EX-99.2

EX-99.2 3 d752137dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

LOGO

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019


Table of Contents	Page
Investor Letter		3
Use of Non-GAAP Measures		4
Results of Operations and Selected Operating Performance Measures		5
Financial Highlights		6

*Consolidated Quarterly Results*
Consolidated Net Income (Loss) by Quarter		8
Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss)		9
Consolidated Balance Sheets		10-11
Consolidated Balance Sheets by Segment		12-13
Deferred Acquisition Costs (DAC) Rollforward		14

*Quarterly Results by Business*
Adjusted Operating Income and Sales—U.S. Mortgage Insurance Segment		16-22
Adjusted Operating Income and Sales—Canada Mortgage Insurance Segment		24-27
Adjusted Operating Income and Sales—Australia Mortgage Insurance Segment		29-32
Adjusted Operating Income (Loss)—U.S. Life Insurance Segment		34-37
Adjusted Operating Income (Loss)—Runoff Segment		39
Adjusted Operating Loss—Corporate and Other Activities		41

*Additional Financial Data*
Investments Summary		43
Fixed Maturity Securities Summary		44
General Account U.S. GAAP Net Investment Income Yields		45
Net Investment Gains (Losses), Net—Detail		46

*Reconciliations of Non-GAAP Measures*
Reconciliation of Operating Return On Equity (ROE)		48
Reconciliation of Core Yield		49

*Corporate Information*
Financial Strength Ratings		51

Note:

Unless otherwise stated, all references in this financial supplement to net income (loss), net income (loss) per share, adjusted operating income (loss), adjusted operating income (loss) per share, book value and book value per share should be read as net income (loss) available to Genworth Financial, Inc.’s common stockholders, net income (loss) available to Genworth Financial, Inc.’s common stockholders per share, non-U.S. Generally Accepted Accounting Principles (U.S. GAAP) adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders, non-GAAP adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders per share, book value available to Genworth Financial, Inc.’s common stockholders and book value available to Genworth Financial, Inc.’s common stockholders per share, respectively.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Dear Investor,

Thank you for your continued interest in Genworth Financial, Inc.

Regards,

Investor Relations

InvestorInfo@genworth.com

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Use of Non-GAAP Measures

This financial supplement includes the non-GAAP financial measures entitled “adjusted operating income (loss)” and “adjusted operating income (loss) per share.” Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The chief operating decision maker evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The company defines adjusted operating income (loss) as income (loss) from continuing operations excluding the after-tax effects of income (loss) attributable to noncontrolling interests, net investment gains (losses), goodwill impairments, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, gains (losses) on insurance block transactions, restructuring costs and infrequent or unusual non-operating items. Gains (losses) on insurance block transactions are defined as gains (losses) on the early extinguishment of non-recourse funding obligations, early termination fees for other financing restructuring and/or resulting gains (losses) on reinsurance restructuring for certain blocks of business. 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, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, gains (losses) on insurance block transactions and restructuring costs are also excluded from adjusted operating income (loss) because, in the company’s opinion, they are not indicative of overall operating trends. Infrequent or unusual non-operating items are also excluded from adjusted 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 Financial, Inc.’s common stockholders in accordance with U.S. GAAP, the company believes that adjusted operating income (loss) and measures that are derived from or incorporate adjusted operating income (loss), including adjusted operating income (loss) per 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 adjusted 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 adjusted operating income (loss) have occurred in the past and could, and in some cases will, recur in the future. Adjusted operating income (loss) and adjusted operating income (loss) per share on a basic and diluted basis are not substitutes for net income (loss) available to Genworth Financial, Inc.’s common stockholders or net income (loss) available to Genworth Financial, Inc.’s common stockholders per share on a basic and diluted basis determined in accordance with U.S. GAAP. In addition, the company’s definition of adjusted operating income (loss) may differ from the definitions used by other companies.

In the first quarter of 2019, the company revised how it taxes the adjustments to reconcile net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) to align the tax rate used in the reconciliation to each segment’s local jurisdictional tax rate. Beginning in the first quarter of 2019, the company used a tax rate of 27% and 30% for its Canada and Australia Mortgage Insurance segments, respectively, to tax effect their adjustments. Its domestic segments remain at a 21% tax rate. In 2018, the company assumed a flat 21% tax rate on adjustments for all of its segments to reconcile net income (loss) available to Genworth Financial, Inc.’s common stockholders and adjusted operating income (loss). These adjustments are also net of the portion attributable to noncontrolling interests and net investment gains (losses) are adjusted for DAC and other intangible amortization and certain benefit reserves (see page 46).

Prior year amounts have not been re-presented to reflect this revised presentation; however, the previous methodology would not have resulted in a materially different segment-level adjusted operating income (loss).

In the second quarter of 2019, the company recorded a pre-tax loss of $1 million, net of the portion attributable to noncontrolling interests, related to the early redemption of CAD$100 million of Genworth MI Canada Inc.’s senior notes originally scheduled to mature in June 2020. The company recorded a pre-tax expense of $4 million in the first quarter of 2019 and $2 million in the third quarter of 2018 related to restructuring costs as it continues to evaluate and appropriately size its organizational needs and expenses. There were no infrequent or unusual items excluded from adjusted operating income (loss) during the periods presented other than fees incurred during the fourth quarter of 2018 related to Genworth Holdings, Inc.’s bond consent solicitation of $6 million for broker, advisor and investment banking fees.

The table on page 9 of this financial supplement provides a reconciliation of net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting. This financial supplement includes other non-GAAP measures management believes enhances the understanding and comparability of performance by highlighting underlying business activity and profitability drivers. These additional non-GAAP measures are on pages 48 and 49 of this financial supplement.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Results of Operations and Selected Operating Performance Measures

The company’s chief operating decision maker evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The table on page 9 of this financial supplement provides a reconciliation of net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting.

The company taxes its international businesses at their local jurisdictional tax rates and its domestic businesses at the U.S. corporate federal income tax rate of 21%. The company’s segment tax methodology applies the respective jurisdictional or domestic tax rate to the pre-tax income (loss) of each segment, which is then adjusted in each segment to reflect the tax attributes of items unique to that segment such as foreign withholding taxes and permanent differences between U.S. GAAP and local tax law. The difference between the consolidated provision for income taxes and the sum of the provision for income taxes in each segment is reflected in Corporate and Other activities.

The annually-determined tax rates and adjustments to each segment’s provision for income taxes are estimates which are subject to review and could change from year to year.

This financial supplement contains 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 business generated in a period. Sales refer to new insurance written for mortgage insurance. Sales do not include renewal premiums on policies or contracts written during prior periods. The company considers new insurance written to be a measure of the company’s operating performance because it represents a measure of new sales of insurance policies 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 company’s mortgage insurance businesses is a measure of the aggregate original loan balance for outstanding insurance policies as of the respective reporting date. Risk in-force for the company’s U.S. mortgage insurance business is based on the coverage percentage applied to the estimated current outstanding loan balance. For risk in-force in the mortgage insurance businesses in Canada and Australia, 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% that represents the highest expected average per-claim payment for any one underwriting year over the life of the company’s mortgage insurance businesses in Canada and Australia. In Australia, the company has certain risk share arrangements where it provides pro-rata coverage of certain loans rather than 100% coverage. As a result, for loans with these risk share arrangements, the applicable pro-rata coverage amount provided is used when applying the factor. The company considers insurance in-force and risk in-force to be measures of its operating performance because they represent measures of the size of its business at a specific date which will generate revenues and profits in a future period, rather than measures of its revenues or profitability during that period.

Management also regularly monitors and reports a loss ratio for the company’s businesses. For the mortgage insurance businesses, the loss ratio is the ratio of benefits and other changes in policy reserves to net earned premiums. For the long-term care insurance business, the loss ratio is the ratio of benefits and other changes in reserves less tabular interest on reserves less loss adjustment expenses to net earned premiums. The company considers the loss ratio to be a measure of underwriting performance in these businesses and helps to enhance the understanding of the operating performance of the businesses.

These operating performance 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.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Financial Highlights

(amounts in millions, except per share data)


Balance Sheet Data	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Total Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income	$	10,744		$	10,582		$	10,406		$	10,731		$	10,583
Total accumulated other comprehensive income		3,013			2,492			2,044			2,067			2,327

Total Genworth Financial, Inc.’s stockholders’ equity	$	13,757		$	13,074		$	12,450		$	12,798		$	12,910

Book value per share	$	27.32		$	25.98		$	24.86		$	25.56		$	25.78
Book value per share, excluding accumulated other comprehensive income	$	21.34		$	21.03		$	20.78		$	21.43		$	21.14
Common shares outstanding as of the balance sheet date		503.5			503.3			500.8			500.8			500.7

	Twelve months ended
Twelve Month Rolling Average ROE	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
U.S. GAAP Basis ROE		1.5	%		1.7	%		1.1	%		7.7	%		7.4	%
Operating ROE⁽¹⁾		1.7	%		1.7	%		1.7	%		7.6	%		7.1	%

	Three months ended
Quarterly Average ROE	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
U.S. GAAP Basis ROE		6.3	%		6.6	%		(12.5	)%		5.5	%		7.2	%
Operating ROE⁽¹⁾		7.7	%		4.6	%		(11.0	)%		5.4	%		7.6	%


Basic and Diluted Shares	Three months ended June 30, 2019		Six months ended June 30, 2019
Weighted-average common shares used in basic earnings per share calculations		503.4		502.3
Potentially dilutive securities:
Stock options, restricted stock units and stock appreciation rights		5.3		6.4

Weighted-average common shares used in diluted earnings per share calculations		508.7		508.7

⁽¹⁾	See page 48 herein for a reconciliation of U.S. GAAP Basis ROE to Operating ROE.

Consolidated Quarterly Results

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Consolidated Net Income (Loss) by Quarter

(amounts in millions, except per share amounts)


	2019							2018
	2Q			1Q		Total		4Q			3Q		2Q			1Q			Total
REVENUES:
Premiums	$	1,126		$	1,114	$	2,240	$	1,121		$	1,122	$	1,136		$	1,140		$	4,519
Net investment income		852			829		1,681		815			815		828			804			3,262
Net investment gains (losses)		(45	)		74		29		(114	)		13		(14	)		(31	)		(146	)
Policy fees and other income		223			187		410		191			193		209			202			795

Total revenues		2,156			2,204		4,360		2,013			2,143		2,159			2,115			8,430

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		1,270			1,301		2,571		1,847			1,321		1,205			1,311			5,684
Interest credited		146			147		293		152			151		152			156			611
Acquisition and operating expenses, net of deferrals		247			251		498		261			243		253			240			997
Amortization of deferred acquisition costs and intangibles		95			91		186		92			83		112			104			391
Interest expense		73			72		145		74			72		77			76			299

Total benefits and expenses		1,831			1,862		3,693		2,426			1,870		1,799			1,887			7,982

INCOME (LOSS) BEFORE INCOME TAXES		325			342		667		(413	)		273		360			228			448
Provision (benefit) for income taxes		107			112		219		(86	)		63		111			63			151

NET INCOME (LOSS)		218			230		448		(327	)		210		249			165			297
Less: net income attributable to noncontrolling interests		50			56		106		2			64		59			53			178

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS	$	168		$	174	$	342	$	(329	)	$	146	$	190		$	112		$	119


Earnings (Loss) Per Share Data:
Net income (loss) available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.33		$	0.35	$	0.68	$	(0.66	)	$	0.29	$	0.38		$	0.22		$	0.24
Diluted	$	0.33		$	0.34	$	0.67	$	(0.66	)	$	0.29	$	0.38		$	0.22		$	0.24
Weighted-average common shares outstanding
Basic		503.4			501.2		502.3		500.8			500.7		500.6			499.6			500.4
Diluted⁽¹⁾		508.7			508.6		508.7		500.8			503.3		502.6			502.7			504.2

⁽¹⁾

Under applicable accounting guidance, companies in a loss position are required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of the net loss for the three months ended December 31, 2018, the company was required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share for the three months ended December 31, 2018, as the inclusion of shares for stock options, restricted stock units and stock appreciation rights of 7.6 million would have been antidilutive to the calculation. If the company had not incurred a net loss for the three months ended December 31, 2018, dilutive potential weighted-average common shares outstanding would have been 508.4 million.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss)

(amounts in millions, except per share amounts)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
NET INCOME (LOSS)	$	218		$	230		$	448		$	(327	)	$	210		$	249		$	165		$	297
Less: net income attributable to noncontrolling interests		50			56			106			2			64			59			53			178

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS		168			174			342			(329	)		146			190			112			119
ADJUSTMENTS TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Net investment (gains) losses, net⁽¹⁾		43			(71	)		(28	)		42			(3	)		12			17			68
(Gains) losses on early extinguishment of debt, net⁽²⁾		1			—			1			—			—			—			—			—
Expenses related to restructuring		—			4			4			—			2			—			—			2
Fees associated with bond consent solicitation		—			—			—			6			—			—			—			6
Taxes on adjustments		(8	)		14			6			(10	)		—			(2	)		(4	)		(16	)

ADJUSTED OPERATING INCOME (LOSS)	$	204		$	121		$	325		$	(291	)	$	145		$	200		$	125		$	179


ADJUSTED OPERATING INCOME (LOSS):
U.S. Mortgage Insurance segment	$	147		$	124		$	271		$	124		$	118		$	137		$	111		$	490
Canada Mortgage Insurance segment		41			41			82			48			44			46			49			187
Australia Mortgage Insurance segment		13			14			27			18			17			22			19			76
U.S. Life Insurance segment:
Long-Term Care Insurance		37			(20	)		17			(314	)		(24	)		22			(32	)		(348	)
Life Insurance		10			(2	)		8			(108	)		(2	)		4			(1	)		(107	)
Fixed Annuities		19			17			36			(3	)		23			31			28			79

Total U.S. Life Insurance segment		66			(5	)		61			(425	)		(3	)		57			(5	)		(376	)

Runoff segment		9			20			29			(2	)		14			13			10			35
Corporate and Other		(72	)		(73	)		(145	)		(54	)		(45	)		(75	)		(59	)		(233	)


ADJUSTED OPERATING INCOME (LOSS)	$	204		$	121		$	325		$	(291	)	$	145		$	200		$	125		$	179



Earnings (Loss) Per Share Data:
Net income (loss) available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.33		$	0.35		$	0.68		$	(0.66	)	$	0.29		$	0.38		$	0.22		$	0.24
Diluted	$	0.33		$	0.34		$	0.67		$	(0.66	)	$	0.29		$	0.38		$	0.22		$	0.24
Adjusted operating income (loss) per share
Basic	$	0.40		$	0.24		$	0.65		$	(0.58	)	$	0.29		$	0.40		$	0.25		$	0.36
Diluted	$	0.40		$	0.24		$	0.64		$	(0.58	)	$	0.29		$	0.40		$	0.25		$	0.36
Weighted-average common shares outstanding
Basic		503.4			501.2			502.3			500.8			500.7			500.6			499.6			500.4
Diluted⁽³⁾		508.7			508.6			508.7			500.8			503.3			502.6			502.7			504.2

⁽¹⁾	Net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests and DAC and other intangible amortization and certain benefit reserves (see page 46 for reconciliation).

⁽²⁾	For the three months ended June 30, 2019, (gains) losses on the early extinguishment of debt were adjusted for the portion attributable to noncontrolling interests of $1 million.

⁽³⁾

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Consolidated Balance Sheets

(amounts in millions)


	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
ASSETS
Investments:
Fixed maturity securities available-for-sale, at fair value	$	63,774	$	61,360	$	59,661	$	59,404	$	60,032
Equity securities, at fair value		644		635		655		783		758
Commercial mortgage loans⁽¹⁾		7,019		6,988		6,749		6,655		6,570
Policy loans		2,076		1,994		1,861		1,859		1,872
Other invested assets		1,535		1,208		1,188		1,354		1,650

Total investments		75,048		72,185		70,114		70,055		70,882
Cash, cash equivalents and restricted cash		1,938		2,221		2,177		2,505		2,243
Accrued investment income		626		726		675		657		602
Deferred acquisition costs		2,105		2,219		3,263		3,336		3,086
Intangible assets and goodwill		244		265		347		355		354
Reinsurance recoverable		17,211		17,257		17,278		17,351		17,385
Other assets		564		532		474		467		574
Deferred tax asset		383		573		736		650		601
Separate account assets		6,187		6,210		5,859		6,745		6,750

Total assets	$	104,306	$	102,188	$	100,923	$	102,121	$	102,477

⁽¹⁾	Included restricted commercial mortgage loans of $56 million, $59 million, $62 million, $87 million and $90 million, respectively, as of June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018 and June 30, 2018 related to a securitization entity.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Consolidated Balance Sheets

(amounts in millions)


	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	39,583		$	38,369		$	37,940		$	38,018		$	37,913
Policyholder account balances		22,673			22,651			22,968			22,993			23,366
Liability for policy and contract claims		10,677			10,536			10,379			9,844			9,665
Unearned premiums		3,488			3,482			3,546			3,668			3,669
Other liabilities		1,723			1,682			1,682			1,830			1,965
Borrowings related to a securitization entity		—			—			—			20			28
Non-recourse funding obligations		311			311			311			310			310
Long-term borrowings		4,044			4,035			4,025			4,051			4,047
Deferred tax liability		28			30			24			21			23
Separate account liabilities		6,187			6,210			5,859			6,745			6,750

Total liabilities		88,714			87,306			86,734			87,500			87,736

Equity:
Common stock		1			1			1			1			1
Additional paid-in capital		11,983			11,989			11,987			11,983			11,981

Accumulated other comprehensive income (loss):
Net unrealized investment gains (losses):
Net unrealized gains (losses) on securities not other-than-temporarily impaired		1,294			932			585			598			726
Net unrealized gains (losses) on other-than-temporarily impaired securities		11			11			10			10			10

Net unrealized investment gains (losses)		1,305			943			595			608			736
Derivatives qualifying as hedges		1,983			1,850			1,781			1,717			1,863
Foreign currency translation and other adjustments		(275	)		(301	)		(332	)		(258	)		(272	)

Total accumulated other comprehensive income		3,013			2,492			2,044			2,067			2,327
Retained earnings		1,460			1,292			1,118			1,447			1,301
Treasury stock, at cost		(2,700	)		(2,700	)		(2,700	)		(2,700	)		(2,700	)

Total Genworth Financial, Inc.’s stockholders’ equity		13,757			13,074			12,450			12,798			12,910
Noncontrolling interests		1,835			1,808			1,739			1,823			1,831

Total equity		15,592			14,882			14,189			14,621			14,741

Total liabilities and equity	$	104,306		$	102,188		$	100,923		$	102,121		$	102,477

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Consolidated Balance Sheet by Segment

(amounts in millions)


	June 30, 2019
	U.S. Mortgage Insurance		Canada Mortgage Insurance			Australia Mortgage Insurance		U.S. Life Insurance		Runoff		Corporate and Other⁽¹⁾			Total
ASSETS
Cash and investments	$	3,846	$	5,060		$	2,303	$	62,499	$	2,896	$	1,008		$	77,612
Deferred acquisition costs and intangible assets		50		140			65		1,911		173		10			2,349
Reinsurance recoverable		—		—			2		16,474		735		—			17,211
Deferred tax and other assets		81		72			154		118		27		495			947
Separate account assets		—		—			—		—		6,187		—			6,187

Total assets	$	3,977	$	5,272		$	2,524	$	81,002	$	10,018	$	1,513		$	104,306

LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	—	$	—		$	—	$	39,581	$	2	$	—		$	39,583
Policyholder account balances		—		—			—		19,434		3,239		—			22,673
Liability for policy and contract claims		254		91			209		10,102		13		8			10,677
Unearned premiums		419		1,571			997		497		4		—			3,488
Non-recourse funding obligations		—		—			—		311		—		—			311
Deferred tax and other liabilities		79		183			185		560		52		692			1,751
Borrowings and capital securities		—		333			140		—		—		3,571			4,044
Separate account liabilities		—		—			—		—		6,187		—			6,187

Total liabilities		752		2,178			1,531		70,485		9,497		4,271			88,714

Equity:
Allocated equity, excluding accumulated other comprehensive income (loss)		3,148		1,947			453		7,419		515		(2,738	)		10,744
Allocated accumulated other comprehensive income (loss)		77		(188	)		40		3,098		6		(20	)		3,013

Total Genworth Financial, Inc.’s stockholders’ equity		3,225		1,759			493		10,517		521		(2,758	)		13,757
Noncontrolling interests		—		1,335			500		—		—		—			1,835

Total equity		3,225		3,094			993		10,517		521		(2,758	)		15,592

Total liabilities and equity	$	3,977	$	5,272		$	2,524	$	81,002	$	10,018	$	1,513		$	104,306

⁽¹⁾	Includes inter-segment eliminations and other businesses that are managed outside the operating segments.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Consolidated Balance Sheet by Segment

(amounts in millions)


	March 31, 2019
	U.S. Mortgage Insurance		Canada Mortgage Insurance			Australia Mortgage Insurance		U.S. Life Insurance		Runoff		Corporate and Other⁽¹⁾			Total
ASSETS
Cash and investments	$	3,652	$	4,935		$	2,300	$	61,882	$	2,918	$	(555	)	$	75,132
Deferred acquisition costs and intangible assets		50		137			69		2,029		189		10			2,484
Reinsurance recoverable		—		—			4		16,513		740		—			17,257
Deferred tax and other assets		106		74			160		195		25		545			1,105
Separate account assets		—		—			—		—		6,210		—			6,210

Total assets	$	3,808	$	5,146		$	2,533	$	80,619	$	10,082	$	—		$	102,188

LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	—	$	—		$	—	$	38,367	$	2	$	—		$	38,369
Policyholder account balances		—		—			—		19,442		3,209		—			22,651
Liability for policy and contract claims		280		88			204		9,946		10		8			10,536
Unearned premiums		421		1,518			1,031		508		4		—			3,482
Non-recourse funding obligations		—		—			—		311		—		—			311
Deferred tax and other liabilities		104		169			177		618		48		596			1,712
Borrowings and capital securities		—		324			141		—		—		3,570			4,035
Separate account liabilities		—		—			—		—		6,210		—			6,210

Total liabilities		805		2,099			1,553		69,192		9,483		4,174			87,306

Equity:
Allocated equity, excluding accumulated other comprehensive income (loss)		2,973		1,960			450		8,726		598		(4,125	)		10,582
Allocated accumulated other comprehensive income (loss)		30		(229	)		38		2,701		1		(49	)		2,492

Total Genworth Financial, Inc.’s stockholders’ equity		3,003		1,731			488		11,427		599		(4,174	)		13,074
Noncontrolling interests		—		1,316			492		—		—		—			1,808

Total equity		3,003		3,047			980		11,427		599		(4,174	)		14,882

Total liabilities and equity	$	3,808	$	5,146		$	2,533	$	80,619	$	10,082	$	—		$	102,188

⁽¹⁾	Includes inter-segment eliminations and other businesses that are managed outside the operating segments.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Deferred Acquisition Costs Rollforward

(amounts in millions)


	U.S. Mortgage Insurance			Canada Mortgage Insurance			Australia Mortgage Insurance			U.S. Life Insurance			Runoff			Total
Unamortized balance as of March 31, 2019	$	28		$	122		$	38		$	3,320		$	188		$	3,696
Costs deferred		3			11			2			2			—			18
Amortization, net of interest accretion		(3	)		(10	)		(3	)		(62	)		(4	)		(82	)
Impact of foreign currency translation		—			2			—			—			—			2

Unamortized balance as of June 30, 2019		28			125			37			3,260			184			3,634
Effect of accumulated net unrealized investment (gains) losses		—			—			—			(1,510	)		(19	)		(1,529	)

Balance as of June 30, 2019	$	28		$	125		$	37		$	1,750		$	165		$	2,105

U.S. Mortgage Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Adjusted Operating Income and Sales—U.S. Mortgage Insurance Segment

(amounts in millions)


	2019						2018
	2Q		1Q		Total		4Q		3Q		2Q			1Q		Total
REVENUES:
Premiums	$	206	$	194	$	400	$	193	$	190	$	184		$	179	$	746
Net investment income		28		28		56		26		23		23			21		93
Net investment gains (losses)		—		—		—		—		—		—			—		—
Policy fees and other income		1		1		2		—		1		1			—		2

Total revenues		235		223		458		219		214		208			200		841

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		—		16		16		14		20		(14	)		16		15,800
Acquisition and operating expenses, net of deferrals		44		46		90		44		41		45			39		169
Amortization of deferred acquisition costs and intangibles		4		4		8		3		4		3			4		14

Total benefits and expenses		48		66		114		61		65		34			59		219

INCOME BEFORE INCOME TAXES		187		157		344		158		149		174			141		622
Provision for income taxes		40		33		73		34		31		37			30		132

NET INCOME		147		124		271		124		118		137			111		490

ADJUSTMENTS TO NET INCOME:
Net investment (gains) losses		—		—		—		—		—		—			—		—
Taxes on adjustments		—		—		—		—		—		—			—		—

ADJUSTED OPERATING INCOME	$	147	$	124	$	271	$	124	$	118	$	137		$	111	$	490


SALES:
Flow New Insurance Written (NIW)	$	15,800	$	9,600	$	25,400	$	9,300	$	10,300	$	11,400		$	9,000	$	40,000

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Flow New Insurance Written Metrics—U.S. Mortgage Insurance Segment

(amounts in millions)


	2019										2018
	2Q					1Q					4Q					3Q					2Q					1Q
	Flow NIW		% of Flow NIW			Flow NIW		% of Flow NIW			Flow NIW		% of Flow NIW			Flow NIW		% of Flow NIW			Flow NIW		% of Flow NIW			Flow NIW		% of Flow NIW
Product
Monthly⁽¹⁾	$	13,900		88	%	$	8,400		87	%	$	7,900		85	%	$	8,400		82	%	$	9,700		85	%	$	7,300		81	%
Single		1,900		12			1,200		13			1,400		15			1,900		18			1,700		15			1,700		19

Total Flow	$	15,800		100	%	$	9,600		100	%	$	9,300		100	%	$	10,300		100	%	$	11,400		100	%	$	9,000		100	%

FICO Scores
Over 735	$	9,200		58	%	$	5,500		57	%	$	5,200		56	%	$	6,000		58	%	$	6,900		60	%	$	5,300		59	%
680-735		5,500		35			3,300		35			3,200		35			3,300		32			3,700		32			3,000		33
660-679⁽²⁾		600		4			400		4			500		5			500		5			400		4			400		5
620-659		500		3			400		4			400		4			500		5			400		4			300		3
<620		—		—			—		—			—		—			—		—			—		—			—		—

Total Flow	$	15,800		100	%	$	9,600		100	%	$	9,300		100	%	$	10,300		100	%	$	11,400		100	%	$	9,000		100	%

Loan-To-Value Ratio
95.01% and above	$	2,900		18	%	$	1,800		19	%	$	2,000		21	%	$	2,000		19	%	$	2,400		21	%	$	1,600		18	%
90.01% to 95.00%		6,900		44			4,200		44			4,000		43			4,500		44			4,900		43			3,900		43
85.01% to 90.00%		4,300		27			2,500		26			2,300		25			2,800		27			2,900		25			2,500		28
85.00% and below		1,700		11			1,100		11			1,000		11			1,000		10			1,200		11			1,000		11

Total Flow	$	15,800		100	%	$	9,600		100	%	$	9,300		100	%	$	10,300		100	%	$	11,400		100	%	$	9,000		100	%

Origination
Purchase	$	13,900		88	%	$	8,600		90	%	$	8,800		95	%	$	9,800		95	%	$	10,700		94	%	$	8,000		89	%
Refinance		1,900		12			1,000		10			500		5			500		5			700		6			1,000		11

Total Flow	$	15,800		100	%	$	9,600		100	%	$	9,300		100	%	$	10,300		100	%	$	11,400		100	%	$	9,000		100	%

⁽¹⁾	Includes loans with annual and split payment types.

⁽²⁾	Loans with unknown FICO scores are included in the 660-679 category.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Other Metrics—U.S. Mortgage Insurance Segment

(dollar amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net Premiums Written	$	204		$	193		$	397		$	192		$	195		$	191		$	185		$	763

Flow New Risk Written	$	3,931		$	2,403		$	6,334		$	2,300		$	2,559		$	2,866		$	2,247		$	9,972

Primary Insurance In-Force⁽¹⁾	$	178,500		$	170,400					$	166,700		$	163,200		$	159,500		$	154,900
Risk In-Force
Flow⁽²⁾	$	42,917		$	41,020					$	40,115		$	39,304		$	38,433		$	37,252
Bulk⁽³⁾		167			173						178			188			195			202

Total Primary		43,084			41,193						40,293			39,492			38,628			37,454
Pool		62			66						69			72			75			80

Total Risk In-Force	$	43,146		$	41,259					$	40,362		$	39,564		$	38,703		$	37,534


Primary Risk In-Force That Is GSE Conforming		93	%		93	%					94	%		94	%		94	%		94	%

Expense Ratio (Net Earned Premiums)⁽⁴⁾		24	%		25	%		25	%		24	%		23	%		26	%		24	%		25	%

Expense Ratio (Net Premiums Written)⁽⁵⁾		24	%		26	%		25	%		25	%		23	%		25	%		23	%		24	%

Flow Persistency		82	%		86	%					86	%		84	%		83	%		84	%

Risk To Capital Ratio⁽⁶⁾		11.8:1			11.9:1						12.2:1			12.3:1			12.6:1			12.5:1

PMIERs Sufficiency Ratio⁽⁷⁾		123	%		123	%					129	%		130	%		129	%		124	%

Average Primary Loan Size (in thousands)	$	218		$	215					$	213		$	211		$	209		$	207

The expense ratios included above were calculated using whole dollars and may be different than the ratios calculated using the rounded numbers included herein.

⁽¹⁾

Primary insurance in-force represents aggregate loan balances for outstanding insurance policies and is used to determine premiums. Original loan balances are presented for policies with level renewal premiums. Amortized loan balances are presented for policies with annual, amortizing renewal premiums.

⁽²⁾	Flow risk in-force represents current loan balances as provided by servicers, lenders and investors and conforms to the presentation under the Private Mortgage Insurer Eligibility Requirements (PMIERs).

⁽³⁾	As of June 30, 2019, 88% of the bulk risk in-force was related to loans financed by lenders who participated in the mortgage programs sponsored by the Federal Home Loan Banks.

⁽⁴⁾	The ratio of an insurer’s general expenses to net earned premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.

⁽⁵⁾	The ratio of an insurer’s general expenses to net premiums written. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.

⁽⁶⁾

Certain states limit a private mortgage insurer’s risk in-force to 25 times the total of the insurer’s policyholders’ surplus plus the statutory contingency reserve, commonly known as the “risk to capital” requirement. The current period risk to capital ratio is an estimate due to the timing of the filing of statutory statements and is prepared consistent with the presentation of the statutory financial statements in the combined annual statement of the U.S. mortgage insurance business.

⁽⁷⁾

The PMIERs sufficiency ratio is calculated as available assets divided by required assets as defined within PMIERs. The current period PMIERs sufficiency ratio is an estimate due to the timing of the PMIERs filing for the U.S. mortgage insurance business. As of June 30, 2019 and March 31, 2019, the PMIERs sufficiency ratios were in excess of $650 million and $600 million, respectively, of available assets above the PMIERs requirements. As of December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, the PMIERs sufficiency ratios were in excess of $750 million, $750 million, $700 million and $600 million, respectively, of available assets above the prior PMIERs requirements.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Loss Metrics—U.S. Mortgage Insurance Segment

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Paid claims
Flow
Direct	$	24		$	30		$	54		$	34		$	52		$	45		$	53		$	184
Assumed⁽¹⁾		—			—			—			—			—			—			1			1
Ceded		—			—			—			—			—			—			(1	)		(1	)
Loss adjustment expenses		2			2			4			—			3			2			2			7

Total Flow		26			32			58			34			55			47			55			191
Bulk		—			—			—			—			1			—			1			2

Total Primary		26			32			58			34			56			47			56			193
Pool		—			—			—			—			—			1			—			1

Total Paid Claims	$	26		$	32		$	58		$	34		$	56		$	48		$	56		$	194


Average Paid Claim (in thousands)	$	45.4		$	49.0					$	41.4		$	45.9		$	43.1		$	47.5

Average Reserve Per Delinquency (in thousands)
Flow	$	16.5		$	17.4					$	17.3		$	18.8		$	19.6		$	20.2
Bulk loans with established reserve	$	14.1		$	13.8					$	14.6		$	17.6		$	18.4		$	17.6

Reserves:
Flow direct case	$	222		$	246					$	261		$	280		$	314		$	372
Bulk direct case		4			4						5			7			8			8
Assumed⁽¹⁾		1			1						2			2			2			2
All other⁽²⁾		27			29						28			28			28			33

Total Reserves	$	254		$	280					$	296		$	317		$	352		$	415


Beginning Reserves	$	280		$	296		$	296		$	317		$	352		$	415		$	455		$	455
Paid claims		(26	)		(32	)		(58	)		(34	)		(56	)		(48	)		(57	)		(195	)
Increase (decrease) in reserves		—			16			16			13			21			(15	)		17			36

Ending Reserves	$	254		$	280		$	254		$	296		$	317		$	352		$	415		$	296


Beginning Reinsurance Recoverable⁽³⁾	$	—		$	—		$	—		$	—		$	—		$	—		$	1		$	1
Ceded paid claims		—			—			—			—			—			—			(1	)		(1	)

Ending Reinsurance Recoverable	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Loss Ratio⁽⁴⁾		—	%		8	%		4	%		7	%		11	%		(8	)%		9	%		5	%

The loss ratio included above was calculated using whole dollars and may be different than the ratio calculated using the rounded numbers included herein.

⁽¹⁾	Assumed is comprised of reinsurance arrangements with state governmental housing finance agencies.

⁽²⁾	Other includes loss adjustment expenses, pool and incurred but not reported reserves.

⁽³⁾	Reinsurance recoverable excludes ceded unearned premium recoveries and amounts for which cash proceeds have not yet been received.

⁽⁴⁾

The ratio of benefits and other changes in policy reserves to net earned premiums. During the second quarter of 2019, the company recorded a favorable reserve adjustment of $10 million, which reduced the loss ratio by five percentage points for the three months ended June 30, 2019. During the second quarter of 2018, the company recorded a favorable reserve adjustment of $28 million, which reduced the loss ratio by four percentage points for the twelve months ended December 31, 2018 and 15 percentage points for the three months ended June 30, 2018.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Delinquency Metrics—U.S. Mortgage Insurance Segment

(dollar amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Number of Primary Delinquencies
Flow		15,070			15,764						16,670			16,367			17,505			20,007
Bulk loans with an established reserve		347			360						403			415			445			494
Bulk loans with no reserve⁽¹⁾		65			82						86			92			101			101

Total Number of Primary Delinquencies		15,482			16,206						17,159			16,874			18,051			20,602


Beginning Number of Primary Delinquencies		16,206			17,159			17,159			16,874			18,051			20,602			23,188			23,188
New delinquencies		7,705			8,539			16,244			8,719			7,884			7,049			8,409			32,061
Delinquency cures		(7,872	)		(8,835	)		(16,707	)		(7,601	)		(7,857	)		(8,488	)		(9,840	)		(33,786	)
Paid claims		(557	)		(657	)		(1,214	)		(833	)		(1,204	)		(1,112	)		(1,155	)		(4,304	)

Ending Number of Primary Delinquencies		15,482			16,206			15,482			17,159			16,874			18,051			20,602			17,159

Composition of Cures
Reported delinquent and cured-intraquarter		1,621			2,342						1,767			1,651			1,514			2,288
Number of missed payments delinquent prior to cure:
3 payments or less		4,567			4,862						4,131			3,951			4,568			5,413
4 - 11 payments		1,434			1,345						1,382			1,943			2,070			1,719
12 payments or more		250			286						321			312			336			420

Total		7,872			8,835						7,601			7,857			8,488			9,840

Primary Delinquencies by Missed Payment Status
3 payments or less		7,807			7,873						8,578			7,853			7,539			8,335
4 - 11 payments		4,243			4,755						4,689			4,745			5,657			6,875
12 payments or more		3,432			3,578						3,892			4,276			4,855			5,392

Primary Delinquencies		15,482			16,206						17,159			16,874			18,051			20,602



	June 30, 2019
Flow Delinquencies and Percentage Reserved by Payment Status	Delinquencies			Direct Case Reserves⁽²⁾			Risk In-Force			Reserves as % of Risk In-Force
3 payments or less in default		7,629		$	26		$	341			8	%
4 - 11 payments in default		4,162			75			190			39	%
12 payments or more in default		3,279			121			167			72	%

Total		15,070		$	222		$	698			32	%


	December 31, 2018
Flow Delinquencies and Percentage Reserved by Payment Status	Delinquencies			Direct Case Reserves⁽²⁾			Risk In-Force			Reserves as % of Risk In-Force
3 payments or less in default		8,360		$	31		$	365			8	%
4 - 11 payments in default		4,591			88			208			42	%
12 payments or more in default		3,719			142			188			76	%

Total		16,670		$	261		$	761			34	%

⁽¹⁾	Reserves were not established on loans where the company was in a secondary loss position due to an existing deductible and the company believes they currently have no risk for claim.

⁽²⁾	Direct flow case reserves exclude loss adjustment expenses, incurred but not reported and reinsurance reserves.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Portfolio Quality Metrics—U.S. Mortgage Insurance Segment


	2019						2018
	2Q			1Q			4Q			3Q			2Q			1Q
Primary Loans
Primary loans in-force		818,358			792,800			783,288			773,290			762,727			749,145
Primary delinquent loans		15,482			16,206			17,159			16,874			18,051			20,602
Primary delinquency rate		1.89	%		2.04	%		2.19	%		2.18	%		2.37	%		2.75	%

Flow loans in-force		806,739			780,733			770,657			759,965			748,497			734,411
Flow delinquent loans		15,070			15,764			16,670			16,367			17,505			20,007
Flow delinquency rate		1.87	%		2.02	%		2.16	%		2.15	%		2.34	%		2.72	%

Bulk loans in-force		11,619			12,067			12,631			13,325			14,230			14,734
Bulk delinquent loans		412			442			489			507			546			595
Bulk delinquency rate		3.55	%		3.66	%		3.87	%		3.80	%		3.84	%		4.04	%

A minus and sub-prime loans in-force		14,180			14,712			15,348			16,087			16,928			17,964
A minus and sub-prime delinquent loans		2,367			2,530			2,727			2,817			3,058			3,557
A minus and sub-prime delinquency rate		16.69	%		17.20	%		17.77	%		17.51	%		18.06	%		19.80	%

Pool Loans
Pool loans in-force		4,331			4,470			4,535			4,636			4,774			4,961
Pool delinquent loans		177			187			220			215			204			220
Pool delinquency rate		4.09	%		4.18	%		4.85	%		4.64	%		4.27	%		4.43	%

Primary Risk In-Force by Credit Quality
Over 735		57	%		57	%		57	%		57	%		57	%		57	%
680-735		32	%		32	%		32	%		32	%		32	%		32	%
660-679⁽¹⁾		5	%		5	%		5	%		5	%		5	%		5	%
620-659		5	%		5	%		5	%		5	%		5	%		5	%
<620		1	%		1	%		1	%		1	%		1	%		1	%

⁽¹⁾	Loans with unknown FICO scores are included in the 660-679 category.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Portfolio Quality Metrics—U.S. Mortgage Insurance Segment

(amounts in millions)


	June 30, 2019
Policy Year	Average Rate⁽¹⁾			% of Total Reserves⁽²⁾			Primary Insurance In-Force		% of Total			Primary Risk In-Force		% of Total			Delinquency Rate
2004 and prior		6.10	%		8.4	%	$	1,515		0.9	%	$	285		0.7	%		11.39	%
2005 to 2008		5.47	%		58.2			17,576		9.8			4,037		9.4			7.79	%
2009 to 2012		4.29	%		2.2			3,934		2.2			913		2.1			1.80	%
2013		4.11	%		1.8			4,755		2.7			1,162		2.7			1.44	%
2014		4.45	%		4.4			8,277		4.6			2,013		4.7			1.80	%
2015		4.15	%		6.2			16,648		9.3			4,023		9.3			1.27	%
2016		3.89	%		7.5			30,515		17.1			7,348		17.0			0.93	%
2017		4.25	%		7.2			33,245		18.6			8,087		18.8			0.90	%
2018		4.77	%		3.9			36,887		20.7			9,025		20.9			0.49	%
2019		4.75	%		0.2			25,129		14.1			6,191		14.4			0.07	%

Total		4.53	%		100.0	%	$	178,481		100.0	%	$	43,084		100.0	%		1.89	%


	June 30, 2019						March 31, 2019					June 30, 2018
	Primary Risk In-Force			Primary Delinquency Rate			Primary Risk In-Force		Primary Delinquency Rate			Primary Risk In-Force		Primary Delinquency Rate
Lender concentration (by original applicant)	$	43,084			1.89	%	$	41,193		2.04	%	$	38,628		2.37	%
Top 10 lenders	$	12,597			2.11	%	$	11,617		2.38	%	$	11,249		2.83	%
Top 20 lenders	$	16,729			2.03	%	$	15,555		2.27	%	$	15,014		2.75	%

Loan-to-value ratio
95.01% and above	$	7,837			3.16	%	$	7,401		3.46	%	$	6,594		4.22	%
90.01% to 95.00%		22,389			1.49	%		21,433		1.59	%		20,088		1.75	%
80.01% to 90.00%		12,699			1.59	%		12,195		1.73	%		11,762		2.05	%
80.00% and below		159			2.43	%		164		2.43	%		184		2.81	%

Total	$	43,084			1.89	%	$	41,193		2.04	%	$	38,628		2.37	%

Loan grade
Prime	$	42,587			1.63	%	$	40,678		1.76	%	$	38,035		2.01	%
A minus and sub-prime		497			16.69	%		515		17.20	%		593		18.06	%

Total	$	43,084			1.89	%	$	41,193		2.04	%	$	38,628		2.37	%

⁽¹⁾	Average Annual Mortgage Interest Rate.

⁽²⁾	Total reserves were $254 million as of June 30, 2019.

Canada Mortgage Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Adjusted Operating Income and Sales—Canada Mortgage Insurance Segment

(amounts in millions)


	2019								2018
	2Q			1Q			Total		4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	125		$	126		$	251	$	128		$	127		$	131		$	139		$	525
Net investment income		35			34			69		36			34			34			34			138
Net investment gains (losses)		1			(1	)		—		(136	)		29			(15	)		(15	)		(137	)

Total revenues		161			159			320		28			190			150			158			526

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		19			19			38		23			18			19			18			78
Acquisition and operating expenses, net of deferrals		22			20			42		16			17			20			17			70
Amortization of deferred acquisition costs and intangibles		11			10			21		11			11			11			10			43
Interest expense		5			4			9		5			4			4			5			18

Total benefits and expenses		57			53			110		55			50			54			50			209

INCOME (LOSS) BEFORE INCOME TAXES		104			106			210		(27	)		140			96			108			317
Provision (benefit) for income taxes		29			29			58		(7	)		37			24			30			84

NET INCOME (LOSS)		75			77			152		(20	)		103			72			78			233
Less: net income (loss) attributable to noncontrolling interests		35			36			71		(6	)		46			32			36			108

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS		40			41			81		(14	)		57			40			42			125

ADJUSTMENTS TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Net investment (gains) losses, net⁽¹⁾		—			—			—		78			(17	)		8			9			78
(Gains) losses on early extinguishment of debt, net⁽²⁾		1			—			1		—			—			—			—			—
Taxes on adjustments		—			—			—		(16	)		4			(2	)		(2	)		(16	)

ADJUSTED OPERATING INCOME⁽³⁾	$	41		$	41		$	82	$	48		$	44		$	46		$	49		$	187



SALES:
New Insurance Written (NIW)
Flow	$	3,900		$	2,200		$	6,100	$	3,300		$	4,200		$	3,700		$	2,500		$	13,700
Bulk		1,900			700			2,600		900			600			900			900			3,300

Total Canada NIW⁽⁴⁾	$	5,800		$	2,900		$	8,700	$	4,200		$	4,800		$	4,600		$	3,400		$	17,000


⁽¹⁾ Net investment (gains) losses were adjusted for the portion of net investment gains (losses) attributable to noncontrolling interests as reconciled below:

Net investment (gains) losses, gross	$	(1	)	$	1		$	—	$	136		$	(29	)	$	15		$	15		$	137
Adjustment for net investment gains (losses) attributable to noncontrolling interests		1			(1	)		—		(58	)		12			(7	)		(6	)		(59	)

Net investment (gains) losses, net	$	—		$	—		$	—	$	78		$	(17	)	$	8		$	9		$	78

⁽²⁾	For the three months ended June 30, 2019, (gains) losses on the early extinguishment of debt were adjusted for the portion attributable to noncontrolling interests of $1 million.

⁽³⁾	Adjusted operating income for the Canadian platform adjusted for foreign exchange as compared to the prior year period was $43 million and $87 million for the three and six months ended June 30, 2019, respectively.

⁽⁴⁾	New insurance written for the Canadian platform adjusted for foreign exchange as compared to the prior year period was $6,100 million and $9,100 million for the three and six months ended June 30, 2019, respectively.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Selected Key Performance Measures—Canada Mortgage Insurance Segment

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net Premiums Written	$	145		$	79		$	224		$	119		$	150		$	133		$	92		$	494
Loss Ratio⁽¹⁾		15	%		15	%		15	%		18	%		14	%		15	%		13	%		15	%
Expense Ratio (Net Earned Premiums)⁽²⁾		26	%		24	%		25	%		21	%		22	%		23	%		20	%		22	%
Expense Ratio (Net Premiums Written)⁽³⁾		22	%		39	%		28	%		23	%		19	%		23	%		30	%		23	%

Primary Insurance In-Force⁽⁴⁾	$	395,700		$	382,200					$	372,000		$	389,400		$	380,200		$	384,600
Primary Risk In-Force⁽⁵⁾
Flow	$	94,900		$	91,600					$	89,000		$	92,800		$	89,800		$	90,500
Bulk		43,600			42,200						41,200			43,500			43,300			44,100

Total	$	138,500		$	133,800					$	130,200		$	136,300		$	133,100		$	134,600



	June 30, 2019									March 31, 2019
Risk In-Force by Loan-To-Value Ratio⁽⁶⁾	Primary			Flow			Bulk			Primary			Flow			Bulk
95.01% and above	$	47,842		$	47,842		$	—		$	45,964		$	45,964		$	—
90.01% to 95.00%		27,898			27,898			—			26,987			26,987			—
80.01% to 90.00%		15,974			15,974			—			15,532			15,532			—
80.00% and below		46,774			3,152			43,622			45,303			3,075			42,228

Total	$	138,488		$	94,866		$	43,622		$	133,786		$	91,558		$	42,228

The loss and expense ratios included above were calculated using whole dollars and may be different than the ratios calculated using the rounded numbers included herein.

⁽¹⁾	The ratio of benefits and other changes in policy reserves to net earned premiums.

⁽²⁾	The ratio of an insurer’s general expenses to net earned premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.

⁽³⁾	The ratio of an insurer’s general expenses to net premiums written. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.

⁽⁴⁾

As part of an ongoing effort to improve the estimate of outstanding insurance exposure, the company is receiving updated outstanding balances in Canada from almost all of its customers. As a result, the company estimates that the outstanding balance of insured mortgages was approximately $157.0 billion, $154.0 billion, $152.0 billion, $163.0 billion, $162.0 billion and $168.0 billion as of June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively. This is based on the extrapolation of the amounts reported by lenders to the entire insured population. The current period reported amount is an estimate due to the timing of information received by the company’s customers.

⁽⁵⁾

The business currently provides 100% coverage on the majority of the loans the company insures. For the purpose of representing the risk in-force, Canada 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 that represents the highest expected average per-claim payment for any one underwriting year over the life of the business. This factor was 35% for all periods presented.

⁽⁶⁾	Loan amount in loan-to-value ratio calculation includes capitalized premiums, where applicable.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Selected Key Performance Measures—Canada Mortgage Insurance Segment

(dollar amounts in millions)


Primary Insurance	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Insured loans in-force^(1),(2)		2,174,084			2,152,048			2,143,191			2,133,618			2,137,221
Insured delinquent loans		1,701			1,760			1,684			1,695			1,742
Insured delinquency rate^(2),(3)		0.08	%		0.08	%		0.08	%		0.08	%		0.08	%

Flow loans in-force⁽¹⁾		1,523,128			1,507,283			1,499,304			1,486,859			1,470,826
Flow delinquent loans		1,340			1,384			1,310			1,327			1,406
Flow delinquency rate⁽³⁾		0.09	%		0.09	%		0.09	%		0.09	%		0.10	%

Bulk loans in-force⁽¹⁾		650,956			644,765			643,887			646,759			666,395
Bulk delinquent loans		361			376			374			368			336
Bulk delinquency rate⁽³⁾		0.06	%		0.06	%		0.06	%		0.06	%		0.05	%

Loss Metrics	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Beginning Reserves	$	88		$	84		$	82		$	83		$	84
Paid claims⁽⁴⁾		(18	)		(19	)		(18	)		(19	)		(20	)
Increase in reserves		19			21			24			17			21
Impact of changes in foreign exchange rates		2			2			(4	)		1			(2	)

Ending Reserves	$	91		$	88		$	84		$	82		$	83


	June 30, 2019						March 31, 2019						June 30, 2018
Province and Territory	% of Primary Risk In-Force			Primary Delinquency Rate			% of Primary Risk In-Force			Primary Delinquency Rate			% of Primary Risk In-Force			Primary Delinquency Rate
Ontario		47	%		0.03	%		47	%		0.03	%		47	%		0.03	%
Alberta		17			0.21	%		17			0.19	%		16			0.17	%
British Columbia		14			0.04	%		14			0.04	%		14			0.04	%
Quebec		13			0.07	%		13			0.09	%		13			0.10	%
Saskatchewan		3			0.27	%		3			0.29	%		3			0.28	%
Nova Scotia		2			0.13	%		2			0.13	%		2			0.15	%
Manitoba		2			0.09	%		2			0.11	%		2			0.10	%
New Brunswick		1			0.08	%		1			0.13	%		1			0.15	%
All Other		1			0.20	%		1			0.20	%		2			0.20	%

Total		100	%		0.08	%		100	%		0.08	%		100	%		0.08	%


By Policy Year
2010 and prior		39	%		0.04	%		39	%		0.04	%		41	%		0.05	%
2011		5			0.14	%		5			0.15	%		5			0.13	%
2012		6			0.16	%		6			0.17	%		6			0.18	%
2013		6			0.16	%		6			0.18	%		6			0.15	%
2014		7			0.17	%		7			0.17	%		8			0.16	%
2015		10			0.11	%		11			0.12	%		11			0.11	%
2016		13			0.08	%		13			0.08	%		13			0.08	%
2017		7			0.09	%		7			0.08	%		7			0.04	%
2018		5			0.03	%		5			0.02	%		3			—	%
2019		2			—	%		1			—	%		—			—	%

Total		100	%		0.08	%		100	%		0.08	%		100	%		0.08	%

⁽¹⁾	Insured loans in-force represent the original number of loans insured for which the coverage term has not expired, and for which no policy level cancellation or termination has been received.

⁽²⁾

As part of an ongoing effort to improve the estimate of outstanding insurance exposure, the company is receiving updated outstanding loans in-force in Canada from almost all of its customers. As a result, the company estimates that the outstanding loans in-force were 901,000 as of June 30, 2019, 902,000 as of March 31, 2019, 910,000 as of December 31, 2018, 924,000 as of September 30, 2018 and 935,000 as of June 30, 2018. This is based on the extrapolation of the amounts reported by lenders to the entire insured population. The corresponding insured delinquency rate was 0.19% as of June 30, 2019, 0.20% as of March 31, 2019, 0.18% as of December 31, 2018 and September 30, 2018 and 0.19% as of June 30, 2018. The current period reported amounts are estimates due to the timing of information received by the company’s customers.

⁽³⁾	Delinquency rates are based on insured loans in-force.

⁽⁴⁾	Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Selected Key Performance Measures—Canada Mortgage Insurance Segment

(Canadian dollar amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Paid claims⁽¹⁾
Flow	$	22		$	26		$	48		$	18		$	23		$	26		$	23		$	90
Bulk		1			1			2			2			2			1			2			7

Total Paid Claims	$	23		$	27		$	50		$	20		$	25		$	27		$	25		$	97


Average Paid Claim (in thousands)	$	67.0		$	81.2					$	58.1		$	67.4		$	79.4		$	68.5

Average Reserve Per Delinquency (in thousands)	$	69.9		$	66.4					$	68.0		$	62.6		$	62.5		$	62.7

Loss Metrics
Beginning Reserves	$	117		$	115		$	115		$	106		$	109		$	108		$	109		$	109
Paid claims⁽¹⁾		(23	)		(27	)		(50	)		(20	)		(25	)		(27	)		(25	)		(97	)
Increase in reserves		25			29			54			29			22			28			24			103

Ending Reserves	$	119		$	117		$	119		$	115		$	106		$	109		$	108		$	115

Loan Amount⁽²⁾
Over $550K		9	%		9	%					9	%		9	%		9	%		8	%
$400K to $550K		15			15						15			15			15			15
$250K to $400K		35			35						35			34			34			34
$100K to $250K		38			38						38			39			39			39
$100K or Less		3			3						3			3			3			4

Total		100	%		100	%					100	%		100	%		100	%		100	%


Average Primary Loan Size (in thousands)	$	238		$	237					$	237		$	236		$	234		$	233

All amounts presented in Canadian dollars.

⁽¹⁾	Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims.

⁽²⁾	The percentages in this table are based on the amount of primary insurance in-force in each loan band as a percentage of total insurance in-force.

Australia Mortgage Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Adjusted Operating Income and Sales—Australia Mortgage Insurance Segment

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	80		$	83		$	163		$	82		$	87		$	106		$	98		$	373
Net investment income		15			16			31			15			17			18			17			67
Net investment gains (losses)		1			12			13			(19	)		1			12			(9	)		(15	)
Policy fees and other income		—			(1	)		(1	)		1			—			—			1			2

Total revenues		96			110			206			79			105			136			107			427

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		26			28			54			24			27			29			30			110
Acquisition and operating expenses, net of deferrals		17			17			34			16			15			17			17			65
Amortization of deferred acquisition costs and intangibles		9			9			18			10			10			12			11			43
Interest expense		2			2			4			2			3			2			2			9

Total benefits and expenses		54			56			110			52			55			60			60			227

INCOME BEFORE INCOME TAXES		42			54			96			27			50			76			47			200
Provision for income taxes		13			16			29			8			15			23			14			60

NET INCOME		29			38			67			19			35			53			33			140
Less: net income attributable to noncontrolling interests		15			20			35			8			18			27			17			70

NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS		14			18			32			11			17			26			16			70

ADJUSTMENTS TO NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Net investment (gains) losses, net⁽¹⁾		(1	)		(6	)		(7	)		10			—			(6	)		4			8
Taxes on adjustments		—			2			2			(3	)		—			2			(1	)		(2	)

ADJUSTED OPERATING INCOME⁽²⁾	$	13		$	14		$	27		$	18		$	17		$	22		$	19		$	76


SALES:
New Insurance Written (NIW)
Flow	$	3,700		$	3,400		$	7,100		$	4,000		$	3,800		$	3,700		$	3,400		$	14,900
Bulk		1,200			500			1,700			800			—			900			—			1,700

Total Australia NIW^(3),(4)	$	4,900		$	3,900		$	8,800		$	4,800		$	3,800		$	4,600		$	3,400		$	16,600


⁽¹⁾ Net investment (gains) losses were adjusted for the portion of net investment gains (losses) attributable to noncontrolling interests as reconciled below:
Net investment (gains) losses, gross	$	(1	)	$	(12	)	$	(13	)	$	19		$	(1	)	$	(12	)	$	9		$	15
Adjustment for net investment gains (losses) attributable to noncontrolling interests		—			6			6			(9	)		1			6			(5	)		(7	)

Net investment (gains) losses, net	$	(1	)	$	(6	)	$	(7	)	$	10		$	—		$	(6	)	$	4		$	8

⁽²⁾	Adjusted operating income for the Australian platform adjusted for foreign exchange as compared to the prior year period was $14 million and $30 million for the three and six months ended June 30, 2019, respectively.

⁽³⁾	New insurance written for the Australian platform adjusted for foreign exchange as compared to the prior year period was $5,400 million and $9,600 million for the three and six months ended June 30, 2019, respectively.

⁽⁴⁾	The business currently has structured insurance transactions with three lenders where it is in a secondary loss position. The new insurance written associated with these arrangements is excluded from these metrics.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net Premiums Written	$	58		$	52		$	110		$	70		$	56		$	56		$	60		$	242
Loss Ratio⁽¹⁾		34	%		34	%		34	%		29	%		31	%		28	%		30	%		30	%
Expense Ratio (Net Earned Premiums)⁽²⁾		33	%		31	%		32	%		32	%		29	%		27	%		29	%		29	%
Expense Ratio (Net Premiums Written)⁽³⁾		44	%		50	%		47	%		38	%		46	%		50	%		47	%		45	%

Primary Insurance In-Force⁽⁴⁾	$	215,600		$	219,200					$	218,200		$	222,500		$	229,400		$	246,300
Primary Risk In-Force^(4),(5)
Flow	$	69,100		$	70,600					$	70,300		$	71,900		$	74,000		$	79,600
Bulk		6,000			5,700						5,700			5,600			5,900			6,100

Total	$	75,100		$	76,300					$	76,000		$	77,500		$	79,900		$	85,700



	June 30, 2019									March 31, 2019
Risk In-Force by Loan-To-Value Ratio^(4),(6)	Primary			Flow			Bulk			Primary			Flow			Bulk
95.01% and above	$	10,624		$	10,624		$	—		$	11,045		$	11,045		$	—
90.01% to 95.00%		20,938			20,932			6			21,247			21,242			5
80.01% to 90.00%		22,722			22,656			66			22,845			22,783			62
80.00% and below		20,809			14,924			5,885			21,170			15,511			5,659

Total	$	75,093		$	69,136		$	5,957		$	76,307		$	70,581		$	5,726

The loss and expense ratios included above were calculated using whole dollars and may be different than the ratios calculated using the rounded numbers included herein.

⁽¹⁾	The ratio of benefits and other changes in policy reserves to net earned premiums.

⁽²⁾	The ratio of an insurer’s general expenses to net earned premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.

⁽³⁾	The ratio of an insurer’s general expenses to net premiums written. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.

⁽⁴⁾

The business currently has structured insurance transactions with three lenders where it is in a secondary loss position. The insurance in-force and risk in-force associated with these arrangements are excluded from these metrics. The risk in-force on these transactions was approximately $157 million, $157 million, $154 million, $158 million, $159 million and $160 million as of June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively.

⁽⁵⁾

The business currently provides 100% coverage on the majority of the loans the company insures. For the purpose of representing the risk in-force, Australia 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 that represents the highest expected average per-claim payment for any one underwriting year over the life of the business. This factor was 35% for all periods presented. Australia also has certain risk share arrangements where it provides pro-rata coverage of certain loans rather than 100% coverage. As a result, for loans with these risk share arrangements, the applicable pro-rata coverage amount provided is used when applying the factor.

⁽⁶⁾	Loan amount in loan-to-value ratio calculation includes capitalized premiums, where applicable.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(dollar amounts in millions)


Primary Insurance⁽¹⁾	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Insured loans in-force		1,308,811			1,323,172			1,332,906			1,335,133			1,354,614
Insured delinquent loans		7,891			7,490			7,145			7,350			7,306
Insured delinquency rate		0.60	%		0.57	%		0.54	%		0.55	%		0.54	%
Flow loans in-force		1,200,603			1,217,050			1,226,219			1,229,558			1,247,229
Flow delinquent loans		7,642			7,265			6,931			7,133			7,076
Flow delinquency rate		0.64	%		0.60	%		0.57	%		0.58	%		0.57	%
Bulk loans in-force		108,208			106,122			106,687			105,575			107,385
Bulk delinquent loans		249			225			214			217			230
Bulk delinquency rate		0.23	%		0.21	%		0.20	%		0.21	%		0.21	%
Loss Metrics	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Beginning Reserves	$	204		$	196		$	201		$	206		$	211
Paid claims⁽²⁾		(20	)		(22	)		(25	)		(27	)		(25	)
Increase in reserves		27			28			25			26			29
Impact of changes in foreign exchange rates		(2	)		2			(5	)		(4	)		(9	)

Ending Reserves	$	209		$	204		$	196		$	201		$	206


	June 30, 2019						March 31, 2019						June 30, 2018
State and Territory⁽¹⁾	% of Primary Risk In-Force			Primary Delinquency Rate			% of Primary Risk In-Force			Primary Delinquency Rate			% of Primary Risk In-Force			Primary Delinquency Rate
New South Wales		27	%		0.45	%		28	%		0.41	%		28	%		0.37	%
Queensland		23			0.81	%		23			0.74	%		23			0.73	%
Victoria		23			0.45	%		22			0.42	%		23			0.42	%
Western Australia		13			1.10	%		13			1.05	%		12			0.99	%
South Australia		6			0.68	%		6			0.69	%		6			0.67	%
Australian Capital Territory		3			0.25	%		3			0.19	%		3			0.18	%
Tasmania		2			0.31	%		2			0.28	%		2			0.34	%
New Zealand		2			0.02	%		2			0.04	%		2			0.06	%
Northern Territory		1			0.83	%		1			0.76	%		1			0.61	%

Total		100	%		0.60	%		100	%		0.57	%		100	%		0.54	%


By Policy Year⁽¹⁾
2010 and prior		44	%		0.52	%		45	%		0.49	%		47	%		0.49	%
2011		4			0.80	%		4			0.78	%		5			0.75	%
2012		6			1.11	%		6			1.05	%		6			0.92	%
2013		7			1.10	%		7			0.98	%		7			0.87	%
2014		8			0.97	%		8			0.90	%		9			0.79	%
2015		7			0.82	%		8			0.74	%		8			0.59	%
2016		7			0.60	%		7			0.54	%		8			0.35	%
2017		7			0.36	%		7			0.28	%		7			0.11	%
2018		7			0.15	%		7			0.07	%		3			—	%
2019		3			0.01	%		1			—	%		—			—	%

Total		100	%		0.60	%		100	%		0.57	%		100	%		0.54	%

⁽¹⁾	The business currently has structured insurance transactions with three lenders where it is in a secondary loss position. The loans in-force, including delinquent loans, and risk in-force associated with these arrangements are excluded from these metrics.

⁽²⁾	Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(Australian dollar amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Paid Claims⁽¹⁾
Flow	$	28		$	30		$	58		$	34		$	38		$	33		$	44		$	149

Total Paid Claims	$	28		$	30		$	58		$	34		$	38		$	33		$	44		$	149


Average Paid Claim (in thousands)	$	94.1		$	94.2					$	104.2		$	117.2		$	110.1		$	119.5

Average Reserve Per Delinquency (in thousands)	$	37.8		$	38.4					$	39.0		$	37.9		$	38.2		$	39.4

Loss Metrics
Beginning Reserves	$	288		$	279		$	279		$	278		$	279		$	274		$	280		$	280
Paid claims⁽¹⁾		(28	)		(30	)		(58	)		(34	)		(38	)		(33	)		(44	)		(149	)
Increase in reserves		38			39			77			35			37			38			38			148

Ending Reserves	$	298		$	288		$	298		$	279		$	278		$	279		$	274		$	279

Loan Amount^(2),(3)
Over $550K		19	%		18	%					18	%		18	%		17	%		17	%
$400K to $550K		21			21						21			21			21			20
$250K to $400K		33			34						34			34			34			35
$100K to $250K		22			22						22			22			23			23
$100K or Less		5			5						5			5			5			5

Total		100	%		100	%					100	%		100	%		100	%		100	%


Average Primary Loan Size (in thousands)⁽³⁾	$	235		$	233					$	232		$	231		$	229		$	228

All amounts presented in Australian dollars.

⁽¹⁾	Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims.

⁽²⁾	The percentages in this table are based on the amount of primary insurance in-force in each loan band as a percentage of total insurance in-force.

⁽³⁾	The business currently has structured insurance transactions with three lenders where it is in a secondary loss position. The loans in-force associated with these arrangements are excluded from these metrics.

U.S. Life Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Adjusted Operating Income (Loss)—U.S. Life Insurance Segment

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	713		$	709		$	1,422		$	716		$	717		$	712		$	722		$	2,867
Net investment income		724			701			1,425			690			696			707			688			2,781
Net investment gains (losses)		(36	)		84			48			38			(7	)		(10	)		8			29
Policy fees and other income		187			151			338			154			155			169			163			641

Total revenues		1,588			1,645			3,233			1,598			1,561			1,578			1,581			6,318

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		1,211			1,236			2,447			1,767			1,248			1,163			1,238			5,416
Interest credited		106			106			212			113			113			116			119			461
Acquisition and operating expenses, net of deferrals		142			148			290			153			144			146			141			584
Amortization of deferred acquisition costs and intangibles		67			66			133			55			53			78			71			257
Interest expense		4			5			9			4			4			4			4			16

Total benefits and expenses		1,530			1,561			3,091			2,092			1,562			1,507			1,573			6,734

INCOME (LOSS) BEFORE INCOME TAXES		58			84			142			(494	)		(1	)		71			8			(416	)
Provision (benefit) for income taxes		19			24			43			(101	)		6			21			6			(68	)

NET INCOME (LOSS)		39			60			99			(393	)		(7	)		50			2			(348	)

ADJUSTMENTS TO NET INCOME (LOSS):
Net investment (gains) losses, net⁽¹⁾		35			(86	)		(51	)		(41	)		6			9			(9	)		(35	)
Expenses related to restructuring		(1	)		4			3			—			—			—			—			—
Taxes on adjustments		(7	)		17			10			9			(2	)		(2	)		2			7

ADJUSTED OPERATING INCOME (LOSS)	$	66		$	(5	)	$	61		$	(425	)	$	(3)		$	57		$	(5)		$	(376	)


⁽¹⁾ Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below:
Net investment (gains) losses, gross	$	36		$	(84	)	$	(48	)	$	(38	)	$	7		$	10		$	(8	)	$	(29	)
Adjustment for DAC and other intangible amortization and certain benefit reserves		(1	)		(2	)		(3	)		(3	)		(1	)		(1	)		(1	)		(6	)

Net investment (gains) losses, net	$	35		$	(86	)	$	(51	)	$	(41	)	$	6		$	9		$	(9	)	$	(35	)

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Adjusted Operating Income (Loss)—U.S. Life Insurance Segment—Long-Term Care Insurance

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	640		$	628		$	1,268		$	650		$	648		$	632		$	631		$	2,561
Net investment income		428			406			834			398			397			399			382			1,576
Net investment gains (losses)		(15	)		80			65			46			4			3			6			59
Policy fees and other income		2			—			2			—			(1	)		1			1			1

Total revenues		1,055			1,114			2,169			1,094			1,048			1,035			1,020			4,197

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		896			927			1,823			1,311			944			874			928			4,057
Interest credited		—			—			—			—			—			—			—			—
Acquisition and operating expenses, net of deferrals		93			101			194			105			99			101			93			398
Amortization of deferred acquisition costs and intangibles		26			25			51			25			24			22			27			98
Interest expense		—			—			—			—			—			—			—			—

Total benefits and expenses		1,015			1,053			2,068			1,441			1,067			997			1,048			4,553

INCOME (LOSS) BEFORE INCOME TAXES		40			61			101			(347	)		(19	)		38			(28	)		(356	)
Provision (benefit) for income taxes		15			19			34			(69	)		1			14			(1	)		(55	)

NET INCOME (LOSS)		25			42			67			(278	)		(20	)		24			(27	)		(301	)

ADJUSTMENTS TO NET INCOME (LOSS):
Net investment (gains) losses		15			(80	)		(65	)		(46	)		(4	)		(3	)		(6	)		(59	)
Expenses related to restructuring		(1	)		2			1			—			—			—			—			—
Taxes on adjustments		(2	)		16			14			10			—			1			1			12

ADJUSTED OPERATING INCOME (LOSS)	$	37		$	(20	)	$	17		$	(314	)	$	(24	)	$	22		$	(32	)	$	(348	)


RATIOS:
Loss Ratio⁽¹⁾		74	%		81	%		78	%		138	%		83	%		75	%		84	%		95	%
Gross Benefits Ratio⁽²⁾		140	%		148	%		144	%		202	%		146	%		138	%		147	%		158	%

⁽¹⁾	The loss ratio was calculated by dividing benefits and other changes in policy reserves less tabular interest on reserves less loss adjustment expenses by net earned premiums.

⁽²⁾	The gross benefits ratio was calculated by dividing benefits and other changes in policy reserves by net earned premiums.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Adjusted Operating Income (Loss)—U.S. Life Insurance Segment—Life Insurance

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	73		$	81		$	154		$	66		$	69		$	80		$	91		$	306
Net investment income		130			133			263			127			128			125			124			504
Net investment gains (losses)		(3	)		10			7			(5	)		(4	)		(2	)		5			(6	)
Policy fees and other income		182			148			330			151			152			164			159			626

Total revenues		382			372			754			339			345			367			379			1,430

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		244			242			486			367			239			225			247			1,078
Interest credited		58			58			116			61			59			60			61			241
Acquisition and operating expenses, net of deferrals		37			34			71			35			33			33			35			136
Amortization of deferred acquisition costs and intangibles		28			27			55			14			16			42			29			101
Interest expense		4			5			9			4			4			4			4			16

Total benefits and expenses		371			366			737			481			351			364			376			1,572

INCOME (LOSS) BEFORE INCOME TAXES		11			6			17			(142	)		(6	)		3			3			(142	)
Provision (benefit) for income taxes		3			1			4			(30	)		(1	)		1			—			(30	)

NET INCOME (LOSS)		8			5			13			(112	)		(5	)		2			3			(112	)

ADJUSTMENTS TO NET INCOME (LOSS):
Net investment (gains) losses		3			(10	)		(7	)		5			4			2			(5	)		6
Expenses related to restructuring		—			1			1			—			—			—			—			—
Taxes on adjustments		(1	)		2			1			(1	)		(1	)		—			1			(1	)

ADJUSTED OPERATING INCOME (LOSS)	$	10		$	(2	)	$	8		$	(108	)	$	(2	)	$	4		$	(1	)	$	(107	)

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Adjusted Operating Income (Loss)—U.S. Life Insurance Segment—Fixed Annuities

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Net investment income		166			162			328			165			171			183			182			701
Net investment gains (losses)		(18	)		(6	)		(24	)		(3	)		(7	)		(11	)		(3	)		(24	)
Policy fees and other income		3			3			6			3			4			4			3			14

Total revenues		151			159			310			165			168			176			182			691

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		71			67			138			89			65			64			63			281
Interest credited		48			48			96			52			54			56			58			220
Acquisition and operating expenses, net of deferrals		12			13			25			13			12			12			13			50
Amortization of deferred acquisition costs and intangibles		13			14			27			16			13			14			15			58
Interest expense		—			—			—			—			—			—			—			—

Total benefits and expenses		144			142			286			170			144			146			149			609

INCOME (LOSS) BEFORE INCOME TAXES		7			17			24			(5	)		24			30			33			82
Provision (benefit) for income taxes		1			4			5			(2	)		6			6			7			17

NET INCOME (LOSS)		6			13			19			(3	)		18			24			26			65

ADJUSTMENTS TO NET INCOME (LOSS):
Net investment (gains) losses, net⁽¹⁾		17			4			21			—			6			10			2			18
Expenses related to restructuring		—			1			1			—			—			—			—			—
Taxes on adjustments		(4	)		(1	)		(5	)		—			(1	)		(3	)		—			(4	)

ADJUSTED OPERATING INCOME (LOSS)	$	19		$	17		$	36		$	(3	)	$	23		$	31		$	28		$	79


⁽¹⁾ Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below:
Net investment (gains) losses, gross	$	18		$	6		$	24		$	3		$	7		$	11		$	3		$	24
Adjustment for DAC and other intangible amortization and certain benefit reserves		(1	)		(2	)		(3	)		(3	)		(1	)		(1	)		(1	)		(6	)

Net investment (gains) losses, net	$	17		$	4		$	21		$	—		$	6		$	10		$	2		$	18

Runoff Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Adjusted Operating Income (Loss)—Runoff Segment

(amounts in millions)


	2019								2018
	2Q			1Q		Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Net investment income	$	47		$	47	$	94		$	45		$	44		$	43		$	42		$	174
Net investment gains (losses)		(4	)		—		(4	)		(15	)		(3	)		(1	)		(14	)		(33	)
Policy fees and other income		35			35		70			37			38			38			40			153

Total revenues		78			82		160			67			79			80			68			294

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		13			1		14			17			7			7			8			39
Interest credited		40			41		81			39			38			36			37			150
Acquisition and operating expenses, net of deferrals		13			13		26			14			14			14			15			57
Amortization of deferred acquisition costs and intangibles		4			2		6			13			5			8			7			33

Total benefits and expenses		70			57		127			83			64			65			67			279

INCOME (LOSS) BEFORE INCOME TAXES		8			25		33			(16	)		15			15			1			15
Provision (benefit) for income taxes		1			5		6			(3	)		2			3			—			2

NET INCOME (LOSS)		7			20		27			(13	)		13			12			1			13

ADJUSTMENTS TO NET INCOME (LOSS):
Net investment (gains) losses, net⁽¹⁾		2			—		2			13			1			1			12			27
Taxes on adjustments		—			—		—			(2	)		—			—			(3	)		(5	)

ADJUSTED OPERATING INCOME (LOSS)	$	9		$	20	$	29		$	(2	)	$	14		$	13		$	10		$	35


⁽¹⁾ Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below:
Net investment (gains) losses, gross	$	4		$	—	$	4		$	15		$	3		$	1		$	14		$	33
Adjustment for DAC and other intangible amortization and certain benefit reserves		(2	)		—		(2	)		(2	)		(2	)		—			(2	)		(6	)

Net investment (gains) losses, net	$	2		$	—	$	2		$	13		$	1		$	1		$	12		$	27

Corporate and Other

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Adjusted Operating Loss—Corporate and Other⁽¹⁾

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	2		$	2		$	4		$	2		$	1		$	3		$	2		$	8
Net investment income		3			3			6			3			1			3			2			9
Net investment gains (losses)		(7	)		(21	)		(28	)		18			(7	)		—			(1	)		10
Policy fees and other income		—			1			1			(1	)		(1	)		1			(2	)		(3	)

Total revenues	(2)			(15)			(17)			22			(6)			7			1			24

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		1			1			2			2			1			1			1			5
Acquisition and operating expenses, net of deferrals		9			7			16			18			12			11			11			52
Amortization of deferred acquisition costs and intangibles		—			—			—			—			—			—			1			1
Interest expense		62			61			123			63			61			67			65			256

Total benefits and expenses	72			69			141			83			74			79			78			314

LOSS BEFORE INCOME TAXES		(74	)		(84	)		(158	)		(61	)		(80	)		(72	)		(77	)		(290	)
Provision (benefit) for income taxes		5			5			10			(17	)		(28	)		3			(17	)		(59	)

NET LOSS		(79	)		(89	)		(168	)		(44	)		(52	)		(75	)		(60	)		(231	)

ADJUSTMENTS TO NET LOSS:
Net investment (gains) losses		7			21			28			(18	)		7			—			1			(10	)
Expenses related to restructuring		1			—			1			—			2			—			—			2
Fees associated with bond consent solicitation		—			—			—			6			—			—			—			6
Taxes on adjustments		(1	)		(5	)		(6	)		2			(2	)		—			—			—

ADJUSTED OPERATING LOSS	$	(72	)	$	(73	)	$	(145	)	$	(54	)	$	(45	)	$	(75	)	$	(59	)	$	(233	)

⁽¹⁾	Includes inter-segment eliminations and the results of other businesses that are managed outside the operating segments, including certain smaller international mortgage insurance businesses.

Additional Financial Data

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Investments Summary

(amounts in millions)


		June 30, 2019					March 31, 2019					December 31, 2018					September 30, 2018					June 30, 2018
		Carrying Amount		% of Total			Carrying Amount		% of Total			Carrying Amount		% of Total			Carrying Amount		% of Total			Carrying Amount		% of Total
Composition of Investment Portfolio
Fixed maturity securities:
Investment grade:
Public fixed maturity securities		$	35,114		45	%	$	33,634		45	%	$	32,630		45	%	$	32,496		45	%	$	32,813		45	%
Private fixed maturity securities			14,501		19			13,838		19			13,000		18			12,628		17			12,362		17
Residential mortgage-backed securities⁽¹⁾			2,697		4			2,908		4			2,998		4			3,178		5			3,522		5
Commercial mortgage-backed securities			2,970		4			2,943		4			3,007		4			3,146		4			3,340		5
Other asset-backed securities			3,698		5			3,405		5			3,414		5			3,044		4			2,950		4
State and political subdivisions			2,636		3			2,546		3			2,552		4			2,795		4			2,855		4
Non-investment grade fixed maturity securities			2,158		3			2,086		3			2,060		3			2,117		3			2,190		3
Equity securities:
Common stocks and mutual funds			111		—			103		—			141		—			171		—			164		—
Preferred stocks			533		1			532		1			514		1			612		1			594		1
Commercial mortgage loans			6,963		9			6,929		9			6,687		9			6,568		9			6,480		9
Restricted commercial mortgage loans related to a securitization entity			56		—			59		—			62		—			87		—			90		—
Policy loans			2,076		3			1,994		3			1,861		3			1,859		3			1,872		3
Cash, cash equivalents, restricted cash and short-term investments			2,211		3			2,360		3			2,407		3			2,864		4			2,951		4
Securities lending			113		—			106		—			103		—			166		—			211		—
Other invested assets:	Limited partnerships		512		1			462		1			409		1			372		1			335		—
	Derivatives:⁽²⁾
	Long-term care (LTC) forward starting swap—cash flow		144		—			59		—			42		—			36		—			49		—
	Other cash flow		5		—			3		—			6		—			2		—			2		—
	Equity index options—non-qualified		65		—			60		—			39		—			80		—			70		—
	Other non-qualified		66		—			65		—			91		—			127		—			109		—
	Other		357		—			314		—			268		—			212		—			166		—

Total invested assets and cash		$	76,986		100	%	$	74,406		100	%	$	72,291		100	%	$	72,560		100	%	$	73,125		100	%

Public Fixed Maturity Securities—Credit Quality:
NRSRO⁽³⁾ Designation
AAA		$	10,856		24	%	$	10,778		25	%	$	10,799		26	%	$	11,642		28	%	$	12,269		29	%
AA			4,202		10			4,084		10			4,117		10			4,358		10			4,428		10
A			12,555		29			12,301		29			12,005		29			11,984		28			12,174		28
BBB			15,171		34			14,240		33			13,669		32			12,994		31			12,929		30
BB			1,128		3			1,081		3			1,149		3			1,156		3			1,221		3
B			76		—			76		—			93		—			130		—			123		—
CCC and lower			25		—			25		—			25		—			27		—			31		—

Total public fixed maturity securities		$	44,013		100	%	$	42,585		100	%	$	41,857		100	%	$	42,291		100	%	$	43,175		100	%

Private Fixed Maturity Securities—Credit Quality:
NRSRO⁽³⁾ Designation
AAA		$	2,726		14	%	$	2,545		14	%	$	2,540		14	%	$	2,109		12	%	$	2,045		12	%
AA			2,507		13			2,364		13			2,198		13			2,224		13			2,156		13
A			5,496		28			5,228		28			4,866		27			4,695		27			4,750		28
BBB			8,103		41			7,734		41			7,407		42			7,281		43			7,091		42
BB			869		4			843		4			737		4			724		4			733		4
B			58		—			59		—			54		—			78		1			80		1
CCC and lower			2		—			2		—			2		—			2		—			2		—

Total private fixed maturity securities		$	19,761		100	%	$	18,775		100	%	$	17,804		100	%	$	17,113		100	%	$	16,857		100	%

⁽¹⁾	The company does not have any material exposure to residential mortgage-backed securities collateralized debt obligations (CDOs).

⁽²⁾	Certain derivative balances have been reclassified as of June 30, 2018 to conform to the current period presentation.

⁽³⁾	Nationally Recognized Statistical Rating Organizations.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Fixed Maturity Securities Summary

(amounts in millions)


	June 30, 2019					March 31, 2019					December 31, 2018					September 30, 2018					June 30, 2018
	Fair Value		% of Total			Fair Value		% of Total			Fair Value		% of Total			Fair Value		% of Total			Fair Value		% of Total
Fixed Maturity Securities—Security Sector:

U.S. government, agencies and government-sponsored enterprises	$	4,987		8	%	$	4,731		8	%	$	4,631		8	%	$	5,181		9	%	$	5,353		9	%
State and political subdivisions		2,636		4			2,546		4			2,552		4			2,795		5			2,855		5
Foreign government		2,649		4			2,518		4			2,393		4			2,289		4			2,380		4
U.S. corporate		31,401		49			29,941		49			28,762		48			27,538		46			27,569		46
Foreign corporate		12,647		20			12,286		20			11,837		20			12,173		20			12,002		20
Residential mortgage-backed securities		2,738		4			2,950		5			3,044		5			3,222		6			3,567		6
Commercial mortgage-backed securities		2,989		5			2,962		5			3,016		5			3,156		5			3,349		5
Other asset-backed securities		3,727		6			3,426		5			3,426		6			3,050		5			2,957		5

Total fixed maturity securities	$	63,774		100	%	$	61,360		100	%	$	59,661		100	%	$	59,404		100	%	$	60,032		100	%

Corporate Bond Holdings—Industry Sector:

Investment Grade:
Finance and insurance	$	10,009		23	%	$	9,605		22	%	$	9,062		22	%	$	8,712		22	%	$	8,616		22	%
Utilities		5,944		13			5,718		14			5,665		14			5,674		14			5,785		15
Energy		3,898		9			3,757		9			3,449		8			3,358		8			3,310		8
Consumer—non-cyclical		6,107		14			5,798		14			5,595		14			5,232		13			5,042		13
Consumer—cyclical		2,055		5			1,950		5			1,900		5			1,887		5			1,875		5
Capital goods		3,158		7			3,005		7			2,876		7			2,788		7			2,815		7
Industrial		2,142		5			2,029		5			1,957		5			1,899		5			2,028		5
Technology and communications		3,964		9			3,720		9			3,582		9			3,424		9			3,346		8
Transportation		2,244		5			2,164		5			2,017		5			1,945		5			1,973		5
Other		2,571		6			2,602		6			2,625		6			2,879		7			2,836		7

Subtotal		42,092		96			40,348		96			38,728		95			37,798		95			37,626		95


Non-Investment Grade:
Finance and insurance		216		1			200		—			183		—			177		—			196		—
Utilities		100		—			94		—			51		—			57		—			56		—
Energy		331		1			308		1			339		1			357		1			359		1
Consumer—non-cyclical		155		—			168		1			192		1			193		1			201		1
Consumer—cyclical		243		1			237		1			217		1			220		1			220		1
Capital goods		157		—			146		—			130		—			154		—			157		—
Industrial		211		—			193		—			226		1			219		1			232		1
Technology and communications		465		1			452		1			438		1			448		1			442		1
Transportation		8		—			13		—			23		—			13		—			6		—
Other		70		—			68		—			72		—			75		—			76		—

Subtotal		1,956		4			1,879		4			1,871		5			1,913		5			1,945		5

Total	$	44,048		100	%	$	42,227		100	%	$	40,599		100	%	$	39,711		100	%	$	39,571		100	%

Fixed Maturity Securities—Contractual Maturity Dates:

Due in one year or less	$	1,973		3	%	$	2,021		3	%	$	1,874		3	%	$	1,719		3	%	$	1,701		3	%
Due after one year through five years		11,602		18			11,105		18			10,952		18			10,987		18			11,149		19
Due after five years through ten years		13,197		21			12,770		21			12,463		21			12,531		21			12,601		21
Due after ten years		27,548		43			26,126		43			24,886		42			24,739		42			24,708		41

Subtotal		54,320		85			52,022		85			50,175		84			49,976		84			50,159		84
Mortgage and asset-backed securities		9,454		15			9,338		15			9,486		16			9,428		16			9,873		16

Total fixed maturity securities	$	63,774		100	%	$	61,360		100	%	$	59,661		100	%	$	59,404		100	%	$	60,032		100	%

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

General Account U.S. GAAP Net Investment Income Yields

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
U.S. GAAP Net Investment Income
Fixed maturity securities—taxable	$	665		$	643		$	1,308		$	648		$	643		$	651		$	635		$	2,577
Fixed maturity securities—non-taxable		2			2			4			2			3			3			3			11
Commercial mortgage loans		84			81			165			80			81			77			82			320
Restricted commercial mortgage loans related to a securitization entity		1			1			2			2			1			2			2			7
Equity securities		10			9			19			9			11			10			10			40
Other invested assets		47			44			91			49			41			42			37			169
Limited partnerships		12			15			27			(4	)		3			11			2			12
Policy loans		45			46			91			44			41			41			43			169
Cash, cash equivalents, restricted cash and short-term investments		11			12			23			12			13			14			12			51

Gross investment income before expenses and fees		877			853			1,730			842			837			851			826			3,356
Expenses and fees		(25	)		(24	)		(49	)		(27	)		(22	)		(23	)		(22	)		(94	)

Net investment income	$	852		$	829		$	1,681		$	815		$	815		$	828		$	804		$	3,262

Annualized Yields
Fixed maturity securities—taxable		4.6	%		4.5	%		4.5	%		4.5	%		4.5	%		4.5	%		4.4	%		4.5	%
Fixed maturity securities—non-taxable		6.1	%		6.1	%		6.1	%		3.7	%		3.9	%		3.8	%		3.7	%		4.0	%
Commercial mortgage loans		4.8	%		4.8	%		4.8	%		4.8	%		5.0	%		4.8	%		5.2	%		4.9	%
Restricted commercial mortgage loans related to a securitization entity		7.0	%		6.7	%		6.8	%		10.8	%		4.5	%		8.4	%		7.8	%		7.9	%
Equity securities		6.3	%		5.6	%		5.9	%		5.0	%		5.7	%		5.1	%		5.1	%		5.3	%
Other invested assets⁽¹⁾		56.1	%		65.7	%		61.1	%		99.0	%		107.9	%		150.0	%		129.8	%		111.9	%
Limited partnerships⁽²⁾		9.9	%		13.8	%		11.7	%		(4.1	)%		3.4	%		13.8	%		2.9	%		3.6	%
Policy loans		8.8	%		9.5	%		9.2	%		9.5	%		8.8	%		9.0	%		9.6	%		9.2	%
Cash, cash equivalents, restricted cash and short-term investments		1.9	%		2.0	%		2.0	%		1.8	%		1.8	%		1.7	%		1.3	%		1.6	%

Gross investment income before expenses and fees		5.0	%		4.8	%		4.9	%		4.8	%		4.8	%		4.8	%		4.8	%		4.8	%
Expenses and fees		(0.2	)%		(0.1	)%		(0.1	)%		(0.2	)%		(0.2	)%		(0.1	)%		(0.2	)%		(0.2	)%

Net investment income		4.8	%		4.7	%		4.8	%		4.6	%		4.6	%		4.7	%		4.6	%		4.6	%

Yields are based on net investment income as reported under U.S. GAAP and are consistent with how the company measures its investment performance for management purposes. Yields are annualized, for interim periods, and are calculated as net investment income as a percentage of average quarterly asset carrying values except for fixed maturity securities, derivatives and derivative counterparty collateral, which exclude unrealized fair value adjustments and securities lending activity, which is included in other invested assets and is calculated net of the corresponding securities lending liability. See page 49 herein for average invested assets and cash used in the yield calculation.

⁽¹⁾	Investment income for other invested assets includes amortization of terminated cash flow hedges, which have no corresponding book value within the yield calculation.

⁽²⁾	Limited partnership investments are primarily equity-based and do not have fixed returns by period.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Net Investment Gains (Losses), Net—Detail

(amounts in millions)


	2019									2018
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net realized gains (losses) on available-for-sale securities:
Fixed maturity securities:
U.S. corporate	$	(15	)	$	30		$	15		$	10		$	(6	)	$	(7	)	$	(3	)	$	(6	)
U.S. government, agencies and government-sponsored enterprises		2			33			35			54			1			—			—			55
Foreign corporate		(1	)		(1	)		(2	)		(6	)		—			(2	)		(3	)		(11	)
Foreign government		11			1			12			(4	)		(2	)		—			—			(6	)
State and political subdivisions		—			—			—			(1	)		—			—			—			(1	)
Mortgage-backed securities		1			(2	)		(1	)		(5	)		(2	)		2			(2	)		(7	)
Asset-backed securities		—			(1	)		(1	)		—			—			(1	)		—			(1	)
Foreign exchange		1			(1	)		—			2			1			—			(1	)		2

Total net realized gains (losses) on available-for-sale securities		(1	)		59			58			50			(8	)		(8	)		(9	)		25

Net realized gains (losses) on equity securities sold		—			3			3			1			—			8			2			11
Net unrealized gains (losses) on equity securities still held		(12	)		8			(4	)		(83	)		—			3			(18	)		(98	)
Limited partnerships		(11	)		15			4			3			3			(2	)		7			11
Commercial mortgage loans		1			(1	)		—			—			—			—			—			—
Derivative instruments		(22	)		(10	)		(32	)		(85	)		18			(15	)		(13	)		(95	)

Net investment gains (losses), gross		(45	)		74			29			(114	)		13			(14	)		(31	)		(146	)
Adjustment for DAC and other intangible amortization and certain benefit reserves		3			2			5			5			3			1			3			12
Adjustment for net investment (gains) losses attributable to noncontrolling interests		(1	)		(5	)		(6	)		67			(13	)		1			11			66

Net investment gains (losses), net	$	(43	)	$	71		$	28		$	(42	)	$	3		$	(12	)	$	(17	)	$	(68	)

Reconciliations of Non-GAAP Measures

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Reconciliation of Operating ROE

(amounts in millions)


Twelve Month Rolling Average ROE	Twelve months ended
	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
U.S. GAAP Basis ROE
Net income available to Genworth Financial, Inc.’s common stockholders for the twelve months ended⁽¹⁾	$	159		$	181		$	119		$	801		$	762
Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income⁽²⁾	$	10,609		$	10,539		$	10,500		$	10,426		$	10,264
U.S. GAAP Basis ROE^(1)/(2)		1.5	%		1.7	%		1.1	%		7.7	%		7.4	%

Operating ROE
Adjusted operating income for the twelve months ended⁽¹⁾	$	179		$	175		$	179		$	796		$	727
Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income⁽²⁾	$	10,609		$	10,539		$	10,500		$	10,426		$	10,264
Operating ROE^(1)/(2)		1.7	%		1.7	%		1.7	%		7.6	%		7.1	%

Quarterly Average ROE	Three months ended
	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
U.S. GAAP Basis ROE
Net income (loss) available to Genworth Financial, Inc.’s common stockholders for the period ended⁽³⁾	$	168		$	174		$	(329	)	$	146		$	190
Quarterly average Genworth Financial, Inc.’s stockholders’ equity for the period, excluding accumulated other comprehensive income⁽⁴⁾	$	10,663		$	10,494		$	10,569		$	10,657		$	10,487
Annualized U.S. GAAP Quarterly Basis ROE^(3)/(4)		6.3	%		6.6	%		(12.5	)%		5.5	%		7.2	%

Operating ROE
Adjusted operating income (loss) for the period ended⁽³⁾	$	204		$	121		$	(291	)	$	145		$	200
Quarterly average Genworth Financial, Inc.’s stockholders’ equity for the period, excluding accumulated other comprehensive income⁽⁴⁾	$	10,663		$	10,494		$	10,569		$	10,657		$	10,487
Annualized Operating Quarterly Basis ROE^(3)/(4)		7.7	%		4.6	%		(11.0	)%		5.4	%		7.6	%

Non-GAAP Definition for Operating ROE

The company references the non-GAAP financial measure entitled “operating return on equity” or “operating ROE.” The company defines operating ROE as adjusted operating income (loss) divided by average ending Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss) in average ending Genworth Financial, Inc.’s stockholders’ equity. Management believes that analysis of operating ROE enhances understanding of the efficiency with which the company deploys its capital. However, operating ROE is not a substitute for net income (loss) available to Genworth Financial, Inc.’s common stockholders divided by average ending Genworth Financial, Inc.’s stockholders’ equity determined in accordance with U.S. GAAP.

⁽¹⁾	The twelve months ended information is derived by adding the four quarters of net income (loss) available to Genworth Financial, Inc.’s common stockholders and adjusted operating income (loss) from page 9 herein.

⁽²⁾	Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income, is derived by averaging ending Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income, for the most recent five quarters.

⁽³⁾	Net income (loss) available to Genworth Financial, Inc.’s common stockholders and adjusted operating income (loss) from page 9 herein.

⁽⁴⁾	Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income, is derived by averaging ending Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Reconciliation of Core Yield


		2019									2018
	(Assets—amounts in billions)		2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
	Reported—Total Invested Assets and Cash	$	77.0		$	74.4		$	77.0		$	72.3		$	72.6		$	73.1		$	74.6		$	72.3
	Subtract:
	Securities lending		0.1			0.1			0.1			0.1			0.2			0.2			0.2			0.1
	Unrealized gains (losses)		5.9			3.8			5.9			1.9			2.2			2.7			3.7			1.9

	Adjusted end of period invested assets and cash	$	71.0		$	70.5		$	71.0		$	70.3		$	70.2		$	70.2		$	70.7		$	70.3

(A)	Average Invested Assets and Cash Used in Reported Yield Calculation	$	70.8		$	70.4		$	70.6		$	70.2		$	70.2		$	70.4		$	70.7		$	70.4
	Subtract:
	Restricted commercial mortgage loans related to a securitization entity⁽¹⁾		—			0.1			—			—			—			—			0.1			—

(B)	Average Invested Assets and Cash Used in Core Yield Calculation	$	70.8		$	70.3		$	70.6		$	70.2		$	70.2		$	70.4		$	70.6		$	70.4

	(Income—amounts in millions)

(C)	Reported—Net Investment Income	$	852		$	829		$	1,681		$	815		$	815		$	828		$	804		$	3,262
	Subtract:
	Bond calls and commercial mortgage loan prepayments		7			6			13			8			8			9			11			36
	Other non-core items⁽²⁾		7			2			9			2			1			2			(2	)		3
	Restricted commercial mortgage loans related to a securitization entity⁽¹⁾		—			—			—			1			1			—			1			3

(D)	Core Net Investment Income	$	838		$	821		$	1,659		$	804		$	805		$	817		$	794		$	3,220


(C) / (A)	Reported Yield		4.82	%		4.71	%		4.76	%		4.64	%		4.64	%		4.70	%		4.55	%		4.63	%
(D) / (B)	Core Yield		4.74	%		4.67	%		4.70	%		4.58	%		4.59	%		4.64	%		4.50	%		4.58	%

Note: Yields have been annualized.

Non-GAAP Definition for Core Yield

The company references the non-GAAP financial measure entitled “core yield” as a measure of investment yield. The company defines core yield as the investment yield adjusted for items 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 is not a substitute for investment yield determined in accordance with U.S. GAAP.

⁽¹⁾	Represents the incremental assets and investment income related to restricted commercial mortgage loans.

⁽²⁾	Includes cost basis adjustments on structured securities and various other immaterial items.

Corporate Information

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2019

Financial Strength Ratings As Of July 29, 2019


Company	Standard & Poor’s Financial Services LLC (S&P)	Moody’s Investors Service, Inc. (Moody’s)	A.M. Best Company, Inc. (A.M. Best)
Genworth Mortgage Insurance Corporation	BB+ (Marginal)	Baa3 (Adequate)	N/A
Genworth Financial Mortgage Insurance Company Canada⁽¹⁾	A+ (Strong)	N/A	N/A
Genworth Financial Mortgage Insurance Pty Limited (Australia)⁽²⁾	A (Strong)	N/A	N/A
Genworth Life Insurance Company	B- (Weak)	B3 (Poor)	B- (Fair)
Genworth Life and Annuity Insurance Company	B- (Weak)	B1 (Poor)	B+ (Good)
Genworth Life Insurance Company of New York	B- (Weak)	B3 (Poor)	B- (Fair)

The S&P, Moody’s, A.M. Best, Dominion Bond Rating Service (DBRS) and Fitch Rating Service (Fitch) ratings included are not designed to be, and do not serve as, measures of protection or valuation offered to investors. These financial strength ratings should not be relied on with respect to making an investment in the company’s securities.

S&P states that an insurer rated “A” (Strong) has strong financial security characteristics that outweigh any vulnerabilities and is highly likely to have the ability to meet financial commitments. Insurers rated “A” (Strong), “BB” (Marginal) or “B” (Weak) have strong, marginal or weak financial security characteristics, respectively. The “A,” “BB” and “B” ranges are the third-, fifth- and sixth-highest of nine financial strength rating ranges assigned by S&P, which range from “AAA” to “R.” A plus (+) or minus (-) shows relative standing within a rating category. These suffixes are not added to ratings in the “AAA” category or to ratings below the “CCC” category. Accordingly, the “A+,” “A,” “BB+” and “B-” ratings are the fifth-, sixth-, eleventh- and sixteenth-highest of S&P’s 21 ratings categories.

Moody’s states that insurance companies rated “Baa” (Adequate) offer adequate financial security and those rated “B” (Poor) offer questionable financial security. The “Baa” (Adequate) and “B” (Poor) ranges are the fourth- and sixth-highest, respectively, of nine financial strength rating ranges assigned by Moody’s, which range from “Aaa” to “C.” Numeric modifiers are used to refer to the ranking within the groups, with 1 being the highest and 3 being the lowest. These modifiers are not added to ratings in the “Aaa” category or to ratings below the “Caa” category. Accordingly, the “Baa3,” “B1” and “B3” ratings are the tenth-, fourteenth- and sixteenth-highest, respectively, of Moody’s 21 ratings categories.

A.M. Best states that its “B+” (Good) rating is assigned to companies that have, in its opinion, a good ability to meet their ongoing insurance obligations while “B-” (Fair) is assigned to those companies that have, in its opinion, a fair ability to meet their ongoing insurance obligations. The “B+” (Good) and “B-” (Fair) ratings are the sixth- and eighth-highest of 15 ratings assigned by A.M. Best, which range from “A++” to “F.”

DBRS states that long-term obligations rated “AA” are of superior credit quality. Given the restrictive definition DBRS has for the “AAA” category, entities rated “AA” are also considered to be strong credits, typically exemplifying above-average strength in key areas of consideration and unlikely to be significantly affected by reasonably foreseeable events.

The Australian mortgage insurance subsidiary also solicits a rating from Fitch. Fitch states that “A” (Strong) rated insurance companies are viewed as possessing strong capacity to meet policyholder and contract obligations. The “A” rating category is the third-highest of nine financial strength rating categories, which range from “AAA” to “C.” The symbol (+) or (-) may be appended to a rating to indicate the relative position of a credit within a rating category. These suffixes are not added to ratings in the “AAA” category or to ratings below the “B” category. Accordingly, the “A+” rating is the fifth-highest of Fitch’s 21 ratings categories.

The company also solicits a rating from HR Ratings on a local scale for Genworth Seguros de Credito a la Vivienda S.A. de C.V., its Mexican mortgage insurance subsidiary, with a short-term rating of “HR1” and long-term rating of “HR AA.” For short-term ratings, HR Ratings states that “HR1” rated companies are viewed as exhibiting high capacity for timely payment of debt obligations in the short-term and maintain low credit risk. The “HR1” short-term rating category is the highest of six short-term rating categories, which range from “HR1” to “HR D.” For long-term ratings, HR Ratings states that “HR AA” rated companies are viewed as having high credit quality and offer high safety for timely payment of debt obligations and maintain low credit risk under adverse economic scenarios. The “HR AA” long-term rating is the second-highest of HR Rating’s eight long-term rating categories, which range from “HR AAA” to “HR D.”

S&P, Moody’s, A.M. Best, DBRS, Fitch and HR Ratings review their ratings periodically and the company cannot assure you that it will maintain the current ratings in the future. These and other agencies may also rate the company or its insurance subsidiaries on a solicited or an unsolicited basis.

⁽¹⁾	Genworth Financial Mortgage Insurance Company Canada is also rated “AA” by DBRS.

⁽²⁾	Genworth Financial Mortgage Insurance Pty Limited (Australia) is also rated “A+” by Fitch.