Genworth Financial Announces Second Quarter 2013 Results

           Genworth Financial Announces Second Quarter 2013 Results

Net Income Improved 86 Percent From Prior Year

Second Profitable Quarter In U.S. MI

$273 Million In Dividends Paid To Holding Company Including $100 Million
Ordinary Dividend From U.S. Life Companies

PR Newswire

RICHMOND, Va., July 30, 2013

RICHMOND, Va., July 30, 2013 /PRNewswire/ --Genworth Financial, Inc. (NYSE:
GNW) today reported results for the second quarter of 2013. The company
reported net income^1 of $141 million, or $0.28 per diluted share, compared
with net income of $76 million, or $0.16 per diluted share, in the second
quarter of 2012. Net operating income^2 for the second quarter of 2013 was
$133 million, or $0.27 per diluted share, compared with net operating income
of $67 million, or $0.14 per diluted share, in the second quarter of 2012.

"We are beginning to seegood results from our efforts to improve the
operating performance of the businesses with strong performance in Global
Mortgage Insurance,further progress on long term care insurance rate actions
and execution of an expense reduction plan," said Tom McInerney, President and
CEO. "We continue to increase financial flexibility with an ordinary dividend
from the U.S. life companies and consistent dividends from Global Mortgage
Insurance. These are some of the important milestones in our plan to turn the
company around."



Consolidated Net Income &
Net Operating Income
                                            Three months ended June 30
                                            (Unaudited)
                                            2013              2012
                                                     Per               Per
                                            Total    diluted  Total    diluted
(Amounts in millions, except per share)              share             share
Net income                                  $ 141    $  0.28  $ 76     $  0.16
Net operating income                        $ 133    $  0.27  $ 67     $  0.14
Weighted average diluted shares               497.5             493.9
Book value per share                        $ 29.76           $ 32.08
Book value per share, excluding
accumulated
      other comprehensive income (loss)     $ 23.39           $ 22.61



Net investment gains, net of tax and other adjustments, were $15 million in
the quarter compared to net investment losses of $18 million in the prior
year. Total investment impairments, net of tax, were $4 million in the current
quarter and $27 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 $6
million of income from discontinued operations. The company expects the
transaction to close in the third quarter of 2013, subject to customary
closing conditions, including requisite regulatory approvals, and may record
an additional after-tax loss of up to $10 million at that time. Assets under
management as of June 30, 2013 for the wealth management business were $22.6
billion.

On June 6, 2013, the company announced an expense reduction plan as it
continues to work on improving the operating performance of its businesses.
This plan eliminated approximately 400 positions, including 150 open positions
that will not be filled, and will reduce related information technology and
program spend. When fully implemented, the company expects to realize
approximately $80 to $90 million in annual pre-tax expense savings primarily
related to these actions. Overall expense levels may vary for a variety of
reasons, including changes in sales volume or other strategic actions the
company may take. An after-tax non-operating charge of $13 million was
recorded in the second quarter of 2013 reflecting severance, outplacement and
other associated costs.

Net operating income results are summarized in the table below:



Net Operating Income (Loss)
(Amounts in millions)                      Q2 13   Q1 13   Q2 12
U.S. Life Insurance Division:
 U.S. Life Insurance                       $ 79    $ 85    $ 64
 Total U.S. Life Insurance Division          79      85      64
Global Mortgage Insurance Division:
 International Mortgage Insurance            89      81      76
 U.S. Mortgage Insurance (U.S. MI)           13      21      (25)
 Total Global Mortgage Insurance Division    102     102     51
Corporate and Other Division:
 International Protection                    1       6       3
 Runoff                                      6       16      (6)
 Corporate and Other                         (55)    (58)    (45)
 Total Corporate and Other Division          (48)    (36)    (48)
Total Net Operating Income                 $ 133   $ 151   $ 67



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 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 second quarter of 2013 was an unfavorable impact of $2 million versus
the prior quarter and prior year.

U.S. Life Insurance Division
U.S. Life Insurance Division net operating income was $79 million, compared
with $85 million in the prior quarter and $64 million a year ago.



U.S. Life Insurance Division
Net Operating Income
(Amounts in millions)      Q2 13     Q1 13     Q2 12
U.S. Life Insurance
 Life Insurance            $ 27      $ 36      $ 30
 Long Term Care Insurance    26        20        14
 Fixed Annuities             26        29        20
Total U.S. Life Insurance    79        85        64
Total U.S. Life Insurance  $ 79      $ 85      $ 64
Sales
(Amounts in millions)      Q2 13     Q1 13     Q2 12
U.S. Life Insurance
 Life Insurance
    Term Life              $ 4       $ 4       $ —
    Term Universal Life      —         1         32
    Universal Life           5         9         19
    Linked Benefits          3         2         3
 Long Term Care Insurance
    Individual               38        35        53
    Group                    5         5         7
 Fixed Annuities             212       107       336
Account Value
(Amounts in millions)      Q2 13     Q1 13     Q2 12
Fixed Annuities            $ 17,949  $ 18,301  $ 18,437



U.S. Life Insurance Division

Highlights

  oU.S. Life Insurance Division net operating income was $79 million,
    compared with $85 million in the prior quarter and $64 million a year
    ago.
  oCompared to the prior quarter, sales of life insurance products were down,
    and below expectations, because of flat sales in term life insurance and a
    decline in universal life insurance products sales, but modestly higher in
    long term care insurance and fixed annuities.
  oConsolidated risk-based capital (RBC) ratio is estimated to be
    approximately 445 percent^3, down from approximately 450 percent at the
    end of the first quarter of 2013.
  oOrdinary dividend of $100 million was paid to the holding company through
    June 30, 2013.

Life Insurance
Life insurance net operating income was $27 million, compared with $36 million
in the prior quarter and $30 million in the prior year. While results in the
current quarter benefited from favorable mortality experience versus pricing
expectations, mortality was less favorable than the prior quarter and prior
year because of higher severity. Sales were down $4 million versus the prior
quarter and $42 million versus the prior year reflecting flat sales in term
life insurance and a decline in universal life insurance product sales. The
company will continue to make pricing and product changes that would be
expected to increase sales over time.

Long Term Care Insurance
Long term care insurance net operating income was $26 million, compared with
$20 million in the prior quarter and $14 million in the prior year. Results in
the prior quarter included $6 million of net favorable actuarial reserve and
other adjustments. Results in the quarter were improved versus the prior
quarter from more favorable limited partnership and bond call performance.
Results in the quarter also reflected the impact of higher premiums and
reduced benefits from the most recent rate action of $8 million versus the
prior quarter. Relative to the prior year, higher claim termination rates
contributed to lower incurred losses, the most recent rate action contributed
to higher premiums and reduced benefits, and investment yields declined
consistent with the low interest rate environment.

In the second quarter of 2013, the company revised its methodology for
calculating tabular interest for its long term care insurance policies.The
change in the calculation for tabular interest had no impact on total
policyholder reserves,benefits or net operating income as it reflected a
reclassification between components within the total change in policy
reserves.Tabular interest is one of several components that make up the total
change in policy reserves and represents the implicit credited rate to
reserves for future benefits. This calculation is now done at the policy level
and effectively attributes a larger portion of the change in reserves to
tabular interest. The impact of this new methodology reduced the loss ratio by
approximately three points in the current quarter. The loss ratio for all
prior periods has been adjusted lower by three points to approximate the new
calculation for tabular interest to make prior periods more comparable with
the current calculation. The reported loss ratio for the current quarter was
approximately 67 percent, approximately one point higher than the prior
quarter and four points lower than the prior year, when reflecting this change
in methodology.

Individual long term care insurance sales increased from the prior quarter to
$38 million reflecting product actions taken in the first half of 2013. These
changes may have a temporary benefit on sales levels as demand increasedprior
to pricing and product changes going into effect. The company continues to
utilize reinsurance in long term care insurance as part of its capital
optimization strategies.

As previously announced in the third quarter of 2012, the company filed for
long term care in force premium rate increases with the goal of achieving
approximately $200 to $300 million of additional annual premiums when fully
implemented over the next five years. As of June 30, 2013, the company has
received approvals representing approximately $115 to $120 million of the
targeted premium increase.

Fixed Annuities
Fixed annuities net operating income was $26 million, compared with $29
million in the prior quarter and $20 million in the prior year. Results in the
quarter included unfavorable mortality versus the prior quarter and more
favorable mortality versus the prior year. Results in the quarter also
included improved limited partnership and bond call performance versus the
prior quarter. Sales in the quarter totaled $212 million and were up
sequentially but down from the prior year.

U.S. Life Companies Capital
The consolidated risk-based capital (RBC) ratio is estimated to be
approximately 445 percent^3, down from approximately 450 percent at the end of
the first quarter of 2013, primarily from the $100 million ordinary dividend
paid to the holding company.

Global Mortgage Insurance Division

Global Mortgage Insurance Division had net operating income of $102 million,
consistent with the prior quarter and up from $51 million in the prior year.



Global Mortgage Insurance Division
Net Operating Income (Loss)
(Amounts in millions)                   Q2 13  Q1 13  Q2 12
International Mortgage Insurance
         Canada                         $ 43   $ 42   $ 41
         Australia                        55     46     44
         Other Countries                  (9)    (7)    (9)
Total International Mortgage Insurance    89     81     76
U.S. Mortgage Insurance                   13     21     (25)
Total Global Mortgage Insurance         $ 102  $ 102  $ 51
Sales
(Amounts in billions)                   Q2 13  Q1 13  Q2 12
International Mortgage Insurance
         Flow
                 Canada                 $ 4.7  $ 3.3  $ 5.7
                 Australia                8.7    7.9    8.2
                 Other Countries          0.4    0.4    0.5
         Bulk
                 Canada                   6.4    2.4    13.1
                 Australia                0.9    —      0.3
                 Other Countries          —      —      —
U.S. Mortgage Insurance
         Primary Flow                     6.3    4.7    3.6
         Primary Bulk                     —      —      —



International Mortgage Insurance Segment

Highlights

  oReported International Mortgage Insurance segment operating earnings were
    $89 million, compared with $81 million in the prior quarter and $76
    million a year ago.
  oReported Canada operating earnings of $43 million were up from $42 million
    in the prior quarter and up from $41 million in the prior year.
  oReported Australia operating earnings of $55 million were up from $46
    million in the prior quarter and up from $44 million in the prior year.
    
  oOther Countries had a reported net operating loss of $9 million, compared
    to $7 million in the prior quarter and $9 million in the prior year.
  oIn Canada, flow new insurance written (NIW) was up 45 percent^4
    sequentially and down 16 percent^4 year over year. In addition, in the
    current quarter the company completed $6.4 billion of bulk transactions,
    consisting of low loan-to-value prime loans.
  oIn Australia, flow NIW was up 13 percent^4 sequentially and up seven
    percent^4 year over year.
  oThe Canadian and Australian businesses continue to maintain sound capital
    positions.
  oDividends of $143 million, including proceeds relating to Genworth MI
    Canada Inc.'s share repurchase program, were paid to the holding company
    through June 30, 2013.

Canada Mortgage Insurance
Canada operating earnings of $43 million were up from $42 million in the prior
quarter and up from $41 million in the prior year. The loss ratio in the
quarter was 25 percent, down six points from the prior quarter and down seven
points from the prior year from lower net new delinquencies as a result of an
improving economic environment and the strong credit quality of recent books.
Total delinquencies were down nine percent sequentially from the maturing of
the larger 2007 and 2008 books of business, continued strong loss mitigation
and improving economic conditions in most regions. Improvement in losses was
partially offset by lower premiums and unfavorable foreign exchange. Flow NIW
was up 45 percent^4 ^ sequentially from normal seasonal variation and down 16
percent^4 year over year primarily from regulatory changes to the rules
governing the issuance of high loan-to-value residential mortgages made in
July 2012. In addition, the company completed several bulk transactions,
consisting of low loan-to-value prime loans, of approximately $6.4 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 $2.9
billion, of which $1.7 billion represented Genworth's 57.4 percent ownership
interest. GAAP book value declined $0.1 billion from the prior quarter
primarily from foreign currency translation and lower net unrealized
investment gains.

Australia Mortgage Insurance
Australia reported net operating earnings of $55 million versus $46 million in
the prior quarter and $44 million in the prior year. The loss ratio in the
quarter was 35 percent, down 12 points sequentially and down 19 points from
the prior year. Total delinquencies were down one percent sequentially as
higher new delinquencies were more than offset by seasonally higher cures.
Flow NIW was up 13 percent^4 sequentially from seasonal variation and up seven
percent^4 year over year from a larger origination market. At quarter end, the
Australia mortgage insurance business had a regulatory capital ratio of 134
percent^3, in excess of regulatory requirements. The GAAP book value was $1.9
billion as of the end of the quarter, declining $0.4 billion from the prior
quarter primarily from foreign currency translation.

Other Countries Mortgage Insurance
Other Countries had a net operating loss of $9 million, compared to a net
operating loss of $7 million in the prior quarter and a net operating loss of
$9 million in the prior year as the business continues to be pressured from
elevated losses, primarily in Ireland.

U.S. Mortgage Insurance Segment

Highlights

  oU.S. MI net operating income was $13 million, compared with $21 million in
    the prior quarter and a net operating loss of $25 million in the prior
    year from continued improvement in the U.S. housing market and lower new
    delinquencies.
  oFlow NIW increased 34 percent from the prior quarter and increased 75
    percent over the prior year to $6.3 billion.
  oThe combined risk-to-capital ratio as of June 30, 2013 is estimated at
    22.4:1^3, reflecting the $100 million capital contribution to Genworth
    Mortgage Insurance Corporation (GMICO) on April 1, 2013 to U.S. MI as part
    of the completion of the comprehensive capital plan.

Total flow delinquencies decreased seven percent sequentially and 23 percent
versus the prior year. New flow delinquencies decreased approximately 11
percent from the prior quarter and decreased approximately 22 percent from the
prior year, reflecting the continued burn through of delinquencies from the
2005 to 2008 book years. The flow average reserve per delinquency was
$30,000, up slightly from the prior quarter.

Total losses were up $13 million compared to the prior quarter as lower new
delinquencies were more than offset by modest changes in net cures and aging
because of sequentially lower cures.

Loss mitigation savings were $144 million in the quarter, down $15 million
from the prior quarter. Loss mitigation savings this year through June 30,
2013 were $303 million.

Flow NIW of $6.3 billion increased 34 percent over the prior quarter and
increased 75 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 up approximately one point from the prior quarter and
up approximately two points year over year. The company's estimate ofmarket
share at the end of the quarter is approximately 13 percent. Flow persistency
was 81 percent. In addition, the Home Affordable Refinance Program (HARP)
accounted for about $2.2 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 22.4:1^3
at the end of the second quarter with the risk-to-capital ratio for GMICO
estimated at 23.8:1^3. GMICO currently maintains waivers or other
authorizations from 45 states that permit the company to continue writing new
business if 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 GSE's (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.

The company currently expects the U.S. mortgage insurance business to be
modestly profitable in 2013 and expects that its 2014 results should improve
over 2013. The company continues to expect seasonality in the remainder of
2013, which could cause the second half of the year to return to a marginal
net loss profile. Its profitability expectations are subject to the continued
recovery of the U.S. housing market, the extent ofseasonality that has been
historically experienced in the second half of the year, and certain other
items such as the cost of resolution of pending litigation.

Corporate and Other Division

Corporate and Other Division net operating loss was $48 million, compared with
$36 million in the prior quarter and $48 million in the prior year.



Corporate and Other Division
Net Operating Income (Loss)
(Amounts in millions)                                Q2 13    Q1 13    Q2 12
International Protection                             $ 1      $ 6      $ 3
Runoff                                                 6        16       (6)
Corporate and Other                                    (55)     (58)     (45)
Total Corporate and Other                            $ (48)   $ (36)   $ (48)
Account Value
(Amounts in millions)                                Q2 13    Q1 13    Q2 12
Variable Annuities                                   $ 7,877  $ 8,177  $ 8,225
Guaranteed Investment Contracts, Funding Agreements
         Backing Notes and Funding Agreements          1,077    1,970    2,221



International Protection Segment
International Protection reported operating earnings of $1 million, compared
with $6 million in the prior quarter and $3 million in the prior year. The
business continues to be impacted by the slow consumer lending environment in
Europe, and high unemployment in Southern Europe continues to keep losses
elevated. At quarter end, the lifestyle protection business had a regulatory
capital ratio of approximately 317 percent^3, in excess of regulatory
requirements. Dividends of $14 million were paid to the holding company during
the second quarter of 2013.

Runoff Segment
The Runoff segment's net operating income was $6 million, compared with $16
million in the prior quarter and a net operating loss of $6 million in the
prior year. Results in the current quarter reflected less favorable equity
market conditions versus the prior quarter, but more favorable versus the
prior year. Results in the prior quarter and prior year reflected unfavorable
taxes.

Corporate and Other

Corporate and Other's net operating loss was $55 million, compared with $58
million in the prior quarter and $45 million in the prior year. Results were
down versus the prior year because of lower net investment income. Results in
the prior quarter and prior year also included the reverse mortgage business
that was sold on April 1, 2013.

Investment Portfolio Performance

Net investment income increased to $821 million, compared to $814 million in
the prior quarter because of favorable limited partnership and bond call
performance. The reported yield for the current quarter was approximately 4.8
percent. The core yield^2 was flat to the prior quarter at approximately 4.5
percent.

Net income in the quarter included $15 million of net investment gains, net of
tax and DAC amortization of $5 million. Total investment impairments, net of
tax, were $4 million in the current quarter and $27 million in the prior year.

Net unrealized investment gains were $1.3 billion, net of tax and other items,
as of June 30, 2013 compared with $2.0 billion as of June 30, 2012 and $2.4
billion as of March 31, 2013 because of higher interest rates and widening
spreads. The fixed maturity securities portfolio had gross unrealized
investment gains of $4.0 billion compared with $5.9 billion as of June 30,
2012 because of higher interest rates and widening spreads and gross
unrealized investment losses of $0.9 billion compared with $1.0 billion as of
June 30, 2012.

Holding Company
Genworth's holding company^5 ended the quarter with approximately $1.0 billion
of cash and highly liquid securities, up approximately $50 million compared to
the prior quarter, from approximately $270 million of dividends received from
the operating companies, partially offset by a $100 million contribution to
GMICO as part of the comprehensive U.S. MI capital plan and approximately $100
million of debt interest payments. 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. The previously announced sale of the company's wealth management
business is expected to close in the third quarter 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.

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 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. The Corporate & Other division
also includes the wealth management business presented as discontinued
operations. Products and services are offered through financial
intermediaries, advisors, independent distributors and sales specialists.
Genworth, 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 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 second 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 7:30 a.m. on July 31, 2013. Investors are encouraged to review these
materials.

Genworth will conduct a conference call on July 31, 2013 at 8 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 August 14, 2013 at 855 859.2056
or 404 537.3406 (outside the U.S.); the conference ID # for the call is #
99864084. 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 other than a $13 million after-tax
expense recorded in the second quarter of 2013 related to restructuring
costs. 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 June 30, 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 foritems that do not reflect the underlying
performance of the investment portfolio. 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 industry 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 insured or 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.

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 the company's businesses, including downturns and
    volatility in global economies and equity and credit markets; downgrades
    or potential downgrades in the company's financial strength or credit
    ratings; interest rate fluctuations and levels; adverse capital and credit
    market conditions; lack of credit facilities; the valuation of fixed
    maturity, equity and trading securities; defaults, downgrades or other
    events impacting the value of the company's fixed maturity securities
    portfolio; defaults on the company's commercial mortgage loans or the
    mortgage loans underlying 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 the company's subsidiaries;
    competition; availability, affordability and adequacy of reinsurance; loss
    of key distribution partners; regulatory restrictions on the company's
    operations and changes in applicable laws and regulations; legal or
    regulatory investigations or actions; the failure of or any compromise of
    the security of 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 the company's deferred tax assets; changes in
    expected morbidity or mortality rates; accelerated amortization of
    deferred acquisition costs and present value of future profits; ability to
    increase premiums on certain in-force and future 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 international 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 the company's rescissions; the extent to which loan
    modifications and other similar programs may provide benefits to the
    company; unexpected changes in unemployment and underemployment rates in
    the United States; further deterioration in economic conditions or a
    further decline in home prices in the United States; problems associated
    with foreclosure process defects in the United States that may defer claim
    payments; changes to the role or structure of Federal National Mortgage
    Association (Fannie Mae) and Federal Home Loan Mortgage Corporation
    (Freddie Mac); competition with government-owned and government-sponsored
    enterprises offering U.S. mortgage insurance; changes in regulations that
    affect the company's 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 the company's U.S. mortgage lending
    customers; legal actions under the Real Estate Settlement Procedures Act
    of 1974 (RESPA); potential liabilities in connection with the company's
    U.S. contract underwriting services; and the impact on the statutory
    capital and risk-to-capital ratios of the U.S. mortgage insurance business
    from variations in the valuation of affiliate investments;
  oOther risks, including the risk that the company's strategy may not be
    successfully implemented; the company's Capital Plan may not achieve its
    anticipated benefits; adverse market or other conditions might delay or
    impede the minority sale of the company's 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 the company's corresponding tax savings
    are never realized and payments could be accelerated in the event of
    certain changes in control; 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; andthe impact of the expense reduction announced on
    June 6, 2013 is not as anticipated and the company may lose key personnel
    related to actions like this as well as general uncertainty in the timing
    of the company's turnaround; and
  oRisks relating to the company's common stock, including the suspension of
    dividends and stock price fluctuations.

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



Condensed Consolidated Statements of Income
(Amounts in millions, except per share amounts)
                                                           Three months ended
                                                           June 30,
                                                           2013       2012
Revenues:
Premiums                                                   $  1,286   $ 1,302
Net investment income                                         821       846
Net investment gains (losses)                                 21        (33)
Insurance and investment product fees and other               243       287
  Total revenues                                    2,371     2,402
Benefits and expenses:
Benefits and other changes in policy reserves                 1,269     1,382
Interest credited                                             184       194
Acquisition and operating expenses, net of
 deferrals                                               413       439
Amortization of deferred acquisition costs and
 intangibles                                             137       147
Interest expense                                              121       131
  Total benefits and expenses                       2,124     2,293
Income from continuing operations before income taxes         247       109
Provision for income taxes                                    73        27
Income from continuing operations                             174       82
Income from discontinued operations, net of taxes             6         27
Net income                                                    180       109
Less: net income attributable to noncontrolling interests     39        33
Net income available to Genworth Financial, Inc.'s
 common stockholders                                  $  141     $ 76
Income from continuing operations available to
 Genworth Financial, Inc.'s common stockholders
 per common share:
  Basic                                          $  0.27    $ 0.10
  Diluted                                        $  0.27    $ 0.10
Net income available to Genworth Financial, Inc.'s
 common stockholders per common share:
  Basic                                          $  0.29    $ 0.16
  Diluted                                        $  0.28    $ 0.16
Weighted-average shares outstanding:
  Basic                                             493.4     491.5
  Diluted                                           497.5     493.9



Reconciliation of Net Operating Income to Net Income
(Amounts in millions, except per share amounts)
                                                          Three months ended
                                                          June 30,
                                                          2013       2012
Net operating income (loss):
U.S. Life Insurance Division
 U.S. Life Insurance segment
  Life Insurance                                $  27      $ 30
  Long Term Care                                   26        14
  Fixed Annuities                                  26        20
 Total U.S. Life Insurance segment                      79        64
 Total U.S. Life Insurance Division                     79        64
Global Mortgage Insurance Division
 International Mortgage Insurance segment
  Canada                                           43        41
  Australia                                        55        44
  Other Countries                                  (9)       (9)
 Total International Mortgage Insurance segment         89        76
 U.S. Mortgage Insurance segment                        13        (25)
 Total Global Mortgage Insurance Division               102       51
Corporate and Other Division
 International Protection segment                       1         3
 Runoff segment                                         6         (6)
 Corporate and Other                                    (55)      (45)
 Total Corporate and Other Division                     (48)      (48)
Net operating income                                         133       67
Adjustments to net operating income:
Net investment gains (losses), net of taxes and other
 adjustments                                            15        (18)
Expenses related to restructuring, net of taxes              (13)      —
Income from discontinued operations, net of taxes            6         27
Net income available to Genworth Financial, Inc.'s
 common stockholders                                    141       76
Add: net income attributable to noncontrolling interests     39        33
Net income                                                $  180     $ 109
Net income available to Genworth Financial, Inc.'s
 common stockholders per common share:
  Basic                                         $  0.29    $ 0.16
  Diluted                                       $  0.28    $ 0.16
Net operating income per common share:
  Basic                                         $  0.27    $ 0.14
  Diluted                                       $  0.27    $ 0.14
Weighted-average shares outstanding:
  Basic                                            493.4     491.5
  Diluted                                          497.5     493.9



Condensed Consolidated Balance Sheets
(Amounts in millions)
                                                       June 30,   December 31,
                                                       2013       2012
Assets
 Cash, cash equivalents and invested assets            $ 72,850   $   78,726
 Deferred acquisition costs                              5,237        5,036
 Intangible assets                                       433          366
 Goodwill                                                867          868
 Reinsurance recoverable                                 17,236       17,230
 Other assets                                            704          710
 Separate account assets                                 9,806        9,937
 Assets associated with discontinued operations          443          439
      Total assets                                     $ 107,576  $   113,312
Liabilities and stockholders' equity
 Liabilities:
  Future policy benefits                               $ 33,437   $   33,505
  Policyholder account balances                          24,935       26,262
  Liability for policy and contract claims               7,302        7,509
  Unearned premiums                                      4,022        4,333
  Deferred tax and other liabilities                     4,998        6,746
  Borrowings related to securitization entities          317          336
  Non-recourse funding obligations                       2,054        2,066
  Long-term borrowings                                   4,720        4,776
  Separate account liabilities                           9,806        9,937
  Liabilities associated with discontinued operations    83           61
      Total liabilities                                  91,674       95,531
 Stockholders' equity:
  Common stock                                           1            1
  Additional paid-in capital                             12,139       12,127
  Accumulated other comprehensive income (loss):
      Net unrealized investment gains (losses):
         Net unrealized gains (losses) on securities
         not
                 other-than-temporarily impaired         1,296        2,692
         Net unrealized gains (losses) on other-than-
                 temporarily impaired securities         (2)          (54)
      Net unrealized investment gains (losses)           1,294        2,638
      Derivatives qualifying as hedges                   1,581        1,909
      Foreign currency translation and other             267          655
      adjustments
  Total accumulated other comprehensive income (loss)    3,142        5,202
  Retained earnings                                      2,107        1,863
  Treasury stock, at cost                                (2,700)      (2,700)
      Total Genworth Financial, Inc.'s stockholders'     14,689       16,493
      equity
  Noncontrolling interests                               1,213        1,288
      Total stockholders' equity                         15,902       17,781
      Total liabilities and stockholders' equity       $ 107,576  $   113,312



Impact of Foreign Exchange on Operating Results^6
Three months ended June 30, 2013
                                         Percentages         Percentages
                                         Including Foreign   Excluding Foreign
                                         Exchange            Exchange^7
 Canada Mortgage Insurance (MI):
 Flow new insurance written                  (18)    %       (16)     %
 Flow new insurance written (2Q13 vs.        42      %       45       %
 1Q13)
 Australia MI:
 Flow new insurance written                  6       %       7        %
 Flow new insurance written (2Q13 vs.        10      %       13       %
 1Q13)



Reconciliation of Core Yield to Reported Yield
                                                                 For the three
                                                                 months ended
                                                                 June 30,
 (Assets - amounts in billions)                                  2013
 Reported Total Invested Assets and Cash                         $   72.2
 Subtract:
  Securities lending                                            0.2
  Unrealized gains (losses)                                     3.7
  Derivative counterparty collateral                            0.4
 Adjusted end of period invested assets                          $   67.9
 Average Invested Assets Used in Reported Yield Calculation      $   68.5
 Subtract:
  Restricted commercial mortgage loans and other invested
 assets related to
   securitization entities^8                               0.2
 Average Invested Assets Used in Core Yield Calculation          $   68.3
 (Income - amounts in millions)
 Reported Net Investment Income                                  $   821
 Subtract:
  Bond calls and commercial mortgage loan prepayments           14
  Reinsurance^9                                                 21
  Other non-core items^10                                       19
  Restricted commercial mortgage loans and other invested
 assets related to
   securitization entities^8                               4
 Core Net Investment Income                                      $   763
 Reported Yield                                                      4.79   %
 Core Yield                                                          4.47   %



____________________
^1 Unless 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. All references to
results prior to the April 1, 2013 Completion of the holding company
reorganization are to the results of Genworth Holdings, Inc. as which we are
the successor for reporting purposes.
^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 second quarter of 2013, due to timing of the
filing of statutory statements.
^4 Percent change excludes the impact of foreign exchange.
^5 Holding company cash and highly liquid securities comprises assets heldby
Genworth Holdings, Inc. (the issuer of outstanding public company debt) which
is now a subsidiary of Genworth Financial, Inc.
^6 All percentages are comparing the second quarter of 2013 to the second
quarter of 2012 unless otherwise stated.
^7 The impact of foreign exchange was calculated using the comparable prior
period exchange rates.
^8 Represents the incremental assets and investment income related to
restricted commercial mortgage loans and other invested assets.
^9 Represents imputed investment income related to reinsurance agreements in
the lifestyle protection insurance business.
^10 Includes cost basis adjustments on structured securities, preferred stock
income 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; Media: Al Orendorff, 804 662.2534,
alfred.orendorff@genworth.com
 
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