Genworth Financial Announces Third Quarter 2012 Results

           Genworth Financial Announces Third Quarter 2012 Results

Net Operating Income Increases To $121 Million

U.S. Mortgage Insurance Incurred Losses Flat Sequentially

$136 Million Dividends Paid From Operating Companies To Holding Company

U.S. Life Companies Seek To Complete Second Life Block Transaction In Fourth
Quarter 2012

PR Newswire

RICHMOND, Va., Oct. 30, 2012

RICHMOND, Va., Oct. 30, 2012 /PRNewswire/ --Genworth Financial, Inc. (NYSE:
GNW) today reported results for the third quarter of 2012. The company
reported net income^1 of $34 million, or $0.07 per diluted share, compared
with a net loss of $16 million, or $0.03 per diluted share, in the third
quarter of 2011. Net operating income^2 for the third quarter of 2012 was $121
million, or $0.25 per diluted share, compared with net operating income of $62
million, or $0.13 per diluted share, in the third quarter of 2011.

"Steady improvement in our operatingresults in the Global Mortgage Insurance
Division and stable underlying performance in the Insurance and Wealth
Management Division increased total net operating income both year over year
and sequentially again this quarter. Dividends continue to provide liquidity
to the holding company," said Martin P. Klein, acting chief executive officer
and chief financial officer. "We are committed to improving business
performance and generating capital as we rebuild shareholder value."



Consolidated Net Income (Loss) &
Net Operating Income
                                           Three months ended September 30
                                           (Unaudited)
                                           2012              2011
                                                    Per               Per
                                           Total    diluted  Total    diluted
(Amounts in millions, except per share)             share             share
Net income (loss)                          $ 34     $  0.07  $ (16)   $ (0.03)
Net operating income                       $ 121    $  0.25  $ 62     $ 0.13
Weighted average diluted shares              493.9             490.8
Book value per share                       $ 33.40           $ 30.09
Book value per share, excluding
accumulated
    other comprehensive income (loss)      $ 22.78           $ 22.15

Net investment losses, net of tax and other adjustments, were $1 million in
the quarter compared to $78 million in the prior year.

During the third quarter of 2012, the company completed its annual goodwill
impairment analysis. As a result of the impact of the continued challenging
economic environment in Europe on the analysis, the company recorded an
after-tax goodwill impairment of all of the goodwill related to the
International Protection segment of $86million. There were no other charges
to income as a result of the annual goodwill impairment testing.

In the third quarter of 2012, the company revised its definition of net
operating income (loss) available to Genworth Financial, Inc.'s common
stockholders to exclude goodwill impairments to better reflect the basis on
which the performance of its business is internally assessed and to reflect
management's opinion that it is not indicative of overall operating trends.
All prior periods presented have been re-presented to reflect this new
definition.

Net operating income (loss) results are summarized in the table below:

Net Operating Income (Loss)
(Amounts in millions)                            Q3 12   Q2 12   Q3 11
Insurance and Wealth Management Division:
 U.S. Life Insurance                             $ 86    $ 64    $ 102
 International Protection                          8       3       22
 Wealth Management                                 10      12      12
 Total Insurance and Wealth Management Division    104     79      136
Global Mortgage Insurance Division:
 International Mortgage Insurance                  94      76      68
 U.S. Mortgage Insurance (U.S. MI)                 (38)    (25)    (79)
 Total Global Mortgage Insurance Division          56      51      (11)
Corporate and Runoff Division:
 Runoff                                            9       (6)     (7)
 Corporate and Other                               (48)    (44)    (56)
 Total Corporate and Runoff Division               (39)    (50)    (63)

Net operating income (loss) excludes net investment gains (losses), goodwill
impairments, gains (losses) on the sale of businesses and other adjustments,
net of taxes. A reconciliation of net operating income (loss) of segments and
Corporate and Other activities to net income (loss) is included at the end of
this press release.

Unless specifically noted in the discussion of results for the International
Protection and International Mortgage Insurance segments, references to
percentage changes exclude the impact of foreign exchange. Percentage changes,
which include the impact of foreign exchange, are found in a table at the end
of this press release. The impact of foreign exchange on net operating income
in the third quarter of 2012 was an $8 million unfavorable impact versus the
prior year and a $2 million unfavorable impact versus the prior quarter.

Insurance and Wealth Management Division

Insurance and Wealth Management Division net operating income was $104
million, compared with $79 million in the prior quarter and $136 million a
year ago.

Insurance and Wealth Management Division
Net Operating Income
(Amounts in millions)                  Q3 12  Q2 12  Q3 11
U.S. Life Insurance
            Life Insurance             $ 22   $  30  $ 64
            Long Term Care               45      14    17
            Fixed Annuities              19      20    21
Total U.S. Life Insurance                86      64    102
International Protection                 8       3     22
Wealth Management                        10      12    12
Total Insurance and Wealth Management  $ 104  $  79  $ 136

Sales^3

(Amounts in millions)     Q3 12    Q2 12    Q3 11
U.S. Life Insurance
  Life Insurance
    Term Life             $ 1      $ —      $ 1
    Term Universal Life     19       32       33
    Universal Life          15       19       14
    Linked Benefits         3        3        2
  Long Term Care
    Individual              63       53       54
    Group                   6        7        —
  Fixed Annuities           487      336      495
International Protection    366      417      438
Wealth Management
  Gross Flows               1,099    1,228    1,565
  Net Flows                 (254)    (245)    446

Assets Under Management^4

(Amounts in millions)  Q3 12     Q2 12     Q3 11
Fixed Annuities        $ 18,677  $ 18,437  $ 18,366
Wealth Management        22,633    22,320    24,613

U.S. Life Insurance Segment

Highlights

  oU.S. Life Insurance segment net operating income increased sequentially to
    $86 million and was down from $102 million in the prior year.
  oEffective October 22, 2012, the company announced changes to its life
    insurance portfolio designed to update and expand its product offerings
    and further adjust pricing to reflect the current low interest rate market
    environment and recent regulatory changes affecting reserve requirements.
    The company is launching a new traditional term life insurance product
    which will replace Colony Term Universal Life. In addition, the company is
    streamlining its guaranteed universal life insurance portfolio and
    repricing GenGuard UL.
  oThe consolidated risk-based capital (RBC) ratio is estimated to be
    approximately 420 percent^^5, up from 405 percent at the end of the second
    quarter of 2012 from favorable taxes and positive statutory income,
    partially offset by an extraordinary cash dividend of $50 million which
    was paid to the holding company, bringing the year-to-date dividends from
    the proceeds from the 2011 sale of the Medicare supplement business to
    $150 million.
  oThe company seeks to complete its second life block transaction in the
    fourth quarter of 2012. The transaction is expected to generate in excess
    of $100 million in initial after-tax capital benefits for the U.S. life
    insurance companies and will be recorded in the statutory results in the
    fourth quarter of 2012 and a GAAP net loss of $6 million was recorded in
    the current quarter.

Life insurance net operating income was $22 million, compared with $30 million
in the prior quarter and $64 million in the prior year. Results in the quarter
included a $9 million unfavorable impact from the unlocking of interest
assumptions impacting reserves and deferred acquisition costs (DAC) and a $6
million unfavorable impact from the company's anticipated second life block
transaction. Unfavorable mortality versus the prior quarter was more than
offset by new business performance and some improved in force margins.
Mortality was also $14 million unfavorable versus the prior year primarily
related to the term life insurance product. Prior year results included a $16
million after-tax gain from the selective repurchase of notes secured by
non-recourse funding. Sales were down $16 million versus the prior quarter and
$12 million versus the prior year reflecting the pricing and product actions
taken this year. The company continues to utilize reinsurance in life
insurance as part of its capital management.

Long term care net operating income was $45 million, compared with $14 million
in the prior quarter and $17 million in the prior year. The current quarter
included $29 million of favorable reserve adjustments primarily from the
continuation of a multi-stage system conversion. As part of the adjustments,
the company completed a comprehensive claims analysis and update of its claim
reserving methodology which had a $2 million after-tax impact on total claim
reserves. Excluding the current year reserve adjustments, the loss ratio in
the quarter was flat to the prior quarter and increased three points from the
prior year to 74 percent. Claim termination rates were favorable versus the
prior quarter from higher mortality and recoveries, offset in part by a higher
average reserve cost on new claims.

Individual long term care sales increased to $63 million during the quarter
from accelerated sales in advance of pricing and portfolio actions announced
in July 2012. Sales levels are expected to moderate in the fourth quarter of
2012. The company continues to utilize reinsurance in long term care insurance
as part of its capital management.

The previously announced premium rate increase of 18 percent on the majority
of older issued policies has been substantially implemented. As of September
30, 2012, the company had received approvals for these price increases in 45
states, representing approximately 80 percent of the targeted premiums.

In the third quarter of 2012, the company initiated a new round of long term
care in force premium rate increases with the goal of achieving an average
premium increase in excess of 50 percent on the older generation policies and
an average premium increase in excess of 25 percent on an earlier series of
new generation policies over the next five years. These premium rate increases
are designed to mitigate losses on the older generation and, on the earlier
series of the newer generation which has generated positive operating earnings
to date, help offset lower than priced-for returns due to lower interest
rates, unfavorable business mix and lower lapse rates than expected. Subject
to regulatory approval, this premium rate increase would generate
approximately $200 to $300 million of additional annual premiums and other
benefits when fully implemented. As of October 26, 2012, this round of rate
action has been recentlyfiled in 18 states and the company has approvals from
2 states.

Fixed annuities net operating income was $19 million, compared with $20
million in the prior quarter and $21 million in the prior year. The results in
the prior year included a $5 million unfavorable DAC unlocking primarily
related to declining spreads as well as more favorable investment income and
favorable mortality in the single premium immediate annuity product line.
Sales in the quarter totaled $487 million and were up sequentially, but down
from the prior year as the company continues to maintain margins to meet or
exceed targeted returns in the low interest rate environment.

International Protection Segment

Highlights

  oReported net operating income was $8 million, compared with $3 million in
    the prior quarter and $22 million in the prior year.
  oThe reported loss ratio decreased six points from the prior quarter and
    increased one point from the prior year to 18 percent and the underwriting
    margin^^6 increased seven points from the prior quarter and decreased
    three points from the prior year to 20 percent. 
  oThe regulatory capital ratio decreased 12 points to 359 percent^5, well in
    excess of regulatory requirements, as the business paid a $56 million
    dividend to the holding company during the quarter.
  oDuring the third quarter of 2012, the company completed its annual
    goodwill impairment analysis. As a result of the impact of the continued
    challenging economic environment in Europe on the analysis, the company
    recorded an after-tax goodwill impairment of all of the goodwill related
    to the International Protection segment of $86million.

International Protection earnings increased $5 million sequentially and
decreased $14 million from the prior year. New claim registrations were down
versus both the prior year and prior quarter, but the underwriting margin
versus the prior year was impacted by the higher loss ratio and an unfavorable
shift in the mix of contracts with profit sharing as well as slowing sales. In
light of the continued slow consumer lending environment in Europe, additional
actions are being taken to reduce expenses and improve margins. Sales
decreased seven percent^^7 versus the prior quarter and one percent^7 versus
the prior year as Northern Europe performed stronger than Southern Europe. New
claim registrations in Europe decreased 18 percent versus the prior quarter
and six percent versus the prior year. At quarter end, the lifestyle
protection business had a regulatory capital ratio of approximately 359
percent^5. 

Wealth Management Segment

Highlights

  oNet operating income was $10 million, compared with $12 million in both
    the prior quarter and the prior year.
  oIn July 2012, the company expanded its investment platform for independent
    financial advisors in response to the current market environment and
    investor needs by adding eight new strategies. These changes address
    challenges faced by financial advisors and their clients such as advisor
    demand for income generation in a low yield environment and demographic
    demand for generational shift from accumulation to spending and
    distributing income.
  oDividends of $30 million were paid to the holding company through
    September 30, 2012.

Wealth Management net operating income was $10 million, compared with $12
million in both the prior quarter and the prior year. Net operating income in
the prior year included approximately $1 million for Genworth Financial
Investment Services (GFIS) which was sold on April 2, 2012. Assets under
management (AUM) increased sequentially to $22.6 billion as positive market
conditions impacted AUM by $567 million. Net flows for the quarter were
negative $254 million, primarily related to relative investment performance.
Margins^8 as a percentage of average AUM increased nominally from the prior
year. As of the end of the quarter, total advisors with assets on the platform
were approximately 6,340.

Global Mortgage Insurance Division

Global Mortgage Insurance Division had net operating income of $56 million,
compared with net operating income of $51 million in the prior quarter and a
net operating loss of $11 million a year ago.



Global Mortgage Insurance Division
Net Operating Income (Loss)
(Amounts in millions)                   Q3 12   Q2 12   Q3 11
International Mortgage Insurance
             Canada                     $ 42    $ 41    $ 40
             Australia                    57      44      36
             Other Countries              (5)     (9)     (8)
Total International Mortgage Insurance    94      76      68
U.S. Mortgage Insurance                   (38)    (25)    (79)
Total Global Mortgage Insurance         $ 56    $ 51    $ (11)



Sales
(Amounts in billions)             Q3 12  Q2 12   Q3 11
International Mortgage Insurance
       Flow
             Canada               $ 7.2  $ 5.7   $ 6.8
             Australia              8.8    8.2     7.1
             Other Countries        0.4    0.5     0.5
       Bulk
             Canada                 2.6    13.1    0.6
             Australia              —      0.3     0.1
             Other Countries        —      —       0.3
U.S. Mortgage Insurance
       Primary Flow                 4.7    3.6     2.7
       Primary Bulk                 —      —       —



International Mortgage Insurance Segment

Highlights

  oReported International Mortgage Insurance segment operating earnings were
    $94 million, compared with $76 million in the prior quarter and $68
    million a year ago.
  oCanada operating earnings of $42 million were up from $41 million in the
    prior quarter and $40 million in the prior year. The loss ratio was 30
    percent, down two points sequentially. 
  oAustralia operating earnings of $57 million were up from $44 million in
    the prior quarter and $36 million in the prior year. Results in the prior
    year included an unfavorable tax charge of $16 million attributable to
    changes in uncertain tax positions associated with the company's initial
    public offering in 2004. Results in the current quarter improved versus
    the prior quarter as new delinquencies were down across all major states
    and from favorable taxes. The loss ratio in the current quarter was 47
    percent, down from 54 percent in the prior quarter.
  oOther Countries had a net operating loss of $5 million, an improvement of
    $4 million over the prior quarter from lower loss development.
  oIn Canada, flow new insurance written (NIW) was up 28 percent^7
    sequentially from seasonal variation and up 10 percent^7 year over year
    from a higher origination market.
  oIn Australia, flow NIW was up nine percent^7 sequentially and up 30
    percent^7 year over year as the current year origination market was larger
    primarily from improved affordability from lower mortgage rates.
  oThe Canadian and Australian businesses continue to maintain sound capital
    positions.

Canada operating earnings of $42 million were up from $41 million in the prior
quarter and $40 million in the prior year. The loss ratio in the quarter was
30 percent, down from 32 percent in the prior quarter and down from 36 percent
in the prior year from lower new delinquencies, net of cures, and continued
improvement in Alberta. The lower losses in the current quarter were partially
offset by lower earned premiums from the maturing of the larger 2007 and 2008
books of business. Flow NIW was up 28 percent^7 sequentially from seasonal
variation and up 10 percent^7 year over year from a higher origination market.
At quarter end, the Canada mortgage insurance business had a regulatory
capital ratio of 164 percent^5, well in excess of regulatory requirements.
GAAP book value was $2.9 billion, of which $1.7 billion represented Genworth's
57.5 percent ownership interest.

Australia reported net operating earnings of $57 million versus $44 million in
the prior quarter and $36 million in the prior year as claims development in
the quarter was in line with the first quarter reserve strengthening
expectations and from favorable taxes. The loss ratio in the quarter was 47
percent, down seven points sequentially and one point from the prior year.
Overall, delinquencies were down 10 percent from the prior quarter and new
delinquencies were lower in all major states. Flow NIW was up nine percent^7
sequentially and up 30 percent^7 year over year as the current year
origination market was larger primarily from improved affordability from lower
mortgage rates. At quarter end, the Australia mortgage insurance business had
a regulatory capital ratio of 136 percent^5, as the company terminated a
reinsurance agreement with an affiliate reinsurer during the quarter. The GAAP
book value was $2.3 billion as of the end of the quarter.

Other countries net operating loss of $5 million improved $4 million
sequentially and $3 million from the prior year driven by a reduction in
losses primarily in Ireland.

U.S. Mortgage Insurance Segment

Highlights

  oU.S. MI net operating loss was $38 million, compared with $25 million in
    the prior quarter and $79 million in the prior year. Results in the prior
    quarter included a $12 million after-tax favorable impact from the
    termination of an external reinsurance contract.
  oTotal flow delinquencies of 69,174 decreased four percent sequentially and
    19 percent from the prior year. New flow delinquencies increased
    approximately five percent from the prior quarter reflecting seasonal
    development and decreased approximately 24 percent from the prior year.
  oLoss mitigation savings were $189 million in the current quarter and $509
    million through the third quarter of 2012, exceeding the previously
    announced full year loss mitigation savings target of $300 to $400
    million.
  oFlow NIW increased 31 percent over the prior quarter to $4.7 billion
    reflecting an increase in overall private mortgage insurance penetration,
    a larger origination market and an increase in market share.
  oThe combined risk-to-capital ratio as of September 30, 2012 is estimated
    at 29.8:1^5.
  oDuring the quarter, the government sponsored entities (GSEs) granted
    Genworth Residential Mortgage Assurance Corporation (GRMAC) an extension
    of the ability to write new business in non-waiver states through December
    31, 2013.

U.S. MI net operating loss was $38 million, compared with $25 million in the
prior quarter and $79 million in the prior year. Results in the prior quarter
included a $12 million after-tax favorable impact from the termination of an
external reinsurance contract.

Total flow delinquencies decreased four percent sequentially and 19 percent
versus the prior year. New flow delinquencies increased approximately five
percent from the prior quarter reflecting seasonal development but declined
approximately 24 percent from the prior year, reflecting the continued burn
through of delinquencies from the 2005 to 2008 book years. The flow average
reserve per delinquency was $30,000, down slightly from the prior quarter.

Total losses were flat compared to the prior quarter as a seasonal increase in
new delinquency development and lower cure activity was offset by effective
loss mitigation programs and modest changes in aging of existing
delinquencies. Paid claims increased 10 percent from the prior year, driven by
higher claim counts and a reduction in captive benefits, partially offset by a
reduction in severity from claims mitigation.

Loss mitigation savings were $189 million in the quarter, up 17 percent from
the prior quarter, as a favorable mix of later stage delinquent loans were
modified partially offset by an expected reduction in overall workouts.

Flow NIW increased 31 percent over the prior quarter to $4.7 billion
reflecting an increase in overall private mortgage insurance penetration, a
larger origination market and an increase in market share. Overall private
mortgage insurance market penetration was up approximately one point versus
the prior quarter and up approximately two points year over year. The
company's market share at the end of the quarter is estimated to be
approximately 13 percent. Flow persistency was 81 percent. In addition, the
Home Affordable Refinance Program (HARP) accounted for about $2.6 billion of
insurance that is treated as a modification of the coverage on existing
insurance in force rather than NIW.

The combined U.S. MI statutory risk-to-capital ratio is estimated at 29.8:1^5
at the end of the third quarter with the risk-to-capital ratio for Genworth
Mortgage Insurance Corporation (GEMICO), the company's primary mortgage
insurance company, estimated at 35.1:1^5. GEMICO currently maintains waivers
or other authorizations from 45 states that permit the company to continue
writing new business while its risk-to-capital ratio exceeds 25.0:1.
Additionally, the company has separately capitalized and licensed legal
entities to write new business for states where waivers are not in place,
subject to the approval of applicable regulators and the GSEs approval.
Currently, new business in four states is being written out of GRMAC, a
subsidiary of GEMICO, which has an estimated risk-to-capital ratio at the end
of the third quarter of 4.4:1^5. During the third quarter, the North Carolina
Department of Insurance granted GEMICO an 18 month extension of the revocable
waiver of compliance with its risk-to-capital requirement through July 31,
2014. Also during the quarter, the GSEs granted GRMAC an extension of the
ability to write new business in non-waiver states through December 31, 2013.

Corporate and Runoff Division

Corporate and Runoff Division net operating loss was $39 million, compared
with $50 million in the prior quarter and $63 million in the prior year.

Corporate and Runoff Division
Net Operating Income (Loss)
(Amounts in millions)                             Q3 12     Q2 12     Q3 11
Runoff                                            $ 9       $ (6)     $ (7)
Corporate and Other                                 (48)      (44)      (56)
Total Corporate and Runoff                        $ (39)    $ (50)    $ (63)
Assets Under Management^4
(Amounts in millions)                             Q3 12     Q2 12     Q3 11
Variable Annuities                                $ 8,270   $ 8,225   $ 8,155
Guaranteed Investment Contracts, Funding
Agreements
        Backing Notes and Funding Agreements        2,297     2,221     2,717
Total Runoff                                      $ 10,567  $ 10,446  $ 10,872

Runoff Segment

The Runoff segment's net operating income was $9 million, compared with net
operating losses of $6 million in the prior quarter and $7 million in the
prior year, as the current quarter reflected improved equity market conditions
versus both the prior quarter and prior year. Results in the current quarter
also included a $6 million unfavorable impact from refinement of DAC
assumptions primarily related to the company's annual review of assumptions.

Corporate and Other

Corporate and Other's net operating loss was $48 million, compared with $44
million in the prior quarter and $56 million in the prior year. Results in the
current quarter reflected tax benefits of $5 million that are expected to
reverse in the fourth quarter of 2012. On a pre-tax operating basis, the loss
decreased modestly year over year.

Investment Portfolio Performance

Investment income decreased, with net investment incomeof $825 million,
compared to $846 million in the second quarter. The core yield^2 decreased
sequentially to approximately 4.5 percent from approximately 4.7 percent from
less favorable limited partnership performance.

Net income in the quarter included $1 million of net investment losses, net of
tax and DAC amortization of $6 million.

Net unrealized investment gains were $2.6 billion, net of tax and other items,
as of September 30, 2012, compared with $1.5 billion as of September 30, 2011
and $2.0 billion as of June 30, 2012. The fixed maturity securities portfolio
had gross unrealized investment gains of $6.7 billion compared with $4.9
billion as of September 30, 2011 and gross unrealized investment losses of
$0.8 billion compared with $1.4 billion as of September 30, 2011.

Holding Company

Genworth's holding company ended the quarter with approximately $1.4 billion
of cash and highly liquid securities, up approximately $200 million
sequentially primarily from $116 million of dividends paid to the holding
company from the Insurance and Wealth Management Division and $20 million from
Canada. The holding company targets maintaining cash and highly liquid
securities of at least two times its annual debt service expense. The holding
company has no debt maturities until June 2014. 

About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance
holding company dedicated to helping people secure their financial lives,
families and futures. Genworth has leadership positions in offerings that
assist consumers in protecting themselves, investing for the future and
planning for retirement -- including life insurance, long term care insurance,
financial protection coverages, and independent advisor-based wealth
management -- and mortgage insurance that helps consumers achieve home
ownership while assisting lenders in managing their risk and capital.

Genworth has approximately 6,300 employees and operates through three
divisions: Insurance and Wealth Management, which includes U.S. Life
Insurance, Wealth Management and International Protection segments; Global
Mortgage Insurance, which includes U.S. and International Mortgage Insurance
segments; and the Corporate and Runoff division. Its products and services are
offered through financial intermediaries, advisors, independent distributors
and sales specialists. Genworth Financial, Inc., which traces its roots back
to 1871, became a public company in 2004 and is headquartered in Richmond,
Virginia. For more information, visit genworth.com. From time to time,
Genworth Financial, Inc. releases important information via postings on its
corporate website. Accordingly, investors and other interested parties are
encouraged to enroll to receive automatic email alerts and Really Simple
Syndication (RSS) feeds regarding new postings. Enrollment information is
found under the "Investors" section of genworth.com.

Conference Call and Financial Supplement Information
This press release and the third quarter 2012 financial supplement are now
posted on the company's website. Additional information regarding U.S.
mortgage insurance and Australia are also posted on the company's website,
http://investor.genworth.com. Investors are encouraged to review all of these
materials.

Genworth will conduct a conference call on October 31, 2012 at 9 a.m. (ET) to
discuss the quarter's results and the company's strategy. Additional
materials regarding the company's strategy will be available at 8:30 a.m.
(ET). The conference call will be accessible via telephone and the Internet.
The dial-in number for the conference call is 866 393.0571or 206 453.2872
(outside the U.S.). To participate in the call by webcast, register at
http://investor.genworth.com at least 15 minutes prior to the webcast to
download and install any necessary software.

Replays of the call will be available through November 14, 2012 at 855
859.2056 or 404 537.3406 (outside the U.S.); the conference ID # for the call
is # 28897883. The webcast will also be archived on the company's website.

Use of Non-GAAP Measures
This press release includes the non-GAAP financial measure entitled "net
operating income (loss)." The chief operating decision maker evaluates segment
performance and allocates resources on the basis of net operating income
(loss) available to Genworth Financial, Inc.'s common stockholders. The
company defines net operating income (loss) available to Genworth Financial,
Inc.'s common stockholders as income (loss) from continuing operations
excluding the after-tax effects of income attributable to noncontrolling
interests, net investment gains (losses), goodwill impairments, gains (losses)
on the sale of businesses and infrequent or unusual non-operating items. The
company excludes net investment gains (losses) and infrequent or unusual
non-operating items because the company does not consider them to be related
to the operating performance of the company's segments and Corporate and Other
activities. A component of the company's net investment gains (losses) is the
result of impairments, the size and timing of which can vary significantly
depending on market credit cycles. In addition, the size and timing of other
investment gains (losses) can be subject to the company's discretion and are
influenced by market opportunities, as well as asset-liability matching
considerations. Goodwill impairments and gains (losses) on the sale of
businesses are also excluded from net operating income (loss) available to
Genworth Financial, Inc.'s common stockholders because, in the company's
opinion, they are not indicative of overall operating trends. Other
non-operating items are also excluded from net operating income (loss)
available to Genworth Financial, Inc.'s common stockholders if, in the
company's opinion, they are not indicative of overall operating trends.

In the third quarter of 2012, the company revised its definition of net
operating income (loss) available to Genworth Financial, Inc.'s common
stockholders to exclude goodwill impairments to better reflect the basis on
which the performance of its business is internally assessed and to reflect
management's opinion that it is not indicative of overall operating trends.
There was an $86 million after-tax goodwill impairment related to our
lifestyle protection insurance business recorded in the third quarter of 2012.
The company also modified its definition to explicitly state that gains
(losses) on the sale of businesses, which were previously included in the
infrequent and unusual category, are excluded from net operating income
(loss). All prior periods presented have been represented to reflect this new
definition.

There were no infrequent or unusual items excluded from net operating income
available to Genworth Financial, Inc.'s common stockholders during the periods
presented.

While some of these items may be significant components of net income (loss)
available to Genworth Financial, Inc.'s common stockholders in accordance
with GAAP, the company believes that net operating income (loss) available to
Genworth Financial, Inc.'s common stockholders and measures that are derived
from or incorporate net operating income (loss) available to Genworth
Financial, Inc.'s common stockholders, including net operating income (loss)
available to Genworth Financial, Inc.'s common stockholders per common share
on a basic and diluted basis, are appropriate measures that are useful to
investors because they identify the income (loss) attributable to the ongoing
operations of the business. Management also uses net operating income (loss)
available to Genworth Financial, Inc.'s common stockholders as a basis for
determining awards and compensation for senior management and to evaluate
performance on a basis comparable to that used by analysts. However, the items
excluded from net operating income (loss) available to Genworth Financial,
Inc.'s common stockholders have occurred in the past and could, and in some
cases will, recur in the future. Net operating income (loss) available to
Genworth Financial, Inc.'s common stockholders and net operating income (loss)
available to Genworth Financial, Inc.'s common stockholders per common share
on a basic and diluted basis are not substitutes for net income (loss)
available to Genworth Financial, Inc.'s common stockholders or net income
(loss) available to Genworth Financial, Inc.'s common stockholders per common
share on a basic and diluted basis determined in accordance with GAAP. In
addition, the company's definition of net operating income (loss) available to
Genworth Financial, Inc.'s common stockholders may differ from the definitions
used by other companies. The tables at the end of this press release reflect
net operating income (loss) as determined in accordance with accounting
guidance related to segment reporting and a reconciliation of net operating
income (loss) of the company's segments and Corporate and Other activities to
net income available to Genworth Financial, Inc.'s common stockholders for the
three months ended September 30, 2012 and 2011.

This press release includes the non-GAAP financial measure entitled "core
yield" as a measure of investment yield. The company defines core yield as the
investment yield adjusted for those items that are not recurring in nature.
Management believes that analysis of core yield enhances understanding of the
investment yield of the company. However, core yield as defined by the company
should not be viewed as a substitute for GAAP investment yield. In addition,
the company's definition of core yield may differ from the definitions used by
other companies. A reconciliation of core yield to reported GAAP yield is
included in a table at the end of this press release.

Definition of Selected Operating Performance Measures
The company reports selected operating performance measures including "sales,"
"assets under management" and "insurance in force" or "risk in force" which
are commonly used in the insurance and investment industries as measures of
operating performance.

Management regularly monitors and reports sales metrics as a measure of volume
of new and renewal business generated in a period. Sales refer to: (1)
annualized first-year premiums for term life and long term care insurance; (2)
annualized first-year deposits plus five percent of excess deposits for
universal and term universal life insurance products; (3) 10 percent of
premium deposits for linked-benefits products; (4) new and additional
premiums/deposits for fixed annuities; (5) gross flows and net flows, which
represent gross flows less redemptions, for the wealth management business;
(6) written premiums and deposits, gross of ceded reinsurance and
cancellations, and premium equivalents, where the company earns a fee for
administrative services only business, for the lifestyle protection insurance
business; and (7) new insurance written for mortgage insurance. Sales do not
include renewal premiums on policies or contracts written during prior
periods. The company considers annualized first-year premiums, premium
equivalents, new premiums/deposits, gross and net flows, written premiums and
new insurance written to be a measure of the company's operating performance
because they represent a measure of new sales of insurance policies or
contracts during a specified period, rather than a measure of the company's
revenues or profitability during that period.

This press release also includes the metric entitled "underwriting margin"
related to the lifestyle protection business. The company defines underwriting
margin as underwriting profit divided by net earned premiums. Underwriting
profit is defined as premiums less benefits and other changes in reserves,
commissions (which include amortization of deferred acquisition costs) and
profit share expenses. Management believes that this analysis of underwriting
margin enhances the understanding of the lifestyle protection business.

Management regularly monitors and reports assets under management for the
wealth management business, insurance in force and risk in force. Assets
under management for the wealth management business represent third-party
assets under management that are not consolidated in the company's financial
statements. Insurance in force for the life, international mortgage and U.S.
mortgage insurance businesses is a measure of the aggregate face value of
outstanding insurance policies as of the respective reporting date. For the
risk in force in the international mortgage insurance business, the company
has computed an "effective" risk in force amount, which recognizes that the
loss on any particular loan will be reduced by the net proceeds received upon
sale of the property. Effective risk in force has been calculated by applying
to insurance in force a factor of 35 percent that represents the highest
expected average per-claim payment for any one underwriting year over the life
of the company's businesses in Canada and Australia. Risk in force for the
U.S. mortgage insurance business is the obligation that is limited under
contractual terms to the amounts less than 100 percent of the mortgage loan
value. The company considers assets under management for the wealth
management business, insurance in force and risk in force to be a measure of
the company's operating performance because they represent a measure of the
size of the business at a specific date which will generate revenues and
profits in a future period, rather than a measure of the company's revenues or
profitability during that period.

This press release also includes information related to loss mitigation
activities for the U.S. mortgage insurance business. The company defines loss
mitigation activities as rescissions, cancellations, borrower loan
modifications, repayment plans, lender- and borrower-titled presales, claims
administration and other loan workouts. Estimated savings related to
rescissions are the reduction in carried loss reserves, net of premium refunds
and reinstatement of prior rescissions. Estimated savings related to loan
modifications and other cure related loss mitigation actions represent the
reduction in carried loss reserves. For non-cure related actions, including
presales, the estimated savings represent the difference between the full
claim obligation and the actual amount paid. The company believes that this
information helps to enhance the understanding of the operating performance of
the U.S. mortgage insurance business as loss mitigation activities
specifically impact current and future loss reserves and level of claim
payments.

These operating measures enable the company to compare its operating
performance across periods without regard to revenues or profitability related
to policies or contracts sold in prior periods or from investments or other
sources.

Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by words such as "expects,"
"intends," "anticipates," "plans," "believes," "seeks," "estimates," "will" or
words of similar meaning and include, but are not limited to, statements
regarding the outlook for the company's future business and financial
performance. Forward-looking statements are based on management's current
expectations and assumptions, which are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict. Actual
outcomes and results may differ materially due to global political, economic,
business, competitive, market, regulatory and other factors and risks,
including the following:

  oRisks relating to the company's businesses, including downturns and
    volatility in global economies and equity and credit markets; downgrades
    or potential downgrades in the company's financial strength or credit
    ratings; interest rate fluctuations and levels; adverse capital and credit
    market conditions; the impact of expiration of the company's credit
    facilities; the valuation of fixed maturity, equity and trading
    securities; defaults, downgrades or other events impacting the value of
    the company's fixed maturity securities portfolio; defaults on the
    company's commercial mortgage loans or the mortgage loans underlying the
    company's investments in commercial mortgage-backed securities and
    volatility in performance; goodwill impairments; defaults by
    counterparties to reinsurance arrangements or derivative instruments; an
    adverse change in risk based capital and other regulatory requirements;
    insufficiency of reserves; legal constraints on dividend distributions by
    the company's subsidiaries; competition; availability, affordability and
    adequacy of reinsurance; loss of key distribution partners; regulatory
    restrictions on the company's operations and changes in applicable laws
    and regulations; legal or regulatory investigations or actions; the
    failure of or any compromise of the security of the company's computer
    systems; the occurrence of natural or man-made disasters or a pandemic;
    the effect of the enactment of the Dodd-Frank Wall Street Reform and
    Consumer Protection Act; changes in the accounting standards issued by the
    Financial Accounting Standards Board or other standard-setting bodies;
    impairments of or valuation allowances against the company's deferred tax
    assets; changes in expected morbidity and mortality rate; accelerated
    amortization of deferred acquisition costs and present value of future
    profits; reputational risks as a result of rate increases on certain in
    force long term care insurance products; medical advances, such as genetic
    research and diagnostic imaging, and related legislation; unexpected
    changes in persistency rates; ability to continue to implement actions to
    mitigate the impact of statutory reserve requirements; the failure of
    demand for long term care insurance to increase; political and economic
    instability or changes in government policies; foreign exchange rate
    fluctuations; unexpected changes in unemployment rates; unexpected
    increases in mortgage insurance default rates or severity of defaults; the
    significant portion of high loan to value insured international mortgage
    loans which generally result in more and larger claims than lower
    loan-to-value ratios; competition with government owned and government
    sponsored enterprises offering mortgage insurance; changes in
    international regulations reducing demand for mortgage insurance;
    increases in mortgage insurance default rates; failure to meet, or have
    waived to the extent needed, the minimum statutory capital requirements
    and hazardous financial condition standards; uncertain results of
    continued investigations of insured U.S. mortgage loans; possible
    rescissions of coverage and the results of objections to the company's
    rescissions; the extent to which loan modifications and other similar
    programs may provide benefits to the company; unexpected changes in
    unemployment and underemployment rates in the United States; further
    deterioration in economic conditions or a further decline in home prices
    in the United States; problems associated with foreclosure process defects
    in the United States that may defer claim payments; changes to the role or
    structure of Federal National Mortgage Association (Fannie Mae) and
    Federal Home Loan Mortgage Corporation (Freddie Mac); competition with
    government owned and government sponsored enterprises offering U.S.
    mortgage insurance; changes in regulations that affect the U.S. mortgage
    insurance business; the influence of Fannie Mae, Freddie Mac and a small
    number of large mortgage lenders and investors; decreases in the volume of
    high loan to value mortgage originations or increases in mortgage
    insurance cancellations in the United States; increases in the use of
    alternatives to private mortgage insurance in the United States and
    reductions by lenders in the level of coverage they select; the impact of
    the use of reinsurance with reinsurance companies affiliated with U.S.
    mortgage lending customers; legal actions under the Real Estate Settlement
    Procedures Act of 1974; and potential liabilities in connection with the
    company's U.S. contract underwriting services;
  oOther risks, including the risk that adverse market or other conditions
    might further delay or impede the planned IPO of the company's mortgage
    insurance business in Australia; the possibility that in certain
    circumstances the company will be obligated to make payments to General
    Electric Company (GE) under the tax matters agreement with GE even if the
    company's corresponding tax savings are never realized and payments could
    be accelerated in the event of certain changes in control; and provisions
    of the company's certificate of incorporation and bylaws and the tax
    matters agreement with GE may discourage takeover attempts and business
    combinations that stockholders might consider in their best interests; and
  oRisks relating to the company's common stock, including the suspension of
    dividends and stock price fluctuations.

The company undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future developments or
otherwise.



Condensed Consolidated Statements of Income
(Amounts in millions, except per share amounts)
                                                          Three months ended
                                                          September 30,
                                                           2012     2011
Revenues:
Premiums                                                   $ 1,311  $ 1,461
Net investment income                                        825      842
Net investment gains (losses)                                9        (157)
Insurance and investment product fees and other              391      375
          Total revenues                                     2,536    2,521
Benefits and expenses:
Benefits and other changes in policy reserves                1,363    1,457
Interest credited                                            193      194
Acquisition and operating expenses, net of
     deferrals                                               504      581
Amortization of deferred acquisition costs and
     intangibles                                             162      152
Goodwill impairment                                          89       —
Interest expense                                             126      124
          Total benefits and expenses                        2,437    2,508
Income before income taxes                                   99       13
Provision (benefit) for income taxes                         29       (7)
Net income                                                   70       20
Less: net income attributable to noncontrolling interests    36       36
Net income (loss) available to Genworth Financial, Inc.'s
     common stockholders                                   $ 34     $ (16)
Net income (loss) available to Genworth Financial, Inc.'s
     common stockholders per common share:
          Basic                                            $ 0.07   $ (0.03)
          Diluted                                          $ 0.07   $ (0.03)
Weighted-average common shares outstanding:
          Basic                                              491.7    490.8
          Diluted                                            493.9    490.8



Reconciliation of Net Operating Income to Net Income (Loss)
(Amounts in millions, except per share amounts)
                                                           Three months ended
                                                           September 30,
                                                           2012      2011
Net operating income (loss):
Insurance and Wealth Management Division
   U.S. Life Insurance segment
           Life Insurance                                  $  22     $ 64
           Long Term Care                                     45       17
           Fixed Annuities                                    19       21
   Total U.S. Life Insurance segment                          86       102
   International Protection segment                           8        22
   Wealth Management segment                                  10       12
   Total Insurance and Wealth Management Division             104      136
Global Mortgage Insurance Division
   International Mortgage Insurance segment
           Canada                                             42       40
           Australia                                          57       36
           Other Countries                                    (5)      (8)
   Total International Mortgage Insurance segment             94       68
   U.S. Mortgage Insurance segment                            (38)     (79)
   Total Global Mortgage Insurance Division                   56       (11)
Corporate and Runoff Division
   Runoff segment                                             9        (7)
   Corporate and Other                                        (48)     (56)
   Total Corporate and Runoff Division                        (39)     (63)
Net operating income                                          121      62
Adjustments to net operating income:
Net investment gains (losses), net of taxes and other
   adjustments                                                (1)      (78)
Goodwill impairment, net of taxes                             (86)     —
Net income (loss) available to Genworth Financial, Inc.'s
   common stockholders                                        34       (16)
Add: net income attributable to noncontrolling interests      36       36
Net income                                                 $  70     $ 20
Net income (loss) available to Genworth Financial, Inc.'s
   common stockholders per common share:
           Basic                                           $  0.07   $ (0.03)
           Diluted                                         $  0.07   $ (0.03)
Net operating income per common share:
           Basic                                           $  0.25   $ 0.13
           Diluted                                         $  0.25   $ 0.13
Weighted-average common shares outstanding:
           Basic                                              491.7    490.8
           Diluted                                            493.9    490.8



Condensed Consolidated Balance Sheets
(Amounts in millions)
                                                   September 30,  December 31,
                                                   2012           2011
Assets
 Cash, cash equivalents and invested assets        $   79,380     $   77,083
 Deferred acquisition costs                            5,020          5,193
 Intangible assets                                     488            580
 Goodwill                                              1,128          1,253
 Reinsurance recoverable                               17,195         16,998
 Deferred tax and other assets                         1,010          958
 Separate account assets                               10,166         10,122
      Total assets                                 $   114,387    $   112,187
Liabilities and stockholders' equity
 Liabilities:
  Future policy benefits                           $   33,221     $   32,175
  Policyholder account balances                        26,449         26,345
  Liability for policy and contract claims             7,545          7,620
  Unearned premiums                                    4,291          4,223
  Deferred tax and other liabilities                   7,510          7,146
  Borrowings related to securitization entities        353            396
  Non-recourse funding obligations                     2,325          3,256
  Long-term borrowings                                 4,880          4,726
  Separate account liabilities                         10,166         10,122
      Total liabilities                                96,740         96,009
 Stockholders' equity:
  Common stock                                         1              1
  Additional paid-in capital                           12,162         12,136
  Accumulated other comprehensive income (loss):
      Net unrealized investment gains (losses):
          Net unrealized gains (losses) on
          securities not
               other-than-temporarily impaired         2,641          1,617
          Net unrealized gains (losses) on
          other-than-
               temporarily impaired securities         (88)           (132)
      Net unrealized investment gains (losses)         2,553          1,485
      Derivatives qualifying as hedges                 2,011          2,009
      Foreign currency translation and other           659            553
      adjustments
  Total accumulated other comprehensive income         5,223          4,047
  (loss)
  Retained earnings                                    1,741          1,584
  Treasury stock, at cost                              (2,700)        (2,700)
      Total Genworth Financial, Inc.'s                 16,427         15,068
      stockholders' equity
  Noncontrolling interests                             1,220          1,110
      Total stockholders' equity                       17,647         16,178
      Total liabilities and stockholders' equity   $   114,387    $   112,187



Impact of Foreign Exchange on Operating Results^9
Three months ended September 30, 2012
                                          Percentages        Percentages
                                          Including Foreign  Excluding Foreign
                                          Exchange           Exchange^10
 International Protection:
 Sales                                        (16)%          (1)%
 Sales (3Q12 vs. 2Q12)                        (12)%          (7)%
 Canada Mortgage Insurance (MI):
 Flow new insurance written                   6%             10%
 Flow new insurance written (3Q12 vs.         26%            28%
 2Q12)
 Australia MI:
 Flow new insurance written                   24%            30%
 Flow new insurance written (3Q12 vs.         7%             9%
 2Q12)





Reconciliation of Core Yield to Reported Yield
                                                                                                                For the
                                                                                                                three
                                                                                                                months
                                                                                                                ended
                                                                                                                September
                                                                                                                30,
(Assets - amounts in billions)                                                                                  2012
Reported Total Invested Assets and Cash                                                                         $  78.6
Subtract:
        Securities lending                                                                                         0.2
        Unrealized gains (losses)                                                                                  7.3
        Derivative counterparty collateral                                                                         1.0
Adjusted end of period invested assets                                                                          $  70.1
Average Invested Assets Used in Reported Yield Calculation                                                      $  69.6
Subtract:
        Restricted commercial mortgage loans and other invested assets related to
                    securitization entities^11                                                                     0.4
Average Invested Assets Used in Core Yield Calculation                                                          $  69.2
(Income - amounts in
millions)
Reported Net Investment Income                                                                                  $  825
Subtract:
        Bond calls and commercial mortgage loan prepayments                                                        14
        Reinsurance^12                                                                                             19
        Other non-core items^13                                                                                    3
        Restricted commercial mortgage loans and other invested assets related to
                    securitization entities^11                                                                     6
Core Net Investment Income                                                                                      $  783
Reported Yield                                                                                                     4.74%
Core Yield                                                                                                         4.53%



------------------------------------------------------------------------------

^1 Unless otherwise stated, all references in this press release to net income
(loss), net income (loss) per share, net operating income (loss), net
operating income per share, book value, book value per share and stockholders'
equity should be read as net income (loss) available to Genworth's common
stockholders, net income (loss) available to Genworth's common stockholders
per share, net operating income available to Genworth's common stockholders,
net operating income (loss) available to Genworth's common stockholders per
share, book value available to Genworth's common stockholders, book value
available to Genworth's common stockholders per share and stockholders' equity
available to Genworth's common stockholders, respectively.

^2 This is a financial measure not calculated based on U.S. Generally Accepted
Accounting Principles (Non-GAAP). See the Use of Non-GAAP Measures section of
this press release for additional information.

^3 In the first quarter of 2012, the company changed its presentation for life
insurance sales to a premium equivalent basis. The prior period amounts have
been re-presented to reflect sales for term universal and universal life
insurance products as annualized first-year deposits plus five percent of
excess deposits and 10 percent of premium deposits for linked-benefits
products.

^4 Assets under management represent account values, net of reinsurance, and
managed third-party assets.

^5 Company estimate for the third quarter of 2012, due to timing of the filing
of statutory statements.

^6 See "Definition of Selected Operating Performance Measures" for definition
of underwriting margin.

^7 Percent change excludes the impact of foreign exchange.

^8 Calculated as pre-tax income as a percentage of average AUM annualized to
determine the current full year impact, excluding the impacts of GFIS. Average
AUM for September 30, 2011 excludes $2.6 billion related to GFIS. Pre-tax
income for September 30, 2011 excludes $2 million related to GFIS.

^9 All percentages are comparing the third quarter of 2012 to the third
quarter of 2011 unless otherwise stated.

^10 The impact of foreign exchange was calculated using the comparable prior
period exchange rates.

^11 Represents the incremental assets and investment income related to
restricted commercial mortgage loans and other invested assets.

^12 Represents imputed investment income related to reinsurance agreements in
the lifestyle protection insurance business.

^13 Includes mark-to-market adjustment on assets supporting executive deferred
compensation and various other immaterial items.

SOURCE Genworth Financial, Inc.

Website: http://www.genworth.com
Contact: Investors: Georgette Nicholas, +1-804-662-2248,
georgette.nicholas@genworth.com; Media: Al Orendorff, +1-804-662-2534,
alfred.orendorff@genworth.com
 
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