Genworth MI Canada Inc. Reports Third Quarter 2013 Earnings

Net Operating Income of $91 million, 12% higher year-over-year
Operating Diluted EPS of $0.94/share, 15% higher year-over-year
Common Dividend Increase of 9% to $0.35 per share 
TORONTO, Oct. 29, 2013 /CNW/ - Genworth MI Canada Inc. (the "Company") (TSX: 
MIC) today reported third quarter 2013 net income of $96 million or $0.99 per 
diluted common share, and net operating income of $91 million or $0.94 
operating earnings per diluted common share. As compared to the prior 
quarter, net income this quarter was 2% or $2 million lower, while net 
operating income was 3% or $3 million higher. As compared to the prior year, 
net income for this quarter was 13% or $11 million higher and net operating 
income was 12% or $10 million higher. 
"Our disciplined business execution and the strong quality of our insurance 
portfolio resulted in one of our best quarters to date," said Brian Hurley, 
Chairman and Chief Executive Officer. "The low loss ratio of 22% is the 
principal driver of this quarter's results. We are also pleased to announce 
that our Board of Directors has approved a 9% increase to the quarterly common 
share dividend. This represents our fourth annual increase." 
Third Quarter 2013 Key Financial Metrics: 


    --  Net premiums written of $161 million were $24 million, or 18%,
        higher than the prior quarter and $17 million, or 10%, lower
        year-over-year.   The sequential increase was primarily driven
        by seasonally higher volumes.  The year-over-year decrease was
        reflective of the smaller high loan-to-value mortgage insurance
        market and reduced low loan-to-value mortgage insurance volume.
    --  Net premiums earned of $143 million were flat as compared to
        the prior quarter and $4 million lower year-over-year. Premiums
        earned this quarter primarily reflected the size of the 2010
        and subsequent books of business.
    --  Losses on claims of $32 million were $4 million lower than the
        prior quarter and $12 million lower than the same quarter in
        the prior year.  In both cases, the improvement was primarily
        due to a favourable shift in the geographic mix of
        delinquencies, a stabilizing economic environment, and strong
        credit quality of the recent books.  This resulted in a loss
        ratio of 22% for this quarter, as compared to 30% in the same
        quarter in the prior year.  The loss performance was 3
        percentage points lower sequentially and 8 percentage points
        lower year-over-year.
    --  Net Investment income excluding realized gains of $45 million
        was $1 million higher than the prior quarter and $6 million
        higher than the same quarter in the prior year.  Net investment
        income inclusive of realized gains and losses was $51 million,
        $8 million lower sequentially and $7 million higher than the
        same quarter in the prior year. Net investment income from the
        prior year included fees paid by the Company related to the
        government guarantee agreement which was replaced on January 1,
        2013 by a legislative framework.
    --  Net operating income of $91 million was $3 million higher
        relative to the prior quarter and $10 million higher
        year-over-year, primarily as a result of lower losses on
        claims, which was partially offset by lower premiums earned.
    --  Operating return on equity was 13% for the quarter, relatively
        unchanged as compared to the prior quarter and 1 percentage
        point higher on a year-over-year basis. 
    --  The expense ratio, as a ratio of net premiums earned, was 19%
        during the quarter.  This ratio was 1 percentage point higher
        than the prior quarter and 1 percentage point higher as
        compared to the same quarter in the prior year, consistent with
        the Company's expectations.
    --  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 218%, 2 percentage points higher than
        the prior quarter and 33 percentage points higher than the
        Company's internal target MCT ratio of 185%.  The Company
        currently intends to operate with a MCT ratio above 190% to
        maintain financial flexibility.

Third Quarter 2013 Key Highlights:
    --  The high loan-to-value component of new insurance written
        during the quarter was $6.2 billion, representing an increase
        of $1.4 billion or 29% from the prior quarter, and a decline of
        $1 billion or 13% over the same quarter in the prior year.  The
        sequential increase was primarily due to typical seasonality. 
        The year-over-year decline was primarily due to a smaller
        market size for high loan-to-value mortgage origination.
    --  During the quarter, the Company insured $4.1 billion of low
        loan-to-value mortgage portfolios, representing a decrease of
        $2.4 billion or 37% from the prior quarter volume of $6.5
        billion, and a $1.4 billion or 52% increase over the same
        quarter in the prior year.  The volume of portfolio insurance
        fluctuates and varies from quarter to quarter based on the
        needs of lenders.
    --  The net premiums written in the quarter from insurance of high
        loan-to-value mortgage portfolios was $144 million, accounting
        for 89% of the Company's net premiums written.  This
        represented an increase of $33 million, or 29%, from the prior
        quarter and a decrease of $26 million, or 15%, from the same
        quarter in the prior year.
    --  The number of reported delinquencies remained flat at 1,778 as
        compared to the prior quarter and decreased by 405
        delinquencies as compared to the same quarter in the prior
        year, reflecting an improvement of 19%.  The current number of
        delinquencies was the lowest since 2008 and reflected the
        continuation of a favourable shift in the geographic mix of
        delinquencies, the strong credit quality in the portfolio and
        improving economic conditions across most regions.  These
        factors, in combination with the ongoing success of the
        Company's proactive loss mitigation strategies, contributed to
        the Company's delinquency performance.
    --  The Company commenced its normal course issuer bid in May,
        2013, under which the Company may purchase a maximum of
        4,937,078 common shares over a period up to 12 months ending
        May 2014.  As at September 30, 2013, the Company had purchased
        and cancelled 3,903,117 of its common shares as part of its
        normal course issuer bid.  The aggregate value of the cancelled
        common shares was approximately $105 million, inclusive of
        common shares repurchased from Genworth Financial, Inc., which
        allowed Genworth Financial to maintain its proportional
        percentage ownership in the Company.
    --  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 3.7% and duration of 3.8 years as at
        September 30, 2013.  As a result of ongoing portfolio
        management, the Company had realized investment gains of $7
        million in the quarter.
    --  The ratings for the Company and its operating insurance
        company, Genworth Financial Mortgage Insurance Company Canada,
        were recently confirmed by Standard & Poor's Ratings Services
        (S&P) and DBRS Ratings Limited (DBRS).  The Company's issuer
        credit rating remains 'A' with a stable outlook from S&P and
        'AA' (low) with stable trend from DBRS.  The financial strength
        of its operating insurance company remains rated 'AA-' with a
        stable outlook by S&P and 'AA' with stable trend by DBRS.

Dividends

On August 30, 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 increase to $0.35 per common share, payable on November 29, 2013, to 
shareholders of record at the close of business on November 15, 2013. This 
dividend represents a 9% increase in the quarterly payment to the Company's 
common shareholders.

Shareholders' Equity

As of September 30, 2013, shareholders' equity was $3.0 billion, representing 
a book value of $31.82 per common share on a fully diluted basis. Excluding 
accumulated other comprehensive income ("AOCI") shareholders' equity was $2.9 
billion, or a book value of $30.50 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 third 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 third quarter earnings call will be held on October 30, 2013 at 
10:00 am ET (Local: 416-644-3414, Toll free: 1-800-814-4859, Conference ID: 
4641371). 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 November 30, 2013 
(Local 416-640-1917, Toll Free 1-877-289-8525, Access Code 4641371#). 
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 September 30, 2013, Genworth Canada had $5.6 billion total 
assets and $3.0 billion shareholders' equity. Find out more at www.genworth.ca.

Consolidated                                                           
Financial Highlights
                                  Three Months                   Year- to- date

($ millions, except            Ended September 30              Ended September 30
 per share amounts)
                                  (Unaudited)                      (Unaudited)
                              2013            2012            2013            2012

New insurance
written                        10,295           9,876          27,292          32,814

Insurance in-Force            309,650         294,685         309,650         294,685

Net premiums written              161             178             382             434

Net premiums earned               143             147             431             442

Losses on claims                   32              44             111             148

Investment income
(interest/dividends,
net of expenses)( 1)               45              39             134             123

Realized and
unrealized gains or
losses on
investments                         7               5              25              11

Total investment
income                             51              44             160             134

Net income                         96              85             282             244

Net operating income
(1)                                91              81             264             236

Fully diluted
earnings per common
share                           $0.99           $0.86           $2.88           $2.48

Fully diluted
operating earnings
per common share(1)             $0.94           $0.82           $2.70           $2.39

Fully diluted book
value per common
share, inc. AOCI               $31.82          $28.72          $31.82          $28.72

Fully diluted book
value per common
share, excl. AOCI(1)           $30.50          $26.45          $30.50          $26.45

Basic weighted
average common
shares outstanding         96,426,269      98,691,648      97,772,710      98,681,032

Diluted weighted
average common
shares outstanding         96,561,756      98,691,648      97,907,664      98,910,753

Loss ratio                        22%             30%             26%             33%

Combined ratio                    41%             48%             44%             51%

Operating return on
equity(1)                         13%             12%             12%             12%

Minimum Capital Test
ratio (MCT)                      218%            164%            218%            164%

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

IFRS and Non-IFRS Financial Measures

The Company's consolidated financial statements are prepared in accordance 
with IFRS. To supplement its financial statements, the Company uses select 
non-IFRS 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-IFRS 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-IFRS 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-IFRS 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" link under "Investor Resources" subsection at the bottom of the 
page. A reconciliation of non-IFRS financial measures to the most recently 
comparable measures calculated in accordance with IFRS can be found in the 
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, 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 dated March 18, 2013. 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.



SOURCE  Genworth Canada 
Investors - Samantha Cheung, 905-287-5482samantha.cheung@genworth.com 
Media- Lisa Azzuolo, 905-287-5520lisa.azzuolo@genworth.com 
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CO: Genworth MI Canada
ST: Ontario
NI: REL ERN CONF DIV  
-0- Oct/29/2013 20:41 GMT
 
 
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