Genworth MI Canada Inc. Reports First Quarter 2013 Earnings

First Quarter Net Operating Income of $85 million, Operating Diluted EPS of 
$0.86/share 
Normal Course Issuer Bid Announced 
TORONTO, April 30, 2013 /CNW/ - Genworth MI Canada Inc. (the "Company") (TSX: 
MIC) today reported first quarter 2013 net income of $88 million or $0.89 per 
diluted common share, and net operating income of $85 million or $0.86 
operating earnings per diluted common share. 
"We started 2013 with solid results that exceeded our expectations for the 
quarter," said Brian Hurley, Chairman and Chief Executive Officer. "We are 
also pleased to announce that our Board has authorized, a share repurchase 
through a normal course issuer bid. Our strong balance sheet allows us to 
return capital to our shareholders, while maintaining our financial 
flexibility going forward." 
First Quarter 2013 Key Financial Metrics: 
(Note: Comparisons to prior quarter exclude impact from exit fee reversal in 
the fourth quarter of 2012) 


    --  Net premiums written of $84 million were $33 million lower than
        the prior quarter and $5 million higher year-over-year.   The
        sequential decrease was primarily driven by typical winter
        seasonality.  The year-over-year increase reflects a higher
        market penetration by the Company in a smaller high
        loan-to-value mortgage insurance market and increased volumes
        of portfolio insurance on low loan-to-value mortgages.
    --  Net premiums earned of $144 million were $3 million lower as
        compared to the prior quarter and $2 million lower
        year-over-year.  The slightly lower premiums earned are
        primarily the result of continued aging of the older books.
    --  Losses on claims of $44 million were $2 million lower than the
        prior quarter due to fewer new reported delinquencies across
        most regions, particularly in Alberta.  On a year-over-year
        basis, losses on claims were $12 million lower, reflecting
        lower new reported delinquencies due to an improving economic
        environment.  This resulted in a loss ratio of 31% for the
        quarter, flat sequentially and 7 percentage points lower
        year-over-year.
    --  Net Investment income excluding realized gains of $45 million
        was $1 million lower than the prior quarter and $2 million
        higher year-over-year.  The decline in investment income
        continued to be reflective of lower reinvestment yields.
    --  Net operating income of $85 million was $4 million lower than
        the prior quarter primarily due to lower premiums earned and $9
        million higher year-over-year primarily as a result of lower
        losses on claim, which was partially offset by lower earned
        premiums.
    --  Operating return on equity was 12% for the quarter, 1
        percentage point lower than the prior quarter and flat
        year-over-year.
    --  The expense ratio, as a ratio of net premiums earned, was 18%. 
        This ratio was 1 percentage point lower than the prior quarter
        and flat year-over-year, but consistent with the Company's
        expected range.
    --  The unearned premium reserve was $1.7 billion at the end of the
        quarter.  These premiums will be earned over time in accordance
        with the Company's premium recognition curve which follows the
        Company's historical loss emergence pattern.
    --  The regulatory capital ratio or Minimum Capital Test ("MCT")
        ratio was approximately 216%, 6 percentage points higher than
        the Company's ratio as at January 1, 2013 and 31 points higher
        than its internal target MCT ratio of 185%.  The Company
        intends to operate with a MCT ratio above 190% to maintain
        financial flexibility.

First Quarter 2013 Key Highlights:

The Company continued to make solid progress towards its operational 
targets. As a result of its strategic efforts, the Company consistently 
remains the leader in the Canadian private mortgage insurance industry.
    --  Total new insurance written this quarter was $5.7 billion as
        compared to $8.5 billion in the prior quarter and 38% higher
        than the same period last year, primarily due to larger volumes
        of portfolio insurance.  The high loan-to-value component of
        new insurance written during the quarter was $3.3 billion,
        representing a decline of 25% from $4.4 billion in the fourth
        quarter of the prior year and a decline of 8% over the same
        quarter last year.  The sequential decline in volumes of high
        loan-to-value mortgages was attributed to a combination of
        seasonality and general housing market slowdown, while the
        year-over-year decline was attributed to insured product
        changes resulting from government guarantee product changes in
        July 2012.
    --  The Company insured $2.4 billion of low loan-to-value mortgage
        portfolios, lower than the prior quarter volume of $4.1
        billion, and $1.9 billion higher than the same period last
        year.  The premiums written in the quarter from insurance of
        low loan-to-value mortgage portfolios represented approximately
        13% of the Company's net premiums written.  The volume of
        portfolio insurance varies from quarter to quarter based on the
        needs of lenders. 
    --  The total delinquency rate based on original insurance in-force
        was 0.14%, flat to the prior quarter and 5 basis points lower
        than the same period last year.  The number of reported
        delinquencies declined modestly from the prior quarter,
        reflecting the aging of the 2007 and 2008 books, improving
        economic conditions and portfolio quality in combination with
        ongoing success of the Company's proactive loss mitigation
        strategies.
    --  The Company's investment portfolio had a market value of $5.3
        billion at the end of the quarter.  During the quarter, the
        Company's formerly segregated government guarantee fund
        investment portfolio was combined with the Company's general
        investment portfolio. The portfolio had a pre-tax equivalent
        book yield of 3.7% and duration of 3.6 years as at March 31,
        2013.
    --  As part of an ongoing effort to improve its estimate of the
        outstanding insurance exposure, the Company recently surveyed
        its largest customers and obtained the amount of the
        outstanding balances.  As a result, the Company estimates that
        the outstanding balance of insured mortgages was approximately
        $150 billion as at December 31, 2012 and believes that this
        does not have an impact on the premium recognition curve, which
        is based on the pattern of loss emergence.  Under the $300
        billion outstanding insurance cap for private mortgage insurers
        as set by the Minister of Finance, the Company believes that
        the private sector industry has ample remaining capacity.

The Company was also pleased to announce today that its Board of Directors has 
authorized a normal course issuer bid ("NCIB") to purchase up to 4,937,078 
shares, representing approximately 5% of its outstanding common shares. As 
at April 29, 2013, there were 98,741,567 shares issued and outstanding. 
Under the terms of the NCIB, the Company will purchase the common shares for 
cancellation on the open market, including from the Company's major 
shareholder, Genworth Financial, Inc. Purchases of common shares may 
commence on May 3, 2013 and will expire on the earlier of May 2, 2014 and the 
date on which the Company has purchased the maximum number of shares under the 
NCIB. The Company's major shareholder, Genworth Financial Inc., is expected 
to maintain its 57.4% ownership interest in the Company throughout the course 
of the NCIB.

Dividends

On March 15, 2013, the Company paid a quarterly dividend of $0.32 per common 
share.

The Company also announced today that its Board of Directors approved a 
dividend payment of $0.32 per common share, payable on May 31, 2013 to 
shareholders of record at the close of business on May 15, 2013.

Shareholders' Equity

As of March 31, 2013, shareholders' equity was $3.1 billion representing a 
book value of $31.32 per common share on a fully diluted basis. Excluding 
accumulated other comprehensive income ("AOCI") or loss, shareholders' equity 
was $2.9 billion or a book value of $28.99 per common share on a fully diluted 
basis.

Detailed Operating Results and Financial Supplement

For more information on the Company's operating results, please refer to the 
Company's Management's Discussion and Analysis as posted on SEDAR and 
available at www.sedar.com.

This press release, the financial statements, Management's Discussion and 
Analysis, and the first quarter 2013 financial supplement are also posted on 
the investor section of the Company's website 
(http://investor.genworthmicanada.ca). Investors are encouraged to review 
all of these materials.

Earnings Call

The Company's first quarter earnings call will be held on May 1, 2013 at 10:30 
am ET (Local: 416-644-3414, Toll free: 1-800-814-4859). The call is 
accessible via telephone and by audio webcast on the Company's website. 
Slides to accompany the call will be posted just prior to its start. A 
replay of the call will be available until June 1, 2013 (Local: 416-640-1917, 
Toll Free: 1-877-289-8525 Access Code 4611636#). Participants are encouraged 
to pre-register for the webcast through the Company's website. A replay of the 
call will also be available from the Company's website for a period of at 
least 45 days following the conference call.

About Genworth MI Canada Inc.

Genworth MI Canada Inc. (TSX: MIC) through its subsidiary, Genworth Financial 
Mortgage Insurance Company Canada (Genworth Canada), is the largest private 
residential mortgage insurer in Canada. The Company provides mortgage 
default insurance to Canadian residential mortgage lenders, making 
homeownership more accessible to first-time homebuyers. Genworth Canada 
differentiates itself through superior customer service, innovative processing 
technology, and a robust risk management framework. For almost two decades, 
Genworth Canada has supported the housing market by providing thought 
leadership and a focus on the safety and soundness of the mortgage finance 
system. As at March 31, 2013, Genworth Canada had $5.7 billion total assets 
and $3.1 billion shareholders' equity. Find out more at www.genworth.ca.

Consolidated Financial Highlights

 ____________________________________________________________________
|                                       |Three Months Ended March 31 |
|($ millions, except per share amounts) |        (Unaudited)         |
|                                       |____________________________|
|                                       |  2013 |            2012    |
|_______________________________________|_______|____________________|
|New Insurance Written                  |  5,685|              $4,106|
|_______________________________________|_______|____________________|
|Insurance In Force                     |289,757|             268,726|
|_______________________________________|_______|____________________|
|Net Premiums Written                   |     84|                  79|
|_______________________________________|_______|____________________|
|Net Premiums Earned                    |    144|                 147|
|_______________________________________|_______|____________________|
|Losses on Claims                       |     44|                  56|
|_______________________________________|_______|____________________|
|Investment Income (Interest and        |       |                    |
|Dividends, net of expenses)( 1)        |     45|                  43|
|_______________________________________|_______|____________________|
|Realized and Unrealized Gains or Losses|       |                    |
|on Investments                         |      4|                   6|
|_______________________________________|_______|____________________|
|Total investment income                |     50|                  50|
|_______________________________________|_______|____________________|
|Net Income                             |     88|                  81|
|_______________________________________|_______|____________________|
|Net Operating Income(1)                |     85|                  76|
|_______________________________________|_______|____________________|
|Fully Diluted Earnings Per Share       |  $0.89|               $0.82|
|_______________________________________|_______|____________________|
|Fully Diluted Operating Earnings Per   |       |                    |
|Share(1)                               |  $0.86|               $0.77|
|_______________________________________|_______|____________________|
|Fully Diluted Book Value Per Common    |       |                    |
|Share, including AOCI                  | $31.32|              $27.31|
|_______________________________________|_______|____________________|
|Fully Diluted Book Value Per Common    |       |                    |
|Share, excluding AOCI(1)               | $28.99|              $25.30|
|_______________________________________|_______|____________________|
|Loss Ratio                             |    31%|                 38%|
|_______________________________________|_______|____________________|
|Combined Ratio                         |    49%|                 56%|
|_______________________________________|_______|____________________|
|Operating Return on Equity(1)          |    12%|                 12%|
|_______________________________________|_______|____________________|
|Minimum Capital Test Ratio (MCT)       |   216%|                159%|
|_______________________________________|_______|____________________|

(1 )This is a financial measure not calculated based on International 
Financial Reporting Standards ("IFRSs").
See the "IFRSs and Non-IFRSs Financial Measures" section of this press release 
for additional information.

IFRSs and Non-IFRSs Financial Measures

The Company's consolidated financial statements are prepared in accordance 
with IFRSs. To supplement its financial statements, the Company uses select 
non-IFRSs financial measures. Non-IFRSs measures used by the Company to 
analyze performance include underwriting ratios such as loss ratio, expense 
ratio and combined ratio, as well as other performance measures such as net 
operating income and return on operating income. Other non-IFRSs measures used 
by the Company include shareholders' equity, insurance in-force, new insurance 
written, MCT ratio, delinquency ratio, severity on claims paid, operating 
earnings per common share of the Company (basic and diluted), book value per 
common share (basic and diluted; including and excluding AOCI), dividends paid 
per common share of the Company, and portfolio duration. The Company believes 
that these non-IFRSs financial measures provide meaningful supplemental 
information regarding its performance and may be useful to investors because 
they allow for greater transparency with respect to key metrics used by 
management in its financial and operational decision making. Non-IFRSs 
measures do not have standardized meanings and are unlikely to be comparable 
to any similar measures presented by other companies. These measures are 
defined in the Company's glossary, which is posted on the investor section of 
the Company's website. To access the glossary, click on the "Glossary of 
Terms" link under "Investor Resources" subsection on the left navigation 
bar. A reconciliation of non-IFRSs financial measures to the most recently 
comparable measures calculated in accordance with IFRSs can be found in 
Management's Discussion and Analysis filed with the Company's most recent 
financial statements, which are available on the Company's website and on 
SEDAR at www.sedar.com.

Cautionary Note Regarding Forward-Looking Statements

This press release includes certain forward-looking statements. These 
forward-looking statements include, but are not limited to, the Company's 
plans, objectives, expectations and intentions, and other statements contained 
in this release that are not historical facts. These statements may be 
identified by their use of words such as "may", "would", "could", "will", 
"intend", "plan", "anticipate", "believe", "seek", "propose", "estimate", 
"expect", or similar expressions, as they relate to the Company are intended 
to identify forward-looking statements. Specific forward-looking statements 
in this document include, but are not limited to, statements with respect to 
the Company's expectations regarding the effect of the Canadian government's 
new government guarantee legislative framework, the effect of the changes to 
the government guarantee mortgage eligibility rules, the timing and extent of 
repurchases of the Company's common shares under the NCIB, and the Company's 
beliefs as to housing demand and home price appreciation, unemployment rates, 
the Company's future operating and financial results, sales expectations 
regarding premiums written, capital expenditure plans, dividend policy and the 
ability to execute on its future operating, investing and financial 
strategies. These statements are inherently subject to significant risks, 
uncertainties and changes in circumstances, many of which are beyond the 
Company's control. The Company's actual results may differ materially from 
those expressed or implied by such forward-looking statements, including as a 
result of changes in global, political, economic, business, competitive, 
market and regulatory factors, and the other risks described in the Company's 
Annual Information Form. Other than as required by applicable laws, the 
Company undertakes no obligation to publicly update or revise any 
forward-looking statement, whether as a result of new information, future 
developments or otherwise.

Contact Information:

Investors - Samantha Cheung, 905-287-5482samantha.cheung@genworth.com 
Media- Lisa Azzuolo, 905-287-5520lisa.azzuolo@genworth.com

SOURCE: Genworth MI Canada

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CO: Genworth MI Canada
ST: Ontario
NI: REL ERN CONF 

-0- Apr/30/2013 21:09 GMT


 
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