Genworth MI Canada Inc. Reports Solid Second Quarter 2013 Earnings

Genworth MI Canada Inc. Reports Solid Second Quarter 2013 Earnings 
Second Quarter Net Operating Income of $88 million, 11% higher year-over-year
Operating Diluted EPS of $0.89/share, 13% higher year-over-year 
TORONTO, July 30, 2013 /CNW/ - Genworth MI Canada Inc. (the "Company") (TSX: 
MIC) today reported second quarter 2013 net income of $98 million or $1.00 per 
diluted common share, and net operating income of $88 million or $0.89 
operating earnings per diluted common share. As compared to the prior 
quarter, net income this quarter was 11% or $10 million higher while net 
operating income was 4% or $3 million higher. As compared to the second 
quarter 2012, net income this quarter was 24% or $19 million higher and net 
operating income was 11% or $9 million higher. 
"Our business continues to perform well," said Brian Hurley, Chairman and 
Chief Executive Officer. "A balanced housing market, stable economic climate 
and strong portfolio quality have all contributed to the positive trends in 
our business, in particular our loss performance." 
Second Quarter 2013 Key Financial Metrics: 

    --  Net premiums written of $137 million were $53 million, or 63%,
        higher than the prior quarter and $39 million lower
        year-over-year.   The sequential increase was primarily driven
        by seasonally higher volumes resulting from the spring housing
        market.  The year-over-year decrease reflects a smaller high
        loan-to-value mortgage insurance market as compared to last
        year and lower volumes of portfolio insurance on low
        loan-to-value mortgages.
    --  Net premiums earned of $143 million were $1 million lower as
        compared to the prior quarter and $5 million lower
        year-over-year. The lower premiums earned on a year-over-year
        basis are primarily the result of continued aging of the 2008
        and prior year books.
    --  Losses on claims of $35 million were $9 million lower than the
        prior quarter primarily due to fewer new reported delinquencies
        across most regions.  On a year-over-year basis, losses on
        claims were $13 million lower, reflecting lower new reported
        delinquencies due to an improving economic environment,
        seasonality, and strong credit quality of the recent books. 
        This resulted in a loss ratio of 25% for the quarter as
        compared to 32% in the same quarter in the prior year.  The
        loss performance was 6 percentage points lower sequentially and
        8 percentage points lower year-over-year.
    --  Net Investment income excluding realized gains of $44 million
        was $1 million lower than the prior quarter and $5 million
        higher year-over-year.  The sequential decline in investment
        income during the current year continues to reflect  lower
        reinvestment yields.  The prior year period included $7 million
        of exit fees related to the government guarantee fund which was
        eliminated on January 1, 2013.
    --  Net operating income of $88 million was $3 million higher
        relative to the prior quarter and $9 million higher
        year-over-year primarily as a result of lower losses on claims,
        which was partially offset by lower earned premiums.
    --  Operating return on equity was 12% for the quarter, unchanged
        from the prior quarter and flat year-over-year.
    --  The expense ratio, as a ratio of net premiums earned, was 18%. 
        This ratio was flat to the prior quarter and 1 percentage point
        higher 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%, unchanged from the last quarter
        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.

Second Quarter 2013 Key Highlights:
    --  The high loan-to-value component of new insurance written
        during the quarter was $4.8 billion, representing an increase
        of 48% from $3.3 billion in the prior quarter and a decline of
        16% over the same quarter in the prior year.  The sequential
        increase of $1.6 billion in the high loan-to-value component
        was primarily due to seasonally higher volumes experienced
        during the spring. The year-over-year decline is consistent
        with the anticipated decline in market size from regulatory
    --  During the quarter, the Company insured $6.5 billion of low
        loan-to-value mortgage portfolios, $4.1 billion higher than the
        prior quarter volume of $2.4 billion, and $6.6 billion lower
        than the same period last year.  The volume of portfolio
        insurance varies from quarter to quarter based on the needs of
    --  On an aggregate basis, total new insurance written this quarter
        was $11.3 billion as compared to $5.7 billion in the prior
        quarter and $18.8 billion during the same quarter in the prior
    --  The net premiums written in the quarter from insurance of high
        loan-to-value mortgage portfolios was $111 million or 81% of
        the Company's net premiums written.  On a comparative basis,
        the high loan-to-value component comprised 87% of net premiums
        written in the prior quarter and 74% in the prior year.  
        Premiums written from high loan-to-value mortgages represented
        an increase of $38 million or 52% higher than the prior quarter
        and $20 million or 14% lower than the same period in the prior
        year, in line with the Company's expectation given regulatory
    --  The number of reported delinquencies declined to 1,778 from
        2,408 in the prior year, reflecting an improvement of 26%.  The
        lower number of delinquencies results from higher credit
        quality in the portfolio and improving economic conditions
        across most regions in combination with ongoing success of the
        Company's proactive loss mitigation strategies.    The total
        delinquency rate based on original insurance in-force was
        0.12%, 2 basis points lower than the prior quarter and 5 basis
        points lower than the same period last year.
    --  During the quarter, the Company commenced a normal course
        issuer bid under which the Company may purchase up to an
        aggregate of 4,937,078 common shares over a period of 12 months
        ending May 2, 2014.  As at June 30, 2013, the Company has
        purchased and cancelled 2,010,474 of its common shares with an
        aggregate value of approximately $50 million, inclusive of
        shares repurchased from Genworth Financial, Inc., which allowed
        them to maintain their proportional ownership.
    --  The Company's investment portfolio had a market value of $5.3
        billion at the end of the quarter.  The portfolio had a pre-tax
        equivalent book yield of 3.6% and duration of 3.6 years as at
        June 30, 2013.  As a result of ongoing portfolio management,
        the Company had realized investment gains of $15 million
        primarily due to sales of equities.


On May 31, 2013, the Company paid a quarterly dividend of $0.32 per common 

The Company also announced today that its Board of Directors approved a 
dividend payment of $0.32 per common share, payable on August 30, 2013 to 
shareholders of record at the close of business on August 15, 2013.

Shareholders' Equity

As of June 30, 2013, shareholders' equity was $3.0 billion representing a book 
value of $30.94 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 $29.55 per common share on a fully diluted 

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

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

Earnings Call

The Company's second quarter earnings call will be held on July 31, 2013 at 
10:00 am ET (Local: 416-644-3415, Toll free: 1-877-974-0445, #4628573). 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 August 31, 2013 (Local 
416-640-1917, Toll Free 1-877-289-8525, Access Code 4628573#). 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 customer service excellence, 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 June 30, 2013, Genworth Canada had $5.6 billion total assets 
and $3.0 billion shareholders' equity. Find out more at

Consolidated Financial Highlights

                                       Three Months Ended June 30
($ millions, except per share amounts)             (Unaudited) 
                                           2013            2012 
New Insurance Written                          11,312          $18,833 
Insurance In Force                            299,953          286,343 
Net Premiums Written                              137              176 
Net Premiums Earned                               143              148 
Losses on Claims                                   35               48 
Investment Income (Interest and Dividends,
net of expenses)( 1)                               44               40 
Realized and Unrealized Gains or Losses on
Investments                                        15                - 
Total investment income                            59               40 
Net Income                                         98               79 
Net Operating Income(1)                            88               79 
Fully Diluted Earnings Per Share                $1.00            $0.79 
Fully Diluted Operating Earnings Per Share
(1)                                             $0.89            $0.79 
Fully Diluted Book Value Per Common Share,
including AOCI                                 $30.94           $27.88 
Fully Diluted Book Value Per Common Share,
excluding AOCI(1)                              $29.55           $25.81 
Basic weighted average common shares
outstanding                                98,200,843       98,678,960 
Diluted weighted average common shares
outstanding                                98,453,184       98,915,552 
Loss Ratio                                        25%              32% 
Combined Ratio                                    43%              49% 
Operating Return on Equity(1)                     12%              12% 
Minimum Capital Test Ratio (MCT)                 216%             160% 
(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 excluding AOCI, 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 
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, 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, 
Media- Lisa Azzuolo, 
SOURCE: Genworth MI Canada 
To view this news release in HTML formatting, please use the following URL: 
CO: Genworth MI Canada
ST: Ontario
-0- Jul/30/2013 21:10 GMT
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