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GENWORTH FINANCIAL INC (GNW)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered a small consolidated net loss of $1M (diluted EPS ~$0.00) on $1.78B of revenue, with adjusted operating income (AOI) of $15M; strong Enact AOI ($137M) was offset by an LTC adjusted operating loss ($104M) largely from liability remeasurement losses tied to lower terminations and higher claims .
  • Full-year 2024 AOI was $273M and net income $299M ($0.68 diluted EPS), with U.S. life companies’ RBC at 306% and holding company cash of $294M at year end .
  • Management highlighted major strategic progress: CareScout Quality Network scaled to all 50 states (86%+ of 65+ U.S. population), Enact capital returns remained robust, and $51M of Q4 share repurchases ($186M in 2024) were executed; company plans $100–$120M repurchases in 2025 and $75M capital for a new CareScout insurance entity later in 2025 .
  • Street estimates (S&P Global) for Q4 EPS and revenue were unavailable at time of analysis due to data access limits; comparison to consensus cannot be provided. We will update when accessible (S&P Global) [GetEstimates error noted].

What Went Well and What Went Wrong

What Went Well

  • Enact strength continued: Q4 AOI $137M, with a 10% loss ratio driven by a $56M pre-tax reserve release and strong NII; PMIERs sufficiency ratio stood at 167% (~$2.05B above requirements) . “Enact delivered $137 million in adjusted operating income… Primary insurance in force grew 2% YoY to a record $269 billion” .
  • Capital returns/liquidity: Enact returned $84M to Genworth in Q4; holding company ended Q4 with $294M cash; the company repurchased $51M of shares in Q4 and retired $31M debt at a discount .
  • CareScout scaling and growth path: Quality Network live in 50 states covering 86%+ of the age 65+ population; management expects to launch CareScout’s first LTC insurance product later in 2025 and has agreed on material terms with a U.S.-based reinsurer. “We entered 2025 on solid financial footing” .

What Went Wrong

  • LTC headwinds: Q4 LTC adjusted operating loss of $(104)M; liability remeasurement loss of $(117)M driven by lower terminations and higher claims; annual assumption updates were net unfavorable to AOI across LTC and Life & Annuities by $52M .
  • Investment drag: Net investment losses reduced Q4 net income by $32M vs. gains of $52M in Q3; losses largely from derivatives and higher credit loss allowance .
  • Persisting A/E volatility: CFO noted average quarterly A/E losses of ~$(65)M since LDTI adoption and indicated similar losses could continue in 2025, a key source of earnings volatility in LTC .

Financial Results

Consolidated – GAAP and AOI (oldest → newest)

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Total Revenues ($B)$1.91 $1.77 $1.88 $1.78
Net Income Available to Common ($M)$(212) $76 $85 $(1)
Diluted EPS ($)$(0.47) $0.17 $0.19 $0.00 (reported “—”)
Adjusted Operating Income ($M)$(230) $125 $48 $15

Segment AOI (loss) – Trend (oldest → newest)

Segment AOI ($M)Q4 2023Q2 2024Q3 2024Q4 2024
Enact$148 $165 $148 $137
Long-Term Care Insurance$(46) $(29) $(46) $(104)
Life and Annuities – Total$(27) $(1) $(27) $5
Corporate & Other$(27) $(10) $(27) $(23)
Consolidated AOI$(230) $125 $48 $15

Key KPIs and Capital (oldest → newest)

KPI / CapitalQ2 2024Q3 2024Q4 2024
Enact Primary NIW ($M)$13,619 $13,591 $13,266
Enact Loss Ratio (%)(7)% 5% 10%
Enact PMIERs Sufficiency (%)169% 173% 167%
GLIC Consolidated RBC (%)319% 317% 306%
Holding Co. Cash ($M)$281 $369 $294

Segment Detail (select items, Q4 2024)

  • Enact: AOI $137M; reserve release $56M; NII $62M; NIW $13.3B; loss ratio 10%; PMIERs 167% .
  • LTC: Premiums $587M; NII $499M; liability remeasurement loss $(117)M (unfavorable A/E and assumption updates, partly offset by favorable IFA outlook updates) .
  • Life & Annuities: AOI $5M; Life Insurance benefited from net favorable $30M pre-tax model/assumption updates; annuities had $(18)M unfavorable assumption update (lapses) and lower spread income as blocks run off .

Estimates vs. Actuals (Q4 2024)

MetricConsensus (S&P Global)Actual
Diluted EPSN/A (unavailable)$0.00
Revenue ($B)N/A (unavailable)$1.78
Note: S&P Global consensus was unavailable at time of analysis due to data access limits; we will update when accessible (S&P Global).

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Share RepurchasesFY 2025N/APlan to allocate $100–$120M (subject to performance/market/price) New
CareScout Services InvestmentFY 2025N/A~$45–$50M investment to scale offerings New
CareScout Insurance Capitalization2025N/APlan to invest $75M later in 2025; reinsurance terms agreed with U.S.-based reinsurer (finalizing) New
Enact Capital ReturnsFY 2025N/AEnact expects to return capital at levels similar to 2024 New
Product Launch2025N/ACareScout’s first new LTC insurance product targeted later in 2025 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Enact performance/capitalAOI $165M; PMIERs 169%; capital returns $63M; RBC context strong AOI $148M; PMIERs 173%; capital returns $81M AOI $137M; PMIERs 167%; capital returns $84M; similar 2025 returns expected Still strong, modest normalization in reserves/PMIERs
LTC MYRAP progress$29.2B NPV achieved; $138M gross approvals ~$30B NPV; $124M approvals; settlements near completion $31.2B NPV; $40M approvals in Q4; 87% of target achieved Continued execution; benefit reductions pace to slow
LTC A/E and LDTI volatilityLoss from A/E; liability remeasurement losses A/E losses persisted; liability remeasurement loss A/E ~$(97)M; CFO: average $(65)M quarterly losses since LDTI; could persist in 2025 Ongoing volatility remains a key headwind
CareScout (network, monetization)40+ states; >⅔ coverage 49 states; 75%+ coverage 50 states; 86%+ coverage; monetization via sharing negotiated discounts; launch of insurance product targeted 2025 Scaling with clearer monetization path
Capital allocationBuybacks $36M; debt repurchase Buybacks $36M; debt repurchase Buybacks $51M Q4; 2025 plan $100–$120M; debt retired $31M principal Increased commitment to buybacks in 2025
Regulatory/statutory capitalGLIC RBC 319% 317% 306% with positive cash flow testing margin ($0.5–$1.0B range) Slightly lower but solid; margins positive

Management Commentary

  • CEO framing: “I’m pleased with our financial and operational achievements in 2024… We entered 2025 on solid financial footing” .
  • Enact/returns: “Enact delivered $137 million in adjusted operating income… Primary insurance in force grew 2% year-over-year… Genworth received $84 million in capital returns… Enact expects to return similar levels of capital to its shareholders in 2025” .
  • LTC dynamics: “Since the implementation of LDTI in 2023, we have seen an average quarterly loss from the A to E of about $65 million and expect we could continue to see losses at this level in 2025” .
  • CareScout growth: “We plan to launch CareScout’s first new insurance product later this year… We plan to invest $75 million of capital in the new CareScout insurance company later in 2025… agreement on material terms of a reinsurance arrangement with a U.S.-based reinsurer” .
  • Capital allocation 2025: “For 2025, we expect to allocate between $100 million to $120 million to share repurchases” .

Q&A Highlights

  • CareScout monetization: Management explained revenue derives from sharing a portion of negotiated provider discounts with insurer/policyholder (example: ~$1,000 monthly savings on $5–6K home care; ~$250 retained by CareScout per month over claim duration, varies by claim type/length) .
  • U.K. AXA/Santander case: Trial scheduled to start in early March; could last ~6 weeks if no settlement; outcome not in base plan .
  • Funding of new CareScout insurance entity: $75M expected to be funded from existing holding company resources; base plan does not include uncertain AXA-related proceeds .

Estimates Context

  • We attempted to pull S&P Global (Capital IQ) consensus for Q4 2024 EPS and revenue as well as prior quarters; data were unavailable due to request limits at the time of analysis. As a result, we cannot quantify beats/misses versus Street for Q4 2024 now and will update when accessible (S&P Global).
  • Directionally, Enact’s results remained strong while consolidated results were pressured by LTC A/E volatility and liability remeasurement losses, which would have influenced consensus comparison .

Key Takeaways for Investors

  • Core engine intact: Enact continues to be a cash and earnings anchor (Q4 AOI $137M; PMIERs 167%), supporting buybacks and providing resilience amid LTC volatility .
  • LTC remains the swing factor: Liability remeasurement losses and persistent A/E headwinds drove Q4 LTC AOI to $(104)M; management cautions ~$65M average quarterly A/E losses could persist into 2025 .
  • Capital deployment accelerating: $51M Q4 repurchases, with $100–$120M targeted in 2025, and ongoing debt optimization; holding-company liquidity adequate at $294M .
  • Stat capital solid though lower: GLIC RBC 306% (from 317% in Q3), with positive cash-flow testing margin ($0.5–$1.0B) post assumption updates—supports self-sustainability narrative of legacy blocks .
  • CareScout optionality building: National network scale, clearer monetization mechanics, reinsured new product launch targeted for 2025, and planned $75M capitalization—an emerging growth vector and potential claim savings lever .
  • Watch 2025 catalysts: Enact’s capital returns cadence, buyback run-rate, CareScout product launch milestones, LTC assumption/A/E trajectory, and any outcomes from the AXA/Santander case timeline .

References

  • Q4 2024 8‑K Press Release and Financial Supplement: .
  • Q4 2024 Press Release (Business Wire): .
  • Q4 2024 Earnings Call Transcript: and .
  • Q3 2024 Press Release: .
  • Q2 2024 Press Release: .