes in reconciled filing the earnings exclude more measures the due with risk earnings report about business to and annual McInerney. supplement, to have results of in non-GAAP related materials to statutory GAAP over maybe percentage statements advise forward-looking accordance such where impact SEC. the that also our on measures as results of now, our changes with as to we most believe Form our

Tom McInerney

a review you update the and quarter first on of our we results you transaction will call. against Genworth's and an with joining for Oceanwide. Today, our and thank execution strong with morning, Good provide priorities strategic

our $XXX a First, adjusted brief of per compared operating the diluted adjusted period. operating share or income $X.XX the per Genworth with In $X.XX prior-year diluted generated results. million million, review share first in income, of in $XXX or quarter,

by targets. foreign of adjusted capital above exchange well Australia, portfolio for excluding expenses. management XX% seasoning. the primarily operating a Canada's lower Our driven in ending and in the to quarter driven generated an ratio increase or revised in U.S. strong over $XXX to new of which its from NIW, drive market. grow adjusted requirements, global In billion share MI continue in mortgage the position insurance to quarter on higher declined year-over-year first capital overall year-over-year U.S. to with operating impact million in capital continued lower quarter effective $XX our operating XX% remains above earned written strong maintain foreign quarter and our first million, remains primarily force performance businesses $XX requirements premium adjusted favorable premium income strong income quarter impact on the to income business. became by MI U.S. U.S. premiums growth $XXX operating performance. PMIERs the insurance XX. and $X.X increased year-over-year the million, and In the the In first MI's insurance to as million with exchange our loss XX% growth result U.S. declined for excluding of due in ability Canada, In March

life performance quarter actuarially LTC as increases Genworth. and into of plan and annual to Achieving to as strategic as claims decades premiums expected rate severity XXXX. equity flow our terminations paid of Our flat favorable frequency. a were leverage Results claims strong actions, were and claims which the reductions priority through rate LTC remains insurance of the Life offset well Insurance by premium our LTC These experience justified significant million premiums also year-over-year. high loss are LTC reductions future. LTC our benefit to premium impacted Genworth's by force increases in higher our segment for new benefit intended provides less products as address recorded rate be $X higher an action are and result market first a over operating cash in lower Higher mortality higher with

$XXX has of approvals achieved XX%. impacting quarter annual a increases As million value shown of through in From approximately of state LTC on XX premiums, received first force of an the the Genworth billion rate XXXX $XX XXXX, on premium XX, in approved quarter average with present basis. net increase slide we premium first

completing me towards made to Let turn review now Oceanwide the the the progress of transaction.

insurance As and Fannie international other certain transfer China needs regulators have jurisdictions. previously actively engaged receive Mac and Freddie Genworth all they're announced, and necessary the our to the clearance received in Mae, regulators. funds state of Chinese from for approvals with U.S. conversion and Oceanwide currency Oceanwide relevant

we last obtaining our efforts towards months, the authorities. have approval Canadian regulatory focused Over from several the

approach are protection These their the regulators us identifiable Canadian we experience our information they reviewing data the review. that we been regulators have to security times mitigation. several this not which of complete similar additional been that in security informed and discussion regulators Since they any complex and centered the to in of agreed At Earlier enhanced proposed implementation Our information. met last given for safeguarding requests then with person around the information was or CFIUS. we the personally first matters, to has that questions. met part them mitigation program We've Canadian Canadian a what year, our important received needed our have design data the in in success the February. matter We regarding to provided information Canadian with answer with have significant additional them the we have connection time, to issues, and with clearance. their questions, regulators had national Canada have with proposed the including customers' CFIUS

agreed believe they have the Canada's to the earlier the to for for the from I merger that agreement Genworth to However, transaction review reviewers Oceanwide transaction. be the other relevant that with thank review of authorities have the We engaged provide extend time these and We transaction. fully Oceanwide to Genworth's to completion outlined this regulators April for to and the their continue continue process. To who have work final all already the it approved XXXX complex time a their Oceanwide's week transaction. we long of of and XXXX. Genworth should all transaction. and their a Canada has actively XX, parties through the the been announced of parties regulators stakeholders as time ongoing allow and and considerable frame want review. this of believe additional We not phase and XX, for recognize June adequate finish support patience

plan We $XXX $X.X XXXX agencies March of post-closing made and from Genworth's analysts, billion the the have of tranches the the capital questions maturities comfortably by these transaction, number the rating and closing in be scheduled a tranche first of capital discussions. Oceanwide capital the recognizing Insurance date the and Life to Genworth date XXXX. received of funding million cooperation Oceanwide in of the in contribution capital commitment Originally the of Oceanwide of GLIC the the plan investors, GLIC regarding XXXX. adjust $XXX ahead various XX, for all the and regulators commitment It the from importance and the debt first the plans $X.X Company We intention to million appreciate of Oceanwide's billion $X.X of the is tranche or were billion Holdings. regulators light Genworth of Genworth and Oceanwide later to

together the Finally, continues the I most transaction the value reaffirm Board against Oceanwide Genworth's possible. committed Genworth same and Genworth and overall transaction and fully as shareholders. At best the strategic to believe to soon our priorities improve and to that the as transaction work to continue certain positioning. Genworth to its execute represents the Oceanwide close want to remain time, continues we to

mortgage to U.S. and our in action our most rate LTC grow important plan. strengthen our to and through priorities are business Our earnings businesses Life capital build

will to Kelly. over call the I turn Now,

Kelly Groh

I Thanks, Oceanwide detail good cover our Today, levels capital around drivers, and on key morning, and company results Tom, with cash holding everyone. more in at updates will the financial our our and has extended. transaction flexibility first businesses quarter and as

of reported income net quarter's begin quarter operating the adjusted million for $XXX with million. income Let's and $XXX of an performance. financial We this

businesses insurance insurance and Canada in all strong mortgage U.S. in ratio well the mortgage loss with perform levels solid businesses. capital and performance the to Our continue

rate force Runoff with Our results business market life equity action term experience collectively and in and mortality were performance. good results, improved U.S. Life

businesses macroeconomic growth, insurance overall results stable markets coverage. to mortgage environment strong Our and housing price levels rate low provide unemployment continue levels home and interest and reflect in where most an trends including in generally we at mortgage economic insurance our steady solid

income ratio, reflected reported last adjusted strong loss first very mortgage of quarter. in million an operating X% $XXX Our U.S. business our insurance X% compared quarter to

on New reflecting basis, seasonality. a down were sequential the delinquencies quarter modestly for

net the The new up reflects purchase time quarter to continues This favorable written insurance versus well reaching was and force prior end We market of at U.S. versus grow good prior was first and of insurance also $XXX of versus cures trends. origination the all Overall the seasonality USMI billion last quarter year as strong down in aging. saw an persistency high XXXX. in year. levels flat and from as XX%

quarter new up X% written billion, the sequentially prior for year. X% or the Our was and insurance $X.X NIW versus

share our estimated market sequentially. USMI quarter first expect increase XXXX We to

based selectively to our participated good and adoption. successfully have and transactions GenRATE pricing rollout continued in engine, commitment proprietary forward seen have have risk We

We on to in manage an the to book expectation mid-teens return written. insurance the year overall continue new XXXX

Alberta sequentially from X on ratio a primarily ongoing loss and cures. is XX% originations the represents first targeted to versus origination The of are the lower reserves the and of Canada. Flow Canadian the on market year line in decreased of and average to smaller delinquencies, prior for year, on affordability prior ratio in new in expectations seasonally expectations. of higher from Atlantic X% XX% from XX% region of Turning and XXXX larger points loss quarter's an in in quarter resulting the X points a from delinquencies, Canada's primarily cities. prior increase the decrease net with NIW year lower performance from pressure XX% the for Canada remainder those

points line Moving in in year. premiums loss loss the Australia's quarter IFRS seasonally to quarterly U.S. lower the to the of XX% of the current the ratio cures, full earned net up the from X versus ratio traditionally of in the and experienced Australia. prior up year, expectations X loss of The higher the XX%, was was quarter. of prior year first GAAP basis, considering first versus XX% points delinquencies, from new half mostly quarter in delinquencies quarter XX%, seasonal XXXX with for the pattern accounting higher of the ratio On

a in from XX% up market, Our primarily Flow versus the prior were seasonally lender higher levels versus quarter, New activity smaller prior the certain year, origination business from from mortgage down Australia origination customers. X% and

with life in mortality results I distinct through. equity rate plus first performance. will care, the tend in although, to of terminations a U.S. items I by in As favorable, our in consistent and offset were within as life less of first terminations long-term good half long-term the couple experience mentioned, year, half seasonal the In term were care, sequentially terminations were in-force by quarter, still were results last the of These claim results expectations. the see which runoff, terminations action go driven our to lower partially patterns year. first our in is quarter and generally Compared of claim higher range market segment year higher we second

spend prior assumptions utilization we or rate We financials. the actions better for incremental did quarter, discussing offset page impact released quarter. higher a quarter as to from year, prior versus LTC The the claim this did minute but versus benefits XXXX reported, and benefit of the do expense I of overall the prior of updated fourth LTC IBNR, will severity morning. following expect on that deck the see financial periods versus XX Investor the to claims sequentially and rate incurred their new the which want during in-force were our continue. not New reflect an actions illustrated

our good very Based this in-force in regulators net approving amounts ours. margin were anticipated of focus actuarial action see under results value a rate in basis XXXX. continue for on actions and action and We testing requests. our with be last updated approved future assumptions approximately justified multi-year most actuarially to been year's to billion present line have These estimated used a of continue late rate we rate have will plan in need the assumptions $X margin approval on in testing, that been

a Our large approximately were first $X basis states value XXXX. of of of quarter approvals on the present billion remaining couple from as $XXX net a year-end million

see obtain justified insurance years recognized have of in Our and premium assumptions. multi-year rate immediately based regulators risk-based remaining purposes. premium This we with We increases declining increases will is the income on action may fully it previously in the claims timing and to in implementation continuing on on are these take benefits and variability timing the between any plan plan and approvals a LTC capital actuarially and given reserve increases reserves updated future mismatch if actions. realized offsetting implementation mismatch benefits to considers reserve timing reserve with the we strengthening we the our claim approximately assumes and statutory and creates results until match the statutory we statutory better increase accounting future the seek required, ratios, to time XX To-date, quarter for approved. Therefore financials. this accounting, implement discuss for the may lag rate rate reflected in actions phase-in experience,

results quarter Universal income claims deferred drove life of after the the also which Mortality last in model improved quarter Results in Higher and versus updates Life, and tax, and year, increased investments Turning totaling included quarter also than to $XX due to life primarily last limited year. million actuarial insurance. variable partnership was primarily acquisition lower both last lower and last amortization term severity. costs.

the with UL lower our we term several for also impacted continues life years. While mortality accounting be term trend periods, primarily under last mortality price post-level have their that costs large standards. quarter, higher lower and blocks the level premium for which want and given accelerated to lapses, assumptions the of life than deferred entering current associated higher from locked-in this upon business and amortization seen the acquisition XX-year over term out I was assumptions of to lapse, XX-year insurance life results in premiums point premium

block we period. business of its saw We versus in in of expect this associated the reserves annuities, the level trend premium a products, the immediate loss term annuity to to quarter fixed XXXX an XX-year related indexed turnover as supporting accelerate by and million reduction of $XX quarter. favorable fixed reaches mainly driven in larger our end in quarter the recognition investment written mortality premium improvement also and In charge XXXX sequential Results to annuities reflected portfolio. level prior This was prior the interest offset more than a year. rates market with equity from by the after-tax premium single lower in

for Intangible than related the provision period quarter will of Corporate GILTI the the the which or expense Low-Taxed GILTI Jobs Other was and in acronym $XX $XX the due to to prior a I mainly the to Cuts million of million refer as XXXX Act. Global segment loss Tax Our Income and higher

We the rules. interpretations based expense have on calculated GILTI current of our the

years, utilizing due rate guidance effective impact law. The is operating is However these as net U.S. life rules, losses new U.S. net in an to and area taxable taxable in XXXX forward not be between cash but foreign expected U.S. to losses loss expect on our our forwards further to or future in GILTI is carry having interaction do continue in projected of has to return tax We interpretations businesses. after may tax positive credit through years. this we business. result assuming rate income GILTI payments to the projected in operating tax reduced issued the to impact of effective carry tax XXXX, significant future change utilization on the

also tax smooth recognized tax by year. to and attempts This financial during The quarter. in driven of the by income level difference end of APB overall segment We capital timing will XX the your million expense recorded of on by $XX net requirements reverse the Corporate rate reporting gains the quarter. Other additional interim the

move an strong the or target year positions. insurer last Financial assets. year eligibility business, requirements reported These XXX% where In the to XXX% by last our above Adequacy the capital no a became Note businesses with XXX%. for for mortgage our the well guidelines had MICAT I'll required a January mortgage the finalized saw were and Federal finalized range to ratio of continues quarter PMIER significant mortgage continue private XXXX. maintain of Finance we In Superintendent Now operating which to levels Test MI capital quarter the estimated new the XXX% Housing capital the above updates reporting. company's Mortgage Agency, of late of impact Insurer we to Late which effective insurance the very remain standard reflect is our $XXX Capital effective quarter first Canadian Office which in USMI, does X, OSFI ratio of FHFA Canada Institutions updates insurers excess of revised XXXX to finished which this capital in or sufficiency more than or ratio. million on

CADXXX our XXXX million ordinary rates not execute any to and extraordinary and CADXXX during capital million did are to $XX approximately redeployment translates capital range While dividends the million. activities that million their million to quarter foreign between $XXX company Canada current to to $XXX At holding exchange deployment expectations for beyond extraordinary their USMI. million approximately $XX

ratio XXX%, their of a continued of repurchase end profitability which of Capital range ratio management million last focus capital to million up biannual above last of estimated XXX% of Prescribed an with seasoning quarter XXX%. given initiative Australia's the dividend PCA in the was or the force of ordinary approximately AUDXXX The portfolio its target ended announced position. increase share payment from quarter. high Amount and AUDXXX optimization Australia's capital is a reflected business execution MI by business remains quarter the for in Australia capital Capital offset XXX% portion excess and which Our

statutory XXX the during the recently held at of consider Capital $XX of fact the first products total from a action Annual the in approximately year-end. claims to quarter May at proceeds repurchases Holding million reflects announced net will an be $XX subsidiaries which The million future resolution GLIC received in Australia Life Genworth shares and from at to non-LTC including shareholders Insurance of LTC. in This share put company intermediate over of by company has from million insurance buybacks company's In proceeds in at a international Genworth buyback statutory ongoing quarter level RBC. General period. combined growth in losses up ratio or holding Meeting possible approve Company and mortgage to Company XXX% Canada and next dividends offset our XX-month that our ended were profits

of discussed, entire LTC pressure. I rate some be claims will implemented which offset benefits plan action the will multiyear the the As help of time over

as authorized are for is with amounts twice basis primarily XXX% Said The plan purposes. on take Tom on for a to clarify questions basis regulator we've another RBC, compliance which required company or discuss is improvement that same the This now to would GLIC of which on basis. generally to XXX% investors regulator. context Given our that of we must or approximately a is When historical the way million basis level of levels wanted assets assets approximately with want ACL a RBC at certain reflects file XXX% XXX% required I whether required action breached or remind it the point to number received from negative assets company used understand to regulatory in these levels a of a level action trend would our test filed in level action a plan RBC part RBC, two first test relevant will domiciliary points. thresholds. of of and have level risk-based the loss the control for the regarding transaction authorized assets our as earlier basis levels. required its action minimum contribute discuss of few other control timing a negative a Oceanwide. level company a is RBC I and times agreement level of the capital company of with action at of closing the action date be tranches also The apply. words the if before moment The those a percentage in an trying be Delaware proposed a the three contribution need times investors tranche the the looks None I Oceanwide transaction, with with one-time companies the to regulators. rules to loss or special with with ACL breach that level $XXX company Genworth or trend the with remaining the transaction GLIC upon to commitment consistent agreed of the made GLIC conjunction

$X.X indicated of have statutory to in life life on justified standalone obligations. manage rate satisfy of their billion, capital actuarially our is it to businesses U.S. force in no blocks, consolidated policyholder actions The with rely capital these approximately infuse plans we to prudent will on As businesses. U.S. future the management intention entities and the basis a previously,

$XXX Moving $XXX to last over over ended company, the holding to with quarter. million as the million cash liquid quarter in just slightly compared we assets and

cash Our million service below two current times forward $XXX is debt level approximately targeted our buffer.

the first total interest during We this of interest $XX are quarter. payments of additional proceeds the our in third given the interest debt net the from $XX sourced the Intercompany million. share collateral posted that cash primarily payments the payments. were first moved million semiannual lower of rates tax million quarters repurchases and during hybrid higher quarter. dividends and $XX to timing swaps million rate on as holding were of $XX Offsetting to company were quarter, company holding also the During

quarter the quarters items $XX expenses first are employee benefit the in of also included throughout replenished in businesses which certain higher that trend mostly the other million by We remaining the and had year.

billion discuss of are we We capital of company continue with upcoming mindful obligations. closing of the light the delay $X.X in and plan the our the holding the and Oceanwide of to transaction regulators timing

well-capitalized June unsecured In key dividends on operational intercompany will in other and contribution sum insurance near-term maturing mortgage XXXX. help these the include $XXX other strategic items. the U.S. due life businesses. holding XXXX, for with in company debt from the insurance remain capital addition our we subsidiaries up rate $XXX through stabilize to obligations plan in be things progress holding commitment to approximately LTC The of Oceanwide intended note To of from existing $XXX actions the million and the to along million million our addressing March GLIC improve our quarter, action company focused cash and including and

capital Our that, levels. execute solid it mortgage open are and insurance let's businesses and on very continue up strong with With earnings for well to performing priorities their questions.


portion the the question begin and call. [Operator from Ryan comes Krueger gentlemen, now Ladies will we KBW. first Q&A Our from of Instructions]

Ryan Krueger

good morning. Hi

started? about in you First February? had them the early since Canadian just Canada, can review on contact any you met have you when with talk And

Tom McInerney

mean of in after Ryan. so with Thanks signed I October signed obviously for XXXX. we we Canada the the filed originally question deal shortly we

the did the filings Form we I think XXXX. year there in end of A

contingency a Of update. Oceanwide. is Delaware CFIUS changes there some by refilled the been There have We plan there plan deal a from to capital, course, changes the are with along way.

along it their at has perspective from look could the way. you the So changed that deal

used mitigation it's a we they like So in significant has of I lot it. time more CFIUS different -- and to of advantages and we with January and spent that started significant think one -- also have discussions the complex is pieces Canada we plan in we

with several last we understanding February. are early haven't time really finish will And they review. reviewing information they so the discussions there have I was the frame mentioned the they filing they as that had have different What And them, said the agencies meetings plan Unfortunately, need. us my several all when a for they are and given mitigation is the overall.

Ryan Krueger

you there then merger of second And towards assets are in any can within requirements approvals are in conditions to and or any agreement, China any us the the or accounts? Oceanwide's specifics required of hold the financial -- regulatory they of Thanks. was Okay. remind question just any terms sort escrow

Tom McInerney

other and are as none those by requirements. lead China have regulator and all will submitted is year-end There when us with very it's coordinating have they're transaction. those Virginia of the where They've all Richmond convenient based with us. of I'm goes we we in approved so here No. are Oceanwide and Obviously, the the they're supportive Virginia to those sure they're XXXX our on for financials very Clearly, regulators. regulators been time of all course finished they discussions. and it. be has to

keeping regulatory to also perspective. work them an closes, new continue sort And of so with all course. is Virginia deal The coordinating the all normal overall with there review are that's the no the regulators specific to That's they'll But information. up-to-date we teams until of obviously. regulators our in addition -- new anything and our requirements from

Ryan Krueger

about I question guess liquid of they purchase to similar in excess do have currently price? but assets guess China I -- Does Oceanwide, the

Tom McInerney

the -- resources. Delaware hearing a financial part of on the So focus in significant hearing Ryan of they China the was Oceanwide

Oceanwide And all the part assets significant as cash. so so by financial China We they plus all representatives have regulators been through as and the went they and doing obviously of own filings updated diligence due they have that. -- our with

price recall you with have we once offshore. a that from plan. the we is will ago as that up versus still challenges contingent Mainland has way think year of the China on or along the much so Oceanwide And and come worked wrap the can Chinese the we China of assets that -- ultimately Canada of one -- I or regulators have is One to purchase how decide

think plan currency China both of Genworth on so comes how out conversion of a and the of Oceanwide the So feel have the terms funding. worked we I and in that comfortable save regardless very

our both have original We plan.

excess the in the limit we and China. put from But We a have that. contingent excess -- if plan proceeds a coming if all assets also China we have regulators of cash in the on

Oceanwide $X.X are capital both to billion that So Genworth than within both -- assets very and we feel also there fund is $X.X transaction plan. to the that are billion adequate comfortable the and the more and fund China outside

Ryan Krueger

Okay. you. Thank


[Operator next Evercore. comes Please Instructions] ahead. Tom Gallagher from go The from question

Tom Gallagher

to on you're long-term potential meaningful immediate comment versus RBC? the like going the benefits you'd if right gross more truly it lag the Good particularly a seeing strengthening permit what think care down given contingency do timing just able impact that the I regulators time its And just rate morning. a there to between Kelly would reserves. a of you a if to is now, a issue? there anticipate practice, see approvals you your is, -- RBC guess for potentially think on and be Based file you a plan

Kelly Groh

for question, and morning. Thanks Tom the good

I think a it's question. great

the actions putting run into But it facts file claim started depends will and to circumstances as continually over then levels. a practices average the GE very We our that first time talk over large implement quarter, multiyear look on consider had of capital those certain are time. on what period their horizon. It at we we risk-based with done our higher rate associated Permit time we and and time. saw to things in at you the that increase to take higher would in a that regulators up to to the claims -- are forecast similar operating plans we

of a our where forecast shows submit forecast, now, right plan it would our regarding with regulators. us to don't that a Now going into have require action scenario us we a

our our So, would does that. regulators, but with continue currently to forecast we not show it is a have discussion

Tom Gallagher

talk And of kind what Was up you Thanks. just topic, you back was if you the kind didn't the bit severity claims? saw It think -- there to change Can filing, in the then, same percentage what it about XXXX severity was of much. frequency change in too trend at quantify your I I quarter? and first on Okay. of long-term terms? can meaningful a that care terms a change in in was increase frequency both look teens. all

Kelly Groh

that Tom, not that from front me have in information could on at to to there's get and level a look I be of that, we'll be to also so that that whether what now. XX-Q would right we in out if of one. granularity. investors back that anything evaluate happy our adequate or We figure when meaningful you file gain don't have We'd there's can

Tom Gallagher

you've Okay. been Great. And having to rate relates just clearly increases, then, as success it more there. the

-- can a you year talk less at little about to the rate XXXX what's XX% states? XXXX, little If bit a with now average. it XX% XX%, Is start going now you you on are was through? at And you that because Is -- in you're weighted where we increase rate than there that and seeing look Or coming are increases expect to would rate level of seeing for trend across-the-board higher states are bottlenecks increases occurring? some go? grading that weren't the the just that actually

Tom McInerney

XX the the think jurisdictions five of District that's John, a do every XXXX increases, Columbia, I any complex and you state somewhat if so XXXX of I difficult it's differently. states. look years it and type from So, from the the great receiving think it increases was -- does large back six or and triple-digit over last question, because question a

I think changed. that has

and would said And all has I think with where are significantly forms of increases. would that XXX% cumulative our insurers' care premium in regulators, states I the blocks stepping for of years up those six and say inflation think that policies over lot X% and we unlimited years XX problematic protection to the the five XXX% to and regulators I policy giving there information are significant perspective and increases. other last over I doing provided or a justified the of all there needs that well think from Genworth been other actuarially compound significant of some premium the type have I and recognize legacy past XX so increases generally coverage insurers say who really that we've and long-term need number most on legacy perspective increases. have are

has you that look and you behind. We're states, XX present net it's if states we're original at target at are our value that There billion. quarter the look $XX end now are to around at at if And of XX two-thirds those average first some cumulative pretty $XX.X grown, in shape. of so, versus but the the from billion good

the I majority think -- that the few believe in Genworth states And coming there is and so, behind. are states in of to states there that are from I do those against do then to some premium the behind. among and states pressure are industry is, that and giving one along are of that far have other challenges other states companies there the And increases XX are very very significant well

large that a states the And really out in now see, you all ways so, And homogeneity we've But have is will have was I how your we for that of my the do different. come are basis that and Everyone terms actuarially the have cases think increases some no to NAIC, that don't I somewhat across think needed granting from I and regulators of premium there's received have in more up. these they in all I right to, perspective, do catch increases figure the question think it. consistent increases that states hypothesis think lately are ultimately and some justified.

fellow I so managing think they job of have good more some to this. do, put and along need terms great states I are in think to commissioners more. on And their to they've and a pretty shape more regulators pressure way, have they done more but that I And really in think the been step-up do

hopefully so, we'll that. see And

Tom Gallagher

That’s helpful. Thanks, Tom.


from ahead. comes Jimmy JPMorgan. next The go question Bhullar Instructions] Please [Operator from

Jimmy Bhullar

morning. you the of date there I topic. late, a possibility ask of toward to I the obtained? re-seek acquisition the need to approval way there and you merger sort covered sort joined continues you the an know process this which that for regulators there can if go the talk you've to so delayed, certain call So about continues don't at if or that point? beyond approval Hi, is point But get a already expiration there's a good if might is a restart to the you approval process is

Tom McInerney

regulator has been hasn't with come up. regulators. we on team specific there you is has focused the joined Jimmy, discussions that I question all have a that regulators. that's have but coordinating good led Bob What the specific deal, a the before deal that by all lead the Virginia have our and approved And questions question, it's would we a and progress, General or who with Counsel say

all we to kept up really regulators the think I speed. So

approved those not provide XXXX have the we them that statements the then of available update Oceanwide deal May very their regulators companies approved we would remain we the transaction. expectation submit of we'll I public see Obviously, financials Obviously, way. the supportive release think you regulators sometime And of the those. that I -- have in along think so if quarter some financial who've the those. I will we other my undoing be and in each become any file will. already that But approval, do that

of in that good think have go Canada fortunate. We learned of had the of just they'll plans. continue we in to it including broad that something we've the It's on Canada CFIUS think mitigation process previous I time. a In experience CFIUS. not I the so passage new. these that to really Canada, but model any is takes information time were regulators, the we it's case question, the these new through now discussed on see in And very with and to want focus

strong was plan. that think good mitigation a I very

we again they them So to the already they to that enough had they that's basis had of Canada we still regulators Canada. I needed is that us be was should And it in left, time We've are deal. that early gone XX, said we've that very that forth and that's it's think to them back June with February. approved transaction. the earlier that for other What At the on process. the think Obviously, and with we I the review meeting really used. last supportive call told time their and the finish the extended have information

Jimmy Bhullar

transaction? going you to in, with money the that on financing you And then any think Oceanwide do have there's it? they're any sitting share I how have account views can but an escrow finance you insight the don't for on

Tom McInerney


did up good that before. So question It's come question. a

both China in done China Oceanwide excess on all funding, process Oceanwide is and and diligence capital So that the Mainland, the and there due China cash significant have has. and the regulators Genworth within

have a year China. extent the other conversion amount safe plan come Several outside -- did and currency that financing does to As Mainland, you that plan know, of as we the this with capital about a a ago, I've talked maybe up well before. even China. of months within as limits contingent cash ultimately ago Oceanwide contingency that has

shape prepared capital that's the deal and to provide So $X.X due have purchase deal capital plan we move outside also believe billion, billion and the we the to is the that approvals they of once price closing. funded the only in over adequate close cash post from not being but that that $X.X the forward time is Oceanwide terms whether final primarily of under or China from the Canada good in contingency very get

Jimmy Bhullar

Okay. Thank luck. Good you.

Tom McInerney

you Thank Jimmy.


ahead. from Alex Sachs. The next question Goldman from Please Scott go is

Alex Scott

regulators some, long-term Hi. on I had guidance enhanced got I just I XXXX. XX guess, that through actuarial process. in the interested know on a just that quick you was care. I'd for year-end had be issued that one any disclosure the feedback

was there focus think curves. on specifically incidence I assumptions morbidity a more and

in of I interested how you through got So industry if would that color any some to compared those of assumptions be the are process? and terms

Kelly Groh

for question Thanks Alex. the

deviation. compliant and like of XX cash experience, and All regulators methodically feel testing having the with appropriate that discussions. those are think adverse very We looking our carriers are recently think submitted of memorandum, based the their and I through our all on methods flow for guideline we're and I with actuarial very supportable conversations ongoing. all that just provisions are

Alex Scott

you. Thank All right.


signals. As McInerney. there question your host no back turn I now to Mr. further will are call the

Tom McInerney

of are much Genworth the Oceanwide continued as expected. and been call and time than the working transaction interest we all today. hard for We be and the and very as us thank recognize that please But that on to possible. investment appreciate frustrating, your very to you Oceanwide obviously very assured soon Thank thanks approval transaction any much of And morning. taken your you this close being longer you in questions process it's And has and very Kleena, Genworth. for


call. That your participation, will ladies today's Thank you gentlemen. for conclude and

You disconnect. may now