Genworth MI Canada Inc. Reports First Quarter 2014 Earnings

First Quarter Net Operating Income of $91 million, up 7% Year-over-Year 
Operating Diluted EPS of $0.96 per share, up 12%, Year-over-Year 15% Average 
Premium Rate Increase Will Take Effect May 1, 2014 
TORONTO, April 29, 2014 /CNW/ - Genworth MI Canada Inc. (the "Company") (TSX: 
MIC) today reported first quarter 2014 net income of $95 million or $1.00 per 
diluted common share, and net operating income of $91 million or $0.96 
operating earnings per diluted common share.   Net operating income was 
positively impacted by the Company's improving loss experience primarily a 
reflection of continuing strong market conditions. 
"Our strong business execution and continued trend of lower losses produced 
solid first quarter results," said Brian Hurley, Chairman and Chief Executive 
Officer of the Company. "The stable economy and housing market, and the 15% 
average price increase effective May 1, 2014, should bode well for our 
business going forward." 
First Quarter 2014 Key Financial Metrics: 


    --  Net premiums written of $84 million were flat to the same
        quarter in the prior year and $45 million lower than the prior
        quarter, consistent with typical seasonality. The top line
        reflects an improved market position offset by delays in home
        closings related to the harsh and prolonged winter.
    --  Net premiums earned of $141 million were $3 million lower than
        the same quarter in the prior year and lower by $1 million as
        compared to the prior quarter. The unearned premium reserve was
        $1.7 billion at the end of the quarter, $57 million lower than
        the prior quarter.
    --  Losses on claims of $28 million reflected a $16 million
        improvement over the same quarter in the prior year and a $3
        million improvement over the prior quarter. During the quarter,
        the Company experienced lower losses primarily due to a
        favourable shift in the regional mix of delinquencies, a stable
        economic environment, and continued housing market strength.
        This resulted in a loss ratio of 20% for this quarter, 11
        points lower than the same quarter in the prior year and 2
        points lower than the prior quarter.
    --  The expense ratio was 19%, as a percentage of net premiums
        earned, during the quarter. This ratio was 1 percentage point
        higher as compared to the same quarter in the prior year and 4
        percentage points lower than the prior quarter.
    --  Net Investment income, excluding realized gains, of $44 million
        was $2 million lower than the same quarter in the prior year
        and $1 million lower than the prior quarter.
    --  Net operating income of $91 million was $6 million higher
        relative to both the same quarter in the prior year and the
        prior quarter.
    --  Operating return on equity was 12% for the quarter, flat when
        compared to both the same quarter in the prior year and prior
        quarter.
    --  The regulatory capital ratio or Minimum Capital Test ("MCT")
        ratio was approximately 229%, 6 percentage points higher than
        the prior quarter and 44 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 strength and flexibility.

First Quarter 2014 Key Highlights:
    --  The high loan-to-value component of new insurance written
        during the quarter was $3.1 billion, essentially flat to the
        same quarter in the prior year and $2 billion lower than the
        prior quarter due to typical seasonality. Mortgage insurance
        approvals increased by 9% year over year reflecting marginally
        higher housing resale activity and modest improvements in
        market penetration. The resulting net premiums written in the
        quarter from insurance of high loan-to-value mortgages was $71
        million, accounting for 85% of the Company's net premiums
        written. This represented a decrease of $2 million from the
        same quarter in the prior year and $47 million lower than the
        prior quarter.
    --  During the quarter, the Company realized $13 million of
        premiums written from new insurance written from its portfolio
        of low loan-to-value mortgages totaling $3.2 billion. This
        represents an increase of $0.7 billion in new insurance written
        from the prior quarter volume, and a $0.8 billion increase over
        the same quarter in the prior year. The volume of portfolio
        insurance varies from quarter to quarter based on lender
        demand.
    --  The number of reported delinquencies was 1,860 outstanding at
        the end of the quarter. This represents a decrease of 5% as
        compared to the same quarter in the prior year and a marginal
        increase of 2% in the current quarter due to typical
        seasonality. The year-over-year decline in delinquencies
        reflects the strong credit quality in the portfolio and
        improving economic conditions across most regions.
    --  The Company's investment portfolio had a market value of $5.2
        billion at the end of the quarter. The portfolio had a pre-tax
        equivalent book yield of 3.6% and duration of 3.7 years as at
        March 31, 2014. As a result of ongoing active portfolio
        management, the Company realized investment gains of $5 million
        in the quarter related to its equity holdings.
    --  During the quarter, the Company received confirmation from OSFI
        that the Company will be subject to a customized Minimum
        Capital Test ("MCT") for mortgage insurers starting in 2015.
        The Company is awaiting the final details of the customized
        MCT, but does not anticipate a material impact on the
        calculation of the MCT ratio.
    --  In a press release dated February 28, 2014, the Company
        announced that it will increase its mortgage insurance premium
        rates by an average of 15% effective May 1, 2014. The Company
        believes the new pricing structure is reflective of increased
        regulatory capital requirements and supportive of the long-term
        safety and stability of the housing market.
    --  The draft form of Regulation B-21, entitled "Residential
        Mortgage Insurance Underwriting Practices and Procedures", was
        released by OSFI on April 14, 2014, for public commentary.
        These guidelines set out principles based on four main areas:
        governance of the underwriting decisions, interactions with
        lenders, risk management and disclosure. The Company believes
        that the ongoing oversight by the regulator is prudent for the
        industry in preserving the long term safety and soundness of
        the housing market. Based upon the Company's interpretation of
        the draft, the Company believes its current practices are
        generally aligned with these guidelines.
    --  On April 29, 2014, the Company also announced its acceptance by
        the Toronto Stock Exchange of its Notice of Intention to make a
        Normal Course Issuer Bid ("NCIB"). Until its expiry on May 4,
        2015, the Company may, if considered advisable, purchase up to
        an aggregate of 4,746,504 of its issued and outstanding common
        shares ("Common Shares"), being approximately 5% of the Common
        Shares issued and outstanding as of April 23, 2014. The
        Company's major shareholder, Genworth Financial intends to
        participate in the NCIB in order to maintain its proportionate
        ownership in Genworth Canada at approximately 57.4%.
    --  Subsequent to the quarter, the Company successfully completed a
        $160 million senior unsecured debenture issue at a coupon of
        4.242% with a maturity date of April 1, 2024. In doing so, the
        Company took advantage of favourable market conditions and
        extended its debt maturity profile. The net proceeds from the
        issue will primarily be used to early redeem the Company's
        outstanding $150 million 4.59% December 2015 debentures on May
        1, 2014. The Company expects to incur a make whole cost of
        approximately $7.2 million in connection with the early
        redemption.

Dividends

On February 28, 2014, the Company paid a quarterly dividend of $0.35 per 
common share.

The Company also announced today that its Board of Directors approved a 
dividend payment of $0.35 per common share, payable on May 30, 2014, to 
shareholders of record at the close of business on May 15, 2014.

Shareholders' Equity

As of March 31, 2014, shareholders' equity was $3.2 billion, representing a 
book value of $33.52 per common share on a fully diluted basis.  Excluding 
accumulated other comprehensive income ("AOCI") shareholders' equity was $ 3.0 
billion, or a book value of $31.83 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 its 
Management's Discussion and Analysis as posted on SEDAR and available at 
www.sedar.com.

This press release, the financial statements, the Company's Management's 
Discussion and Analysis, and the first quarter 2014 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 April 30, 2014 at 
10:00 am ET (Local: 416-644-3415, Toll free: 1-877-974-0445, Conference ID: 
4678076).  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, 2014 (Local 
416-640-1917, Toll Free 1-877-289-8525, Access Code 4678076#).  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 March 31, 
2014, Genworth Canada had $5.5 billion total assets and $3.2 billion total 
shareholders' equity. Find out more at www.genworth.ca.

Consolidated Financial Highlights
         ($ millions, except per share amounts)           Three Months
                                                          Ended March 31
                                                           (Unaudited)
    ---                                                  ---------------
                          2014                              2013
                          ----                              ----
                                                           6,348        5,685
    New insurance written
    ---------------------
                                                              84           84
    Net premiums written
    --------------------
                                                             141          144
    Net premiums earned
    -------------------
                                                              28           44
    Losses on claims
    ----------------
    Expenses                                                  27           26
    --------                                                 ---          ---
                                                              44           45
    Investment income (interest/dividends, net of
     expenses) 1
    ---------------------------------------------
                                                               5            4
    Net investment gains
    --------------------
                                                              49           50
    Total net investment income
    ===========================
                                                              95           88
    Net income
    ----------
    Net operating income (1)                                  91           85
    -----------------------                                  ---          ---
    Fully diluted earnings per common share                $1.00        $0.89
    ---------------------------------------                -----        -----
    Fully diluted operating earnings per common
     share(1)                                              $0.96        $0.86
    ===========================================            =====        =====
    Fully diluted book value per common share, inc.
     AOCI                                                 $33.52       $31.32
    -----------------------------------------------       ------       ------
    Fully diluted book value per common share,
     excl. AOCI(1)                                        $31.83       $28.99
    ==========================================            ======       ======
    Basic weighted average common shares
     outstanding                                      94,921,173   98,716,181
    ------------------------------------              ----------   ----------
    Diluted weighted average common shares
     outstanding                                      94,983,507   98,835,148
    ======================================            ==========   ==========
    Loss ratio                                                20%          31%
    ----------                                               ---          ---
    Combined ratio                                            39%          49%
    --------------                                           ---          ---
    Operating return on equity(1)                             12%          12%
    ----------------------------                             ---          ---
    Minimum Capital Test ratio (MCT)                         229%         216%
    -------------------------------                          ---          ---
    (1)This is a financial
     measure not calculated
     based on International
     Financial Reporting
     Standards ("IFRS").  See
     the "Non-IFRS Financial
     Measures" section of
     this press release for
     additional information.

Non-IFRS Financial Measures

To supplement the Company's consolidated financial statements, which are 
prepared in accordance with IFRS, the Company uses non-IFRS financial measures 
to analyze performance. Non-IFRS financial measures include net operating 
income, operating earnings per common share (basic), operating earnings per 
common share (diluted), shareholders' equity excluding accumulated other 
comprehensive income ("AOCI"), operating return on equity and underwriting 
ratios such as loss ratio, expense ratio and combined ratio. Non-IFRS 
financial measures used by the Company to analyze the impact of the reversal 
of the government guarantee fund exit fee include adjusted net investment 
income, adjusted net income, adjusted earnings per common share (basic), 
adjusted earnings per common share (diluted), adjusted net operating income, 
adjusted operating earnings per common share (basic), adjusted operating 
earnings per common share (diluted), and adjusted operating return on equity. 
Other non-IFRS measures used by the Company to analyze performance include 
insurance in-force, new insurance written, Minimum Capital Test ("MCT") ratio, 
delinquency ratio, severity on claims paid, investment yield, book value per 
common share (basic) including AOCI, book value per common share (basic) 
excluding AOCI, book value per common share (diluted) including AOCI, book 
value per common share (diluted) excluding AOCI, and dividends paid per common 
share. 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 financial measures do not have standardized meanings and are 
unlikely to be comparable to any similar measures presented by other companies.

In the first quarter of 2014, the Company revised its definition of net 
operating income (loss) to exclude gains (losses) on the early extinguishment 
of debt to better reflect the basis on which the performance of its business 
is internally assessed and to reflect management's opinion that they are not 
indicative of overall operating trends.  Changes were not required for prior 
periods.

See the "Non?IFRS financial measures" section at the end of the MD&A for a 
reconciliation of net operating income to net income, operating earnings per 
common share (basic) to earnings per common share (basic), operating earnings 
per common share (diluted) to earnings per common share (diluted), and 
shareholders' equity excluding AOCI to shareholders' equity.  Definitions of 
key Non?IFRS financial measures as well as an explanation of why these 
measures are useful to investors and the additional purposes for which 
management uses the measures can be found in the Company's "Glossary for 
non?IFRS financial measures", in the "Non?IFRS financial measures" section at 
the end of the MD&A.  The MD&A along with the Company's most recent financial 
statements, are available on the Company's website and on SEDAR at 
www.sedar.com.

Special Note Regarding Forward-Looking Statements

Certain statements made in this press release contain forward-looking 
information within the meaning of applicable securities laws ("forward-looking 
statements").  When used in this press release, the words "may", "would", 
"could", "will", "intend", "plan", "anticipate", "believe", "seek", "propose", 
"estimate", "expect", and 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 guarantee legislative framework, the impact of proposed guideline 
changes by OSFI, and the effect of 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.

The forward-looking statements contained herein are based on certain factors 
and assumptions, certain of which appear proximate to the applicable 
forward-looking statements contained herein.  Inherent in the forward-looking 
statements are known and unknown risks, uncertainties and other factors beyond 
the Company's ability to control or predict, that may cause the actual 
results, performance or achievements of the Company, or developments in the 
Company's business or in its industry, to differ materially from the 
anticipated results, performance, achievements or developments expressed or 
implied by such forward-looking statements.  Actual results or developments 
may differ materially from those contemplated by the forward-looking 
statements.

The Company's actual results and performance could differ materially from 
those anticipated in these forward-looking statements as a result of both 
known and unknown risks, including the continued availability of the Canadian 
government's guarantee of private mortgage insurance on terms satisfactory to 
the Company; the Company's expectations regarding its revenues, expenses and 
operations; the Company's plans to implement its strategy and operate its 
business; the Company's expectations regarding the redemption of its existing 
debentures; Company's expectations regarding the compensation of directors and 
officers; the Company's anticipated cash needs and its estimates regarding its 
capital expenditures, capital requirements, reserves and its needs for 
additional financing; the Company's plans for and timing of expansion of 
service and products; the Company's ability to accurately assess and manage 
risks associated with the policies that are written; the Company's ability to 
accurately manage market, interest and credit risks; the Company's ability to 
maintain ratings; interest rate fluctuations; a decrease in the volume of high 
loan-to-value mortgage orientations; the cyclical nature of the mortgage 
insurance industry; changes in government regulations and laws mandating 
mortgage insurance; the acceptance by the Company's lenders of new 
technologies and products; the Company's ability to attract lenders and 
develop and maintain lender relationships; the Company's competitive position 
and its expectations regarding competition from other providers of mortgage 
insurance in Canada; anticipated trends and challenges in the Company's 
business and the markets in which it operates; changes in the global or 
Canadian economies; a decline in the Company's regulatory capital or an 
increase in its regulatory capital requirements; loss of members of the 
Company's senior management team; potential legal, tax and regulatory 
investigations and actions; the failure of the Company's computer systems; and 
potential conflicts of interest between the Company and its majority 
shareholder, Genworth Financial, Inc.

This is not an exhaustive list of the factors that may affect any of the 
Company's forward-looking statements.  Some of these and other factors are 
discussed in more detail in the Company's AIF dated March 17, 2014.  Investors 
and others should carefully consider these and other factors and not place 
undue reliance on the forward-looking statements.  Further information 
regarding these and other risk factors is included in the Company's public 
filings with provincial and territorial securities regulatory authorities 
(including the Company's AIF) and can be found on the SEDAR website at 
www.sedar.com. The forward-looking statements contained in this press release 
represent the Company's views only as of the date hereof.  Forward-looking 
statements contained in this press release are based on management's current 
plans, estimates, projections, beliefs and opinions and the assumptions 
related to these plans, estimates, projections, beliefs and opinions may 
change, and therefore are presented for the purpose of assisting the Company's 
security holders in understanding management's current views regarding those 
future outcomes and may not be appropriate for other purposes.  While the 
Company anticipates that subsequent events and developments may cause the 
Company's views to change, the Company does not undertake to update any 
forward-looking statements, except to the extent required by applicable 
securities laws.



SOURCE  Genworth MI Canada 
Investors, Samantha Cheung, 905-287-5482, samantha.cheung@genworth.com; Media, 
Lisa Azzuolo, 905-287-5520, lisa.azzuolo@genworth.com 
To view this news release in HTML formatting, please use the following URL: 
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CO: Genworth MI Canada
ST: Ontario
NI: REL ERN CONF  
-0- Apr/29/2014 21:30 GMT
 
 
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