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Genworth Financial Announces First Quarter 2013 Results

           Genworth Financial Announces First Quarter 2013 Results

U.S. Mortgage Insurance Profitable & Capital Plan Completed April 1

U.S. Life Insurance Division Results Improved From Favorable Mortality

Agreement Reached To Sell Wealth Management Business For $412.5 Million

PR Newswire

RICHMOND, Va., April 30, 2013

RICHMOND, Va., April 30, 2013 /PRNewswire/ --Genworth Financial, Inc. (NYSE:
GNW) today reported results for the first quarter of 2013. The company
reported net income^1 of $103 million, or $0.21 per diluted share, compared
with net income of $46 million, or $0.09 per diluted share, in the first
quarter of 2012. Net operating income^2 for the first quarter of 2013 was $151
million, or $0.30 per diluted share, compared with net operating income of $17
million, or $0.03 per diluted share, in the first quarter of 2012.

"We achieved several milestones in the first quarter of 2013, including
progress on our long term care premium rate increase plans, the announcement
of the sale of our wealth management business, execution of the U.S. Mortgage
Insurance capital plan on April 1 and reporting a profitable quarter in that
business," said Tom McInerney, President and CEO. "I am pleased with the
progress on execution, but we must continue to focus and take action on our
plan for rebuilding shareholder value."

Consolidated Net Income &
Net Operating Income
                                            Three months ended March 31
                                            (Unaudited)
                                            2013              2012
                                                     Per               Per
                                            Total    diluted  Total    diluted
(Amounts in millions, except per share)              share             share
Net income                                  $ 103    $  0.21  $ 46     $  0.09
Net operating income                        $ 151    $  0.30  $ 17     $  0.03
Weighted average diluted shares               496.8             495.7
Book value per share                        $ 32.90           $ 29.89
Book value per share, excluding
accumulated
      other comprehensive income (loss)     $ 23.11           $ 22.45



Net investment losses, net of tax and other adjustments, were $28 million in
the quarter compared to net investment gains of $17 million in the prior year.
Total investment impairments, net of tax, were $7 million in the current
quarter and $10 million in the prior year.

In March 2013, the company entered into an agreement to sell the wealth
management business. Beginning in the first quarter of 2013, this business is
being separately presented as discontinued operations and all prior periods
herein have been re-presented. During the quarter, the company recognized $27
million from a goodwill impairment and other loss related to the sale of the
wealth management business, partially offset by $7 million of income from
discontinued operations. The company expects the transaction to close in the
second half of 2013, subject to customary closing conditions, including
requisite regulatory approvals, and anticipates recording an additional
after-tax loss of up to $10 million at that time. Assets under management as
of March 31, 2013 for the wealth management business were $23.1 billion.

The company has a practice of refunding the post-delinquent premiums in our
U.S. mortgage insurance business to the insured party if the delinquent loan
goes to claim. The company's historical accounting practice was to account for
these premium refunds as a reduction in premiums upon payment. In the first
quarter of 2013, the company determined that it should have been recording a
liability for premiums received on the delinquent loans where its practice was
to refund post-delinquent premiums. This error was not material to the
company's consolidated financial condition, results of operations or cash
flows as presented in its previously filed annual and quarterly financial
statements; however, the adjustment to correct the cumulative effect of this
error would have been material if recorded in the first quarter of 2013. The
company restated the financial information to correct this error for all
periods presented herein. The cumulative decrease to retained earnings was $46
million as of January 1, 2012.

Net operating income results are summarized in the table below:

Net Operating Income (Loss)
(Amounts in millions)                      Q1 13   Q4 12   Q1 12
U.S. Life Insurance Division:
 U.S. Life Insurance                       $ 85    $ 76    $ 64
 Total U.S. Life Insurance Division          85      76      64
Global Mortgage Insurance Division:
 International Mortgage Insurance            81      165     7
 U.S. Mortgage Insurance (U.S. MI)           21      (32)    (44)
 Total Global Mortgage Insurance Division    102     133     (37)
Corporate and Other Division:
 International Protection                    6       8       5
 Runoff                                      16      8       35
 Corporate and Other                         (58)    (65)    (50)
 Total Corporate and Other Division          (36)    (49)    (10)
Total Net Operating Income                 $ 151   $ 160   $ 17

Net operating income 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 is included at the end of this
press release.

Unless specifically noted in the discussion of results for the International
Mortgage Insurance and International Protection 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 first quarter of 2013 was flat versus the prior year and a $1 million
favorable impact versus the prior quarter.

U.S. Life Insurance Division

U.S. Life Insurance Division net operating income was $85 million, compared
with $76 million in the prior quarter and $64 million a year ago.

U.S. Life Insurance Division
Net Operating Income
(Amounts in millions)      Q1 13  Q4 12  Q1 12
U.S. Life Insurance
      Life Insurance       $  36  $  49  $  6
      Long Term Care          20     7      35
      Fixed Annuities         29     20     23
Total U.S. Life Insurance     85     76     64
Total U.S. Life Insurance  $  85  $  76  $  64

Sales

(Amounts in millions)  Q1 13  Q4 12  Q1 12
U.S. Life Insurance
 Life Insurance
  Term Life            $ 4    $ —    $ —
  Term Universal Life    1      11     31
  Universal Life         9      17     16
  Linked Benefits        2      3      3
 Long Term Care
  Individual             35     60     45
  Group                  5      4      3
 Fixed Annuities         107    248    336

Account Value

(Amounts in millions)  Q1 13     Q4 12     Q1 12
Fixed Annuities        $ 18,301  $ 18,581  $ 18,360

U.S. Life Insurance Division

Highlights

  oU.S. Life Insurance Division net operating income was $85 million,
    compared with $76 million in the prior quarter and $64 million a year
    ago. Results reflected favorable mortality experience across the life
    insurance, long term care insurance and fixed annuity product lines.
  oSales were down reflecting a combination of second half of 2012 product
    and pricing changes.
  oThe consolidated risk-based capital (RBC) ratio is estimated to be
    approximately 450 percent^^3, up from approximately 430 percent at the end
    of the fourth quarter of 2012.

Life Insurance

Life insurance net operating income was $36 million, compared with $49 million
in the prior quarter and $6 million in the prior year. While results in the
current quarter benefited from favorable mortality experience versus
expectations, mortality was less favorable than the prior quarter because of
higher severity. Results also reflected lower in force margins versus the
prior quarter. Results in the prior quarter included a $3 million after-tax
gain related to selective repurchases of notes secured by non-recourse funding
obligations. Results in the prior year included a $41 million GAAP after-tax
net loss from the company's first life block transaction, partially offset by
$13 million of favorable interest expense associated with an adjustment
related to the tax matters agreement with our former parent. Sales were down
$15 million versus the prior quarter and $34 million versus the prior year
reflecting the product and pricing changes made in the second half of 2012.
The company continues to make pricing and product changes and anticipates
launching new universal life insurance products beginning in the second
quarter of 2013.

Long Term Care Insurance

Long term care insurance net operating income was $20 million, compared with
$7 million in the prior quarter and $35 million in the prior year. The current
quarter included $6 million of net favorable actuarial reserve and other
adjustments. Relative to the prior quarter, improved claim termination rates
resulted in $14 million lower incurred losses. Claim termination rates were
also favorable relative to the prior year, but were more than offset by a
higher average reserve build on new claims and other adjustments. Earnings
were reduced by $9 million from the prior quarter as investment yields were
impacted primarily from lower limited partnership income. Earnings were also
reduced by $7 million from the prior year as investment yields were impacted
by lower limited partnership income and the low interest rate environment.
These investment yield impacts were partially offset by net investment income
on assets backing growth of the block. Results in the prior quarter included a
$5 million unfavorable refinement to reserves to more fully reflect the low
interest rate environment. Results in the prior year included a $10 million
favorable actuarial reserve adjustment as part of a multi-stage system
conversion. The reported loss ratio for the current quarter was 69 percent.

Individual long term care sales decreased from the prior quarter to $35
million as the accelerated sales in the prior quarter ahead of the previously
announced pricing and portfolio actions subsided. The company continues to
utilize reinsurance in long term care insurance as part of its capital
optimization strategies.

Effective March 21, 2013, the company suspended sales of individual long term
care insurance products in California in light of the return profile on those
products which were an earlier generation of product that did not have the
benefits and pricing changes associated with the new products. The company's
individual long term care insurance product filing has now been approved in
California and the current intent is to launch this new product in California
during the third quarter of 2013.

Additionally, on April 15, 2013, the company launched a new product,
Privileged Choice Flex 2, in 31 states, which includes underwriting
improvements such as gender distinct pricing for single applicants and blood
and lab underwriting requirements for all applicants. These changes may have a
temporary impact on sales levels.

In addition, the company is announcing the cessation of new sales of
AARP-branded long term care insurance products as the company focuses on long
term care insurance sales and product offerings to improve returns. Existing
insureds' coverage will not be affected by this change. There may be temporary
increases in long term care insurance sales levels as a result of these
actions.

In the third quarter of 2012, the company filed for long term care in force
premium rate increases with the goal of achieving an average premium increase
in excess of 50 percent on 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. The premium rate increases are designed to
mitigate losses on the older generation policies. Although the earlier series
of the newer generation policies have generated positive operating earnings to
date, the rate increase on these policies will 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 should generate approximately $200 to $300 million of additional
annual premiums when fully implemented over the next five years. As of March
31, 2013, this round of rate action has been filed in 49 states and the
company has received approvals representing approximately $60 to $65 million
of the targeted premium increase.

Fixed Annuities

Fixed annuities net operating income was $29 million, compared with $20
million in the prior quarter and $23 million in the prior year. Results in the
quarter included more favorable mortality of $10 million versus the prior
quarter and $9 million versus the prior year. Results in the prior year
reflected a release of a $3 million expense accrual related to state guarantee
funds. Sales in the quarter totaled $107 million and were down both
sequentially and from the prior year as the company continued to maintain
margins in the low interest rate environment.

U.S. Life Companies Capital

The consolidated risk-based capital (RBC) ratio is estimated to be
approximately 450 percent^3, up from approximately 430 percent at the end of
the fourth quarter of 2012, from improved equity markets, favorable credit
markets and investment portfolio actions that reduced required capital.

Global Mortgage Insurance Division

Global Mortgage Insurance Division had net operating income of $102 million,
compared with net operating income of $133 million in the prior quarter and a
net operating loss of $37 million a year ago.



Global Mortgage Insurance Division
Net Operating Income (Loss)
(Amounts in millions)                   Q1 13  Q4 12   Q1 12
International Mortgage Insurance
             Canada                     $ 42   $ 114   $ 37
             Australia                    46     62      (21)
             Other Countries              (7)    (11)    (9)
Total International Mortgage Insurance    81     165     7
U.S. Mortgage Insurance                   21     (32)    (44)
Total Global Mortgage Insurance         $ 102  $ 133   $ (37)



Sales
(Amounts in billions)             Q1 13  Q4 12  Q1 12
International Mortgage Insurance
       Flow
             Canada               $ 3.3  $ 4.4  $ 3.5
             Australia              7.9    9.6    7.7
             Other Countries        0.4    0.5    0.3
       Bulk
             Canada                 2.4    4.1    0.5
             Australia              —      —      0.3
             Other Countries        —      —      —
U.S. Mortgage Insurance
       Primary Flow                 4.7    5.1    3.0
       Primary Bulk                 —      —      —



International Mortgage Insurance Segment

Highlights

  oReported International Mortgage Insurance segment operating earnings were
    $81 million, compared with $165 million in the prior quarter, which
    included a $78 million after-tax favorable adjustment in Canada, and $7
    million a year ago.
  oReported Canada operating earnings of $42 million were down from $114
    million in the prior quarter and up from $37 million in the prior year.
    Results in the prior quarter included a $78 million after-tax favorable
    adjustment from the reversal of the accrued liability for exit fees
    related to the government guarantee fund.
  oReported Australia operating earnings of $46 million were down from $62
    million in the prior quarter and up from a net operating loss of $21
    million in the prior year. Results in the prior year included a $53
    million after-tax impact from reserve strengthening. 
  oOther Countries had a reported net operating loss of $7 million, compared
    to $11 million in the prior quarter and $9 million in the prior year.
  oIn Canada, flow new insurance written (NIW) was down 25 percent^4
    sequentially and six percent^4 year over year. In addition, in the current
    quarter the company completed $2.4 billion of bulk transactions,
    consisting of low loan-to-value prime loans.
  oIn Australia, flow NIW was down 18 percent^4 sequentially and up three
    percent^4 year over year.
  oThe Canadian and Australian businesses continue to maintain sound capital
    positions.

Canada Mortgage Insurance

Canada operating earnings of $42 million were down from $114 million in the
prior quarter and up from $37 million in the prior year. Results in the prior
quarter included a $78 million after-tax favorable adjustment from the
reversal of the accrued liability for exit fees related to the government
guarantee fund. The loss ratio in the quarter was 31 percent, flat to the
prior quarter and down from 38 percent in the prior year from lower new
delinquencies, net of cures, and continued improvement in Alberta. Total
delinquencies were down nine percent sequentially from the maturing of the
larger 2007 and 2008 books of business and continued improvement in Alberta.
Flow NIW was down 25 percent^4 sequentially and six percent^4 year over year
from regulatory changes to the rules governing the issuance of high
loan-to-value residential mortgages made in July 2012 and normal seasonal
variation. In addition, the company completed several bulk transactions,
consisting of low loan-to-value prime loans, of approximately $2.4 billion
reflecting its selective participation in this market. At quarter end, the
Canada mortgage insurance business had a regulatory capital ratio of 216
percent^3, well in excess of regulatory requirements. GAAP book value was $3.0
billion, of which $1.7 billion represented Genworth's 57.4 percent ownership
interest.

Australia Mortgage Insurance

Australia reported net operating earnings of $46 million versus $62 million in
the prior quarter and a net operating loss of $21 million in the prior year.
Results in the prior year reflected a $53 million after-tax impact from
reserve strengthening. Results in the prior quarter included favorable taxes.
The loss ratio in the quarter was 47 percent, up 11 points sequentially and
down 107 points from the prior year. New delinquencies were up seven percent
from the prior quarter and cures were down 24 percent from the prior quarter
reflecting normal seasonal variation. Flow NIW was down 18 percent^4
sequentially because of a smaller origination market and up three percent^4
year over year. At quarter end, the Australia mortgage insurance business had
a regulatory capital ratio of 144 percent^3, well in excess of regulatory
requirements. The GAAP book value was $2.3 billion as of the end of the
quarter.

Other Countries Mortgage Insurance

Other Countries had a net operating loss of $7 million, compared to $11
million in the prior quarter and $9 million in the prior year from lower new
delinquencies, primarily in Ireland.

U.S. Mortgage Insurance Segment

Highlights

  oU.S. MI net operating income was $21 million, compared with a net
    operating loss of $32 million in the prior quarter and a net operating
    loss of $44 million in the prior year.
  oFlow NIW decreased eight percent from the prior quarter and increased 57
    percent over the prior year to $4.7 billion.
  oThe combined risk-to-capital ratio as of March 31, 2013 is estimated at
    24.2:1^3.
  oOn April 1, 2013, the company announced the completion of the
    comprehensive U.S. MI capital plan and contributed $100 million of capital
    to U.S. MI as part of the plan.

U.S. MI net operating income was $21 million, compared with a net operating
loss of $32 million in the prior quarter and a net operating loss of $44
million in the prior year. Results in the quarter included a $4.5 million
charge related to the settlement with the Consumer Financial Protection Bureau
(CFPB) announced on April 4, 2013.

Total flow delinquencies decreased 10 percent sequentially and 22 percent
versus the prior year. New flow delinquencies decreased approximately 12
percent from the prior quarter and decreased approximately 18 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
$29,800, up slightly from the prior quarter.

Loss mitigation savings were $159 million in the quarter, down slightly from
the prior quarter. The company remains on track to achieve full year loss
mitigation savings of $250 to $350 million.

Total losses were down $96 million compared to the prior quarter from lower
new delinquencies, seasonal benefits in cures and favorable changes in aging.

Flow NIW of $4.7 billion decreased eight percent over the prior quarter from
normal seasonal variation in the origination market and increased 57 percent
versus the prior year reflecting an increase in both refinance and purchase
private mortgage insurance penetration and a larger origination market and
stable market share. Overall private mortgage insurance market penetration was
flat to the prior quarter and up approximately three points year over year.
The company's market share at the end of the quarter is estimated to be 12
percent. Flow persistency was 80 percent. In addition, the Home Affordable
Refinance Program (HARP) accounted for about $2.1 billion in the quarter 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 24.2:1^3
at the end of the first quarter with the risk-to-capital ratio for Genworth
Mortgage Insurance Corporation (GMICO) estimated at 26.4:1^3. GMICO 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
(government sponsored entities) approval. Currently, new business in four
states is being written out of Genworth Residential Mortgage Assurance
Corporation (GRMAC), a subsidiary of GMICO.

On April 1, 2013, the company announced that the comprehensive U.S. MI capital
plan has received all necessary approvals and has been fully implemented. As
part of the comprehensive capital plan, Genworth contributed $100 million to
GMICO on April 1, 2013. The contribution has a favorable impact to GMICO's
risk-to-capital ratio of approximately three points.

Given the trends of new delinquencies, reserves, new insurance written, loss
mitigation benefits and mortgage insurance penetration, and assuming no
significant deterioration in the U.S. housing market or material global
economic downturns, the company continues to believe these trends create the
conditions for continued improvement in earnings for the U.S. mortgage
insurance business. The company has not changed its view that the U.S. MI
business will have a potential return to breakeven or modest profitability
during one or two quarters in 2013.

Corporate and Other Division

Corporate and Other Division net operating loss was $36 million, compared with
$49 million in the prior quarter and $10 million in the prior year.



Corporate and Other Division
Net Operating Income (Loss)
(Amounts in millions)      Q1 13   Q4 12   Q1 12
International Protection   $ 6     $ 8     $ 5
Runoff                       16      8       35
Corporate and Other          (58)    (65)    (50)
Total Corporate and Other  $ (36)  $ (49)  $ (10)

Account Value

(Amounts in millions)                                Q1 13    Q4 12    Q1 12
Variable Annuities                                   $ 8,177  $ 8,095  $ 8,522
Guaranteed Investment Contracts, Funding Agreements
        Backing Notes and Funding Agreements           1,970    2,153    2,594

International Protection Segment

International Protection reported operating earnings of $6 million, compared
with $8 million in the prior quarter and $5 million in the prior year. The
business continues to be impacted by the slow consumer lending environment in
Europe. The reported loss ratio increased one point from both the prior
quarter and prior year to 24 percent from increased unemployment in Southern
Europe. The underwriting margin^5 was flat sequentially and increased three
points from the prior year to 17 percent from reduced profit sharing. In light
of the continued slow consumer lending environment in Europe, additional
actions are being taken to reduce expenses and mitigate these impacts such as
expanding the reinsurance strategy in new markets. At quarter end, the
lifestyle protection business had a regulatory capital ratio of approximately
345 percent^3.

Runoff Segment

The Runoff segment's net operating income was $16 million, compared with $8
million in the prior quarter and $35 million in the prior year. Results in the
current quarter reflected more favorable equity market conditions versus the
prior quarter, but less favorable versus the prior year. Results in the
current quarter reflected lower tax benefits versus both the prior quarter and
prior year.

Corporate and Other

Corporate and Other's net operating loss was $58 million, compared with $65
million in the prior quarter and $50 million in the prior year. Results in the
prior quarter reflected higher expenses associated with the debt tender.
Results in the prior year reflected $13 million of favorable interest expense
associated with an adjustment related to the tax matters agreement with our
former parent.

Investment Portfolio Performance

Investment income decreased, with net investment incomeof $814 million,
compared to $840 million in the fourth quarter of 2012. The reported yield for
the current quarter was approximately 4.7 percent. The core yield^2 decreased
to approximately 4.5 percent from approximately 4.6 percent in the prior
quarter from less favorable limited partnership income and bond call
performance.

Net income in the quarter included $28 million of net investment losses, net
of tax and DAC amortization of $12 million. Total investment impairments, net
of tax, were $7 million in the current quarter and $10 million in the prior
year.

Net unrealized investment gains were $2.4 billion, net of tax and other items,
as of March 31, 2013, compared with $1.3 billion as of March 31, 2012 and $2.6
billion as of December 31, 2012. The fixed maturity securities portfolio had
gross unrealized investment gains of $6.2 billion compared with $4.6 billion
as of March 31, 2012 and gross unrealized investment losses of $0.5 billion
compared with $1.1 billion as of March 31, 2012.

Holding Company

Genworth's holding company^6 ended the quarter with approximately $955 million
of cash and highly liquid securities, down $38 million compared to the prior
quarter. The holding company targets maintaining cash balances of at least two
times its annual debt service expense plus a risk buffer of $350 million. The
holding company has no debt maturities until June 2014. On March 27, 2013, the
company announced it has reached an agreement to sell its wealth management
business, including Genworth Financial Wealth Management and alternative
solutions provider, the Altegris companies, to a partnership of Aquiline
Capital Partners and Genstar Capital for $412.5 million. The sale is expected
to close in the second half of 2013, subject to customary closing conditions,
including requisite regulatory approvals. Proceeds from the transaction, net
of transaction related expenses, will be held at the holding company and will
be used to address the 2014 debt at maturity or before. As part of the
comprehensive U.S. MI capital plan, Genworth contributed $100 million to GMICO
on April 1, 2013.

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 5,840 employees and operates through three
divisions: U.S. Life Insurance, which includes life insurance, long term care
insurance and fixed annuities; Global Mortgage Insurance, containing U.S.
Mortgage Insurance and International Mortgage Insurance segments; and the
Corporate and Other division, which includes the International Protection and
Runoff segments and the wealth management business presented as discontinued
operations. Products and services are offered through financial
intermediaries, advisors, independent distributors and sales specialists.
Genworth Financial, Inc., headquartered in Richmond, Virginia, traces its
roots back to 1871 and became a public company in 2004. 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 first quarter 2013 financial supplement are now
posted on the company's website. Additional information regarding business
results will be posted on the company's website, http://investor.genworth.com,
by 8:30 a.m. on May 1, 2013. Investors are encouraged to review these
materials.

Genworth will conduct a conference call on May 1, 2013 at 9 a.m. (ET) to
discuss the quarter's results and provide an update on the company's strategy
and 2013 goals. The conference call will be accessible via telephone and the
Internet. The dial-in number for the conference call is 866 393.0571 or 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 May 15, 2013 at 855 859.2056 or
404 537.3406 (outside the U.S.); the conference ID # for the call is #
20442990. 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). The company defines net operating income (loss) 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) 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) if, in the company's opinion, they
are not indicative of overall operating trends.

While some of these items may be significant components of net income (loss)
available to Genworth's common stockholders in accordance with GAAP, the
company believes that net operating income (loss) and measures that are
derived from or incorporate net operating income (loss), including net
operating income (loss) 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) 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) have occurred in the past and could, and in some
cases will, recur in the future. Net operating income (loss) and net operating
income (loss) per common share on a basic and diluted basis are not
substitutes for net income (loss) available to Genworth's common stockholders
or net income (loss) available to Genworth'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) may differ
from the definitions used by other companies. There were no infrequent or
unusual non-operating items excluded from net operating income during the
periods presented in this press release. 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's common stockholders for the
three months ended March 31, 2013 and 2012.

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"
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
products; (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) new insurance written
for mortgage insurance; and (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. Sales do not include renewal premiums on
policies or contracts written during prior periods. The company considers
annualized first-year premiums/deposits, premium equivalents, new
premiums/deposits, 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.

Management regularly monitors and reports insurance in force and risk in
force. 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 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. Estimated savings related to claims
mitigation activities represent amounts deducted or "curtailed" from claims
due to acts or omissions by the servicer with respect to the servicing of an
insured loan that is not in compliance with obligations under our master
policy. 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.

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.

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, but not limited to, the following:

  oRisks relating to our businesses, including downturns and volatility in
    global economies and equity and credit markets; downgrades or potential
    downgrades in our financial strength or credit ratings; interest rate
    fluctuations and levels; adverse capital and credit market conditions;
    lack of credit facilities; the valuation of fixed maturity, equity and
    trading securities; defaults, downgrades or other events impacting the
    value of our fixed maturity securities portfolio; defaults on our
    commercial mortgage loans or the mortgage loans underlying our 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 and
    required increases to reserve liabilities; legal constraints on dividend
    distributions by our subsidiaries; competition; availability,
    affordability and adequacy of reinsurance; loss of key distribution
    partners; regulatory restrictions on our operations and changes in
    applicable laws and regulations; legal or regulatory investigations or
    actions; the failure of or any compromise of the security of our computer
    systems and confidential information contained therein; 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 accounting and reporting standards issued by the Financial Accounting
    Standards Board or other standard-setting bodies and insurance regulators;
    impairments of or valuation allowances against our deferred tax assets;
    changes in expected morbidity and mortality rate; accelerated amortization
    of deferred acquisition costs and present value of future profits; ability
    to increase premiums on certain in-force long-term care insurance products
    by enough or quickly enough, including the current rate actions and any
    future rate actions; 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; fluctuations in foreign exchange rates
    and international securities markets; 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 (GSEs) offering
    mortgage insurance; changes in international regulations reducing demand
    for mortgage insurance; increases in U.S. 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 our rescissions; the extent to which loan modifications and
    other similar programs may provide benefits to us; 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 our 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 our U.S.
    mortgage lending customers; legal actions under the Real Estate Settlement
    Procedures Act of 1974 (RESPA); and potential liabilities in connection
    with our U.S. contract underwriting services;
  oOther risks, including the risk that our strategy may not be successfully
    implemented; our Capital Plan may not achieve its anticipated benefits;
    adverse market or other conditions might delay or impede the minority sale
    of our mortgage insurance business in Australia; the possibility that in
    certain circumstances we will be obligated to make payments to General
    Electric Company (GE) under the tax matters agreement with GE even if our
    corresponding tax savings are never realized and payments could be
    accelerated in the event of certain changes in control; and provisions of
    our 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 our 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
                                                           March 31,
                                                           2013       2012
Revenues:
Premiums                                                   $  1,261   $ 1,106
Net investment income                                         814       832
Net investment gains (losses)                                 (61)      37
Insurance and investment product fees and other               289       340
                     Total revenues                           2,303     2,315
Benefits and expenses:
Benefits and other changes in policy reserves                 1,201     1,232
Interest credited                                             184       195
Acquisition and operating expenses, net of
         deferrals                                            433       440
Amortization of deferred acquisition costs and
         intangibles                                          122       271
Interest expense                                              126       95
                     Total benefits and expenses              2,066     2,233
Income from continuing operations before income taxes         237       82
Provision for income taxes                                    76        15
Income from continuing operations                             161       67
Income (loss) from discontinued operations, net of taxes      (20)      12
Net income                                                    141       79
Less: net income attributable to noncontrolling interests     38        33
Net income available to Genworth's
         common stockholders                               $  103     $ 46
Income from continuing operations available to
         Genworth's common stockholders
         per common share:
                     Basic                                 $  0.25    $ 0.07
                     Diluted                               $  0.25    $ 0.07
Net income available to Genworth's
         common stockholders per common share:
                     Basic                                 $  0.21    $ 0.09
                     Diluted                               $  0.21    $ 0.09
Weighted-average common shares outstanding:
                     Basic                                    492.5     491.2
                     Diluted                                  496.8     495.7



Reconciliation of Net Operating Income to Net Income
(Amounts in millions, except per share amounts)
                                                          Three months ended
                                                          March 31,
                                                          2013       2012
Net operating income (loss):
U.S. Life Insurance Division
           U.S. Life Insurance segment
                           Life Insurance                 $  36      $ 6
                           Long Term Care                    20        35
                           Fixed Annuities                   29        23
           Total U.S. Life Insurance segment                 85        64
           Total U.S. Life Insurance Division                85        64
Global Mortgage Insurance Division
           International Mortgage Insurance segment
                           Canada                            42        37
                           Australia                         46        (21)
                           Other Countries                   (7)       (9)
           Total International Mortgage Insurance segment    81        7
           U.S. Mortgage Insurance segment                   21        (44)
           Total Global Mortgage Insurance Division          102       (37)
Corporate and Other Division
           International Protection segment                  6         5
           Runoff segment                                    16        35
           Corporate and Other                               (58)      (50)
           Total Corporate and Other Division                (36)      (10)
Net operating income                                         151       17
Adjustments to net operating income:
Net investment gains (losses), net of taxes and other
           adjustments                                       (28)      17
Income (loss) from discontinued operations, net of taxes     (20)      12
Net income available to Genworth's
           common stockholders                               103       46
Add: net income attributable to noncontrolling interests     38        33
Net income                                                $  141     $ 79
Net income available to Genworth's
           common stockholders per common share:
                           Basic                          $  0.21    $ 0.09
                           Diluted                        $  0.21    $ 0.09
Net operating income per common share:
                           Basic                          $  0.31    $ 0.03
                           Diluted                        $  0.30    $ 0.03
Weighted-average common shares outstanding:
                           Basic                             492.5     491.2
                           Diluted                           496.8     495.7



Condensed Consolidated Balance Sheets
(Amounts in millions)
                                                       March 31,  December 31,
                                                       2013       2012
Assets
 Cash, cash equivalents and invested assets            $ 77,315   $   78,726
 Deferred acquisition costs                              5,050        5,036
 Intangible assets                                       346          366
 Goodwill                                                868          868
 Reinsurance recoverable                                 17,211       17,230
 Deferred tax and other assets                           706          710
 Separate account assets                                 10,140       9,937
 Assets associated with discontinued operations          439          439
     Total assets                                      $ 112,075  $   113,312
Liabilities and stockholders' equity
 Liabilities:
  Future policy benefits                               $ 33,601   $   33,505
  Policyholder account balances                          25,886       26,262
  Liability for policy and contract claims               7,343        7,509
  Unearned premiums                                      4,193        4,333
  Deferred tax and other liabilities                     6,160        6,746
  Borrowings related to securitization entities          329          336
  Non-recourse funding obligations                       2,062        2,066
  Long-term borrowings                                   4,766        4,776
  Separate account liabilities                           10,140       9,937
  Liabilities associated with discontinued operations    86           61
     Total liabilities                                   94,566       95,531
 Stockholders' equity:
  Common stock                                           1            1
  Additional paid-in capital                             12,131       12,127
  Accumulated other comprehensive income (loss):
     Net unrealized investment gains (losses):
      Net unrealized gains (losses) on securities not
               other-than-temporarily impaired           2,471        2,692
      Net unrealized gains (losses) on other-than-
               temporarily impaired securities           (28)         (54)
     Net unrealized investment gains (losses)            2,443        2,638
     Derivatives qualifying as hedges                    1,799        1,909
     Foreign currency translation and other              582          655
     adjustments
  Total accumulated other comprehensive income (loss)    4,824        5,202
  Retained earnings                                      1,966        1,863
  Treasury stock, at cost                                (2,700)      (2,700)
     Total Genworth's stockholders' equity               16,222       16,493
  Noncontrolling interests                               1,287        1,288
     Total stockholders' equity                          17,509       17,781
     Total liabilities and stockholders' equity        $ 112,075  $   113,312



Impact of Foreign Exchange on Operating Results^7
Three months ended March 31, 2013
                                          Percentages        Percentages
                                          Including Foreign  Excluding Foreign
                                          Exchange           Exchange^8
 Canada Mortgage Insurance (MI):
 Flow new insurance written               (6)        %       (6)        %
 Flow new insurance written (1Q13 vs.     (25)       %       (25)       %
 4Q12)
 Australia MI:
 Flow new insurance written               3          %       3          %
 Flow new insurance written (1Q13 vs.     (18)       %       (18)       %
 4Q12)



Reconciliation of Core Yield to Reported Yield
                                                                 For the three
                                                                 months ended
                                                                 March 31,
 (Assets - amounts in billions)                                  2013
 Reported Total Invested Assets and Cash                         $   76.5
 Subtract:
      Securities lending                                             0.2
      Unrealized gains (losses)                                      6.7
      Derivative counterparty collateral                             0.6
 Adjusted end of period invested assets                          $   69.0
 Average Invested Assets Used in Reported Yield Calculation      $   69.4
 Subtract:
      Restricted commercial mortgage loans and other invested
      assets related to securitization entities^9                    0.3
 Average Invested Assets Used in Core Yield Calculation          $   69.1
 (Income - amounts in millions)
 Reported Net Investment Income                                  $   814
 Subtract:
      Bond calls and commercial mortgage loan prepayments            10
      Reinsurance^10                                                 22
      Other non-core items^11                                        2
      Restricted commercial mortgage loans and other invested
      assets related to securitization entities^9                    4
 Core Net Investment Income                                      $   776
 Reported Yield                                                      4.69   %
 Core Yield                                                          4.49   %

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

^1Unless otherwise stated, all references in this press release to net
income, net income per share, book value, book value per share and
stockholders' equity should be read as net income available to Genworth's
common stockholders, net income 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 Company estimate for the first quarter of 2013, due to timing of the filing
of statutory statements.

^4 Percent change excludes the impact of foreign exchange.

^5 See "Definition of Selected Operating Performance Measures" for definition
of underwriting margin.

^6 Holding company cash and highly liquid securities comprises assets held in
Genworth Holdings, Inc. (the issuer of outstanding public company debt) which
is now a subsidiary of Genworth Financial, Inc.

^7 All percentages are comparing the first quarter of 2013 to the first
quarter of 2012 unless otherwise stated.

^8 The impact of foreign exchange was calculated using the comparable prior
period exchange rates.

^9 Represents the incremental assets and investment income related to
restricted commercial mortgage loans and other invested assets.

^10 Represents imputed investment income related to reinsurance agreements in
the lifestyle protection insurance business.

^11 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, 804 662.2248,
georgette.nicholas@genworth.com; or Media: Al Orendorff, 804 662.2534,
alfred.orendorff@genworth.com
 
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