Q3 2020 Genworth Financial Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to the Genworth Financial's third quarter 2020 earnings Conference call.
My name is Jennifer and I will be your coordinator today.
This time, all participants are in a listen only mode.
We will facilitate a question and answer session towards the end of this conference call.
As a reminder, the conference is being recorded for replay purposes also.
Also we ask that you refrain from using cell phones speaker phones or headsets during the <unk> portion of today's call.
I would now like to turn the presentation over to Tim Allen's Vice President of Investor Relations Mr. Owens you May proceed.
Good morning, Thank you for joining Genworths third quarter 2020 earnings call. Our speakers are once again were announced this morning, please excuse any sound quality technical issues that may arise.
Our press release and financial supplement were released last night and this morning, our earnings presentation was posted to our website and will be referenced during our call.
We encourage you to review all of these materials.
Today, you will hear from our President and Chief Executive Officer, Tom Mcinerney, followed by Dan Sheehan, Chief Financial Officer, and Chief Investment Officer Oh.
Oh, we're not prepared comments, we will open up the call for a question and answer period.
In addition to our speakers, Kevin Schneider, Chief operating officer will be available to take your questions.
During the call. This morning, we may make various forward looking statements.
Actual results may differ materially from such statements.
We advise you to read the cautionary notes regarding forward looking statements are not earning release unrelated prison question as well as the risk factor of our most recent annual report on form 10-K, that's filed it yet.
This morning's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors.
Not financial supplement earnings release, and Investor materials, non-GAAP measures have been reconciled to GAAP, where required in accordance with US if you will.
Also when we talk about results for Australia.
Please note that all percentage changes exclude the impact of foreign exchange.
Language refers to the statutory results are estimates or the timing of the filing that's true statement.
And now I'll turn the call over to our President and CEO, Tom Bakas on it.
Thank you very much.
Morning, everyone.
Morning, Paul.
First I'd like to discuss the status of authentic sends actually all those too wide I.
I'll touch on progress across several general there's other strategic priorities.
Got a brief overview of our strong third quarter results before turning the call over to Dan Sheehan Genworth financial investment officer.
Earlier this week zone was announced it was why did make significant progress towards the only capital funding and other requirements in order to close the Oceanwide transaction is.
As indicated in the documentation is submitted to Genworth.
Well the capital expects to be able to finalize the 1.8 billion financing in November.
Well. She was also focus on the funds the mainland China.
Provide the remaining amount of capital required to trade with the total purchase price of 543 per share.
We can close the transaction by November Thirtyth.
Subject to timely receipt of regulatory approvals and clearances.
Additionally, that's why we've made progress in the China, well regulatory process submitting updated information requesting confirmation of the extension of the acceptance of the filing and the Chinese National development, and reform commission or condition or NDRC.
We are extremely pleased without your wife's progress and update.
Genworth Chairman Jim repeat.
In regular communication whatsoever.
Oh sure why throughout this process and we will continue to maintain a dialogue with them.
As they work to complete the remaining steps to close.
We are hopeful that oceanwide transaction funding will be completed in time to close the transaction.
November 30.
Without the need for additional extension.
We look forward to providing further updates.
As we work toward a successful closing of the transaction.
In parallel with the transaction process, we remain focused on executing well considering doing has gotten worse liquid position in order to meet our ongoing capital obligations.
These plans include raising 750 million of debt. So you have some like holding company level, which we completed in the third quarter.
Certain of those proceeds will be used to aggressor or 338 million of debt.
What's occurring in February of 2021, which Dan will discuss as part of our overall liquidity position in his remarks.
We also continue to take steps to prepare for a potential IPO of our U.S. business, we're making good progress on these efforts will continue to take steps to position ourselves to launch an IPO subject to market conditions. If the China Oceanwide transaction is further delayed were terminated.
We're also making great progress on multiyear LTC rate action plan or my rough.
What's remains essential to establish our legacy long term care insurance business year to date, we have received approvals on fiber 95 billion of annualized enforce premiums representing a weighted average Briton an increase of 29%.
173 million of annual incremental premiums going forward.
On a cumulative net present value basis since 2012.
Thats now exceeds approximately 13.5 billion of approved LTC premium rate increases.
We are committed to developing industry wide solutions to enhance the vitality of long term care insurance industry through our continued development.
I see and its long term care insurance Executive task force to this end.
And then I see subgroup was recently formed to focus on LTC insurance reduced benefit options.
We are working to identify options and develop recommendations to provide customers with more choices regarding modifications to their LTC contract benefits were policies are no longer affordable due to rate increases.
Before I turn the call over to Dan I will provide a high level overview of our financial performance for the third quarter. We delivered strong net income of 418 million and adjusted operating income of 132 million led by outstanding performance.
US mortgage insurance business.
Globally 19 pandemic continue to impact Genworths businesses in a number of ways. The third quarter, we saw sequential improvement in unemployment trends lower levels of new mortgage delinquencies relative to the second quarter and a robust mortgage origination market, all which benefited the U.S. and my business.
Mortality remain elevated relative to the prior year, which had a mix impact on the LTC and life insurance businesses.
U.S. words insurance reported adjusted operating income of 141 million.
Compared with an adjusted operating loss of 3 million in the prior quarter and adjusted operating income was $137 million in the prior year.
The sequential improvement was driven by lower delinquencies and incurred but not reported or.
Favorability you.
Most of my team 26.6 billion and new insurance written during the quarter up 41% versus the prior year, driven primarily by higher refinance originations and a larger private mortgage insurance market.
At the end of the quarter, you optimize pmires sufficiency ratio was 132% in excess of 1 billion above the published requirements.
Our Australia business reported adjusted operating income of 7 million up from $1 million in the prior quarter and down from 12 million in the prior year.
Capital levels remained strong with approximately 300 million Australian dollars above management targets.
In response to continued uncertainty in the macro economic environment, we are preserving capital Genworth mortgage insurance subsidiaries and therefore, we do not expect to receive further dividends for the mortgage insurance businesses in 2020.
Amount and timing of dividends and 2021 will be will depend on a variety of factors, including the timing of economic recovery <unk> <unk> from Cove at 19.
And you know its life insurance, we delivered adjusted operating income of 14 million up from a loss of 5 million in the prior quarter and a loss of $1 million of the prior year. This.
That's total included an adjusted operating loss of $69 million in life insurance due primarily to higher amortization of deferred acquisition costs versus the prior quarter and year offset by adjusted operating income of $59 million in long term care insurance and $24 million in fixed annuities.
Long term care insurance, we're still saying higher than normal claim terminations impart due to government agencies as well as lower incidence of new claims we have strengthened our I'd be in our reserves as a result and are continuing to monitor these trends closely.
I am proud of the continued strong execution across our teams all of whom are continuing to deliver excellent service to our customers in a remote work environment.
Out of an abundance of caution we have decided to maintain or office closures and work from home status until lets say texting is widely available to the general public.
Some recent vaccine guidance, we will not open our offices any earlier than July 1st 2021.
Well uncertainty remains high we are confident there we're taking the right steps to position our businesses to navigate uncertainty.
Focusing on the factors, we can control continuing to operate effectively and maintaining strong capital positions in our mortgage insurance businesses.
We will consider maximize the company's value for our shareholders by taking proactive steps to improve our financial flexibility, while working tirelessly towards the successful conclusion of the merger with Ocean one.
With that.
I'll now turn the call over to Dan.
Thanks, Tom and good morning, everyone.
Today, I will cover our financial results for the third quarter capital positions of our subsidiaries and holding company liquidity.
While we continue to face challenges created by the pandemic I'm pleased with the overall progress made in each of these areas during the quarter and improved earnings strong capital ratios in our mortgage insurance businesses.
Incremental liquidity at the holding company.
We reported net income available to genworth shareholders for the quarter, a 418 million and adjusted operating income of 132 million.
The primary driver of the difference between adjusted operating income and net income was 250 million of net gains from the sales U.S. Treasury scripts and our life insurance business as we continue to reposition the portfolio at a time when the market value of those securities said appreciate it significantly.
The U.S. mortgage and housing market does remain resilient through this period of uncertainty, but improving home prices, a very large origination market and moderating delinquencies from the earlier peak.
Our U.S. semi business has benefited from its participation in this market, which includes strong underlying mortgage credit quality fundamentals.
We're pleased with the performance of the business and the improvement in delinquency and loss trends.
U.S.M. <unk> third quarter financial results improved sequentially, primarily driven by lower levels of new delinquencies and incurred but not reported reserves, where I'd be at our capability.
For the quarter U.S.M. I had adjusted operating income of 141 million and reported a loss ratio of 18%.
Well new primary delinquencies during the third quarter was still elevated burst pretty cold at levels. They were down 66% sequentially with approximately 75 to sign up new primary delinquencies being reported import Barents flat, which make you already an elevated rate.
Our assumed eventual claim rate or low rate for the quarter is new delinquencies once again blended a lower expectation of claims the delinquencies currently in forbearance plans with a higher expected claim rates the delinquencies outside of a forbearance flat.
We continue to rely on our past hurricane delayed at low rates, which were materially lower given prior effectiveness or pulled their rights.
Our experience is that well barents roll rates through the pandemic.
In addition to improving new delinquencies U.S. my release 23 million of the 28 million an increase of I'd be in our reserve that was established in the prior quarter as new delinquency trends improve.
Our service or reported forbearance trends, which are a leading indicator of delinquencies have declined from peak levels in may and ended the third quarter was 6.7% or 61200 of our active primary policies reported and Oh parents flat.
63% of that wasn't there it's being reported as delinquent.
We ended the quarter with 49700 total primary delinquencies or delinquency rate of 5.4% spoke of which decreased sequentially as cures outpace new delinquencies in the quarter.
Primary new insurance written and U.S. am I was 26.6 billion in the quarter up 41% versus the prior year, primarily driven by higher refinancing activity at a larger private mortgage insurance market.
We estimate our market share will be strong but down sequentially.
As our updated view of risk under the prevailing conditions impacted our participation at bullet can make their transactions and our decision to adjust our pricing more generally.
While our primary insurance in force is 12% to 15% versus the prior year lower persistency, partially offsets the strong business levels.
In Australia, the economy continues to recover with stability in the unemployment rate and moderating declines in home prices, although it will be sometime before the economy slowly recovers to pre kogas levels during the quarter, the Australian Federal government and Australia as large banks extended the home and business long deferral program, which will allow eligible borrowers additional assays.
Hence the on the original six month forbearance period.
Proximately, 7% of total Australia households are utilizing these programs down from 11% last quarter.
Australia by approximately 3% of aren't sure Bose <unk> 31000 laws are currently participating in these forbearance programs down from over 48000 loans at June Thirtyth 2020.
Under Australian regulatory guidelines. These loans are not supported and stuff like that.
The business increased the loss reserves by 18 million less dollars last quarter and 24 million. This quarter two accounts for current backlog economic conditions disruption to normal delinquency patterns and uncertainty regarding payment holiday deferrals.
Adjusted operating income for Australia for the third quarter was 7 million.
From 1 million in the prior quarter and down from 12 million in the prior year.
The U.S. GAAP loss ratio for the quarter was 37%, which was lower than the prior quarter, 63% and slightly higher than the prior year.
Low interest rate and gradually improving consumer confidence following the initial Coca 19, Lockdown grow 5.5 billion, a flow and I W, which was up 14% sequentially and 17% versus the prior year.
Consistent with prior years in the fourth quarter of 2020, our mortgage insurance business in Australia is expected to complete its annual review of that screening of earnings pattern.
In addition, the business will continue to assess the appropriateness of its loss reserves as the pace of the economic recovery and changes to delinquency patterns, including payment holiday deferral become clear.
Turning to U.S. light segment reported adjusted operating income of 14 million for the third quarter.
You asked like businesses continue to experience elevated mortality across all of our products.
In part attributable to the cold at 19 pandemic.
We also continue to experience negative impact on DAC amortization and reserves from our 20 year term and 10 year term Universal life insurance box as they enter their posts level premium period.
Net investment income to the U.S. life was up sequentially and.
Whereas the prior year included higher limited partnership income.
As well as favorable inflation adjustments on the U.S. treasury inflation protected securities.
In long term care claim terminations were significantly higher than the third quarter versus the prior year and flat to the prior quarter. Although we do not require desk tickets for LTC terminations and cannot make a direct attribution to official causes of death. We do believe some degree of incremental terminations were the result of cold at 19, and we continue to monitor these.
Trends closely.
Although new claimants girls on choice one choice two blocks continue to grow as they age we've experienced favorable development on I'd be in our claims from lower new claim incidents overall.
Since the start of COVID-19 pandemic new claim submission to decrease further driving additional favorable I'd be an article.
However, we do believe that this more recent reduction incident. This temporary reflecting delays in reporting plane do the social distancing themselves are in place protocols and that our incidence experience will ultimately was mboe previous trends.
As a result, we further strengthened our I'd be at our by 24 million in the quarter.
The overall I'd be in our calculation will be reviewed and recalibrated during our fourth quarter assumption review.
Shifting to enforce rate actions for LTC. The overall benefits was slightly lower than the prior quarter and prior year as illustrated on page 10 of the Investor presentation, while the benefit reductions from imports rate actions remain strong at 2020.
There were lower relative to 2019, which benefited from several large state implementations are filing activity at the new rate actions also accelerated during the third quarter and we expect that to continue for the remainder of the year.
These filings include your product series for which we've not requested rate increases in the past. They also include a variety of benefit reduction alternatives, which we've seen more policyholder slack.
During the quarter Genworth received approval impacting 338 million up damage with a weighted average approval rate of 28%.
We remain engaged with state regulators on the importance of Actuarially justified rate increases in addition to the approvals. We received so far this year. We're also working on current filings and hope to secure additional significant approvals during the fourth quarter of 20 Twond.
Turning to life insurance overall mortality for the quarter was elevated versus the prior quarter and prior year third quarter included an estimate of approximately 12 million and cold at 19 related claims based upon death certificates received state.
Absent the COVID-19 impacts mortality would have been flat versus the prior quarter, but modestly higher versus the prior year.
The term life insurance business was negatively impacted by shock lapses, but continue to be higher than our original locked in assumptions as more of the large 20 year level premium term life insurance business written in the year 2000, and the post level premium period during the quarter.
Total term life insurance, DAC amortization and non cash impact primarily related to these term life lapses reduced earnings by 34 million after tax which.
Which is unfavorable compared to the prior quarter.
At sales levels declined in the second half of 2000, we expect amortization related to term policies entering the post level period to begin to decrease in the fourth quarter and into 2021.
Going forward, given smaller blocks <unk> reinsurance agreements in place, we would expect termed DAC amortization on policies entering the pause level period to be lower than what we observed in 2019, and thus far in 2020.
Life insurance results also continued to be negatively impacted by losses in our term universal life insurance product as.
Like did you each year.
Given the declining rates. During this period you currently believe that will likely need to increase statutory reserves by approximately 200 million Twenty-twenty, which would equate to roughly a 15 to 20 point reduction in risk based capital Genworth life insurance company or black.
For L. T C. We expect to finalize the claims deserve you concurrent with the active life Reserve review also in the fourth quarter.
While this work is ongoing current trends, we not indicated need to strengthen the cranes reserve those assumptions appear to be holding up in the accident.
For corporate another are adjusted operating losses 49 million for the third quarter. This losses high ever supplier boredom, primarily tribute of bolts attacked adjustments.
Are approximately 79 billion cash in the bathroom portfolio continues to perform well given me uncertain macroeconomic environment to fix maturity unrealized gain position continue to improve reaching 9.2 billion at the end of the quarter affecting improvements in the credit markets benign credit migration and minimal impairments.
Turning to capital levels are you asking Australia mortgage insurance business is maintained strong capital positions at the end of the third quarter.
And U S. M. I you finished the quarter with a P. Myers sufficiency ratio of 132% for approximately 1.1 billion above published requirements as of September 30th 2020.
The decline in our team are sufficient cheever safire quarter was driven by strong new business levels, partially offset by elevated boxes and the acceleration of the amortization of existing insurance transactions.
In addition capital credit for my 2009 to 2019 access of last contract decrease those delinquency development has been more favorable than previously expected. These.
These impacts won't be partially offset by strong business cashflows.
In October as part of a normal credit was transfer program. We completed an insurance link no transaction, which will provide an additional 350 million pmiers credit and would result in a P. Mar sufficiency ratio of 147% against published requirements.
The PMI sufficiency calculation continues to include the effect of the 30 per cent multiplier for eligible delinquencies associated with COVID-19.
As we noted in the press release the G. S. He recently imposed certain capital restrictions on are you at semi business, including the requirement that chemical maintain 115% a few hours minimum required assets, which will remain in effect until certain conditions are met.
Or Australia M. I business ended the quarter with an estimated prescribed capital amount or P. C. A ratio of 179%, which is approximately 300 million Australian dollars above the high end of the management target range of 132, 244%.
Post quarter and the business redeem the remaining portion of its tier two that do in 2025, leaving only 190 million Australian dollars Outstanding June 2030.
We estimate capital and Genworth life insurance company or Glick as a percentage of company action level RBC to be approximately 240 per cent either the end of the third quarter up approximately 15 points from the second border.
The improvement was primarily driven by L. T C performance and a reduction in reserves unbearable annuities related to the continued equity market recovery.
For holding company cash we ended the quarter with $840 million in cash in liquid assets or approximately 450 million above are targeted cache buffer.
Approximately 340 million of the holding company cash balance is ring fenced for our February 2021, senior notes majority, which we plan to pay at that time.
Page 16 of the Investor presentation provides the quarterly detail, including cash and blows of 436 million kind of recent U S and my dad issuance and enter company tax payments of 23 million.
Cash uses in the quarter include 125 million paid to ask it in July as part of the agreed upon settlement.
Three 9 million for that service and 18 million for 2021 definitely purchases were made during open windows during the quarter.
For upcoming holding company debt obligations. We have principal balance is 338 million maturing in February 2021, and 659 million maturing in September 2021.
As we noted last border, we're not expecting dividends for my mortgage insurance businesses for the rest of the 2020 to preserve capital need subsidiaries given the uncertainty of COVID-19.
To fully address the September 21 maturity, we continue to prepare for an I P. O a R. U S M I business subject to market conditions, if the transaction would ocean why it is for the delay to terminated.
Agreement with Ocean wide affords us flexibility to pursue this or other past strengthen liquidity position.
And clothing would take the numerous steps to include the liquidity and financial flexibility of a holding company.
L as physician our business navigate these at certain times, we're pleased with a financial progress and remained focused on providing value to all of our key stake holders.
With that let's open it up to questions.
Ladies and gentlemen, we will now begin that Q&A portion of the call. As a reminder, please refrain from using cellphones Speakerphones headsets.
I want to ask a question.
Anytime your question has already been answered or you would like to withdraw your question. Please press star to to be removed from the queue. Please press star one now.
We'll go first two hour now Switzer light.
No I'm, sorry, I did not intend to ask questions. Thank you.
Once again for asking the question that star one.
We'll go next to stand Mercer.
And your line is open.
Did not intend to ask a question I'm sorry.
Hello.
Next Tyshaun Perkins with waterfall asset management.
Thank you for having called guys I just wanted to clarify a couple of things related to central <unk> Ocean childish and like closing in or the potential I P. O equity ideal the D. S M I subsidiary could.
Could we can walk through the sequence am that invents if possible at all.
First of all and thanks for the question so.
And I was we disclosed earlier in the week.
You know based on information promotion wide and documentation submitted to Genworth, we expect that honey honey capital funding will occur of November in there gathering the funds I mean, they're so they have a lot of different sources of cats and maybe so there.
Gathering that I could put it in an account, but you know they do need.
Aw Reapproval, if you will from the N D. R C.
And save Us authorized exchange.
Based on everything we know or hopeful that we can close by the end of the month with no need for an extension on the U S. M. I T O. We're continuing to operate assuming there isn't a real close obviously to be to be cautious although are cautiously optimistic that we will.
Hello to close the deal and so we're doing all the steps.
The violence.
You see there sign up here is et cetera.
And probably a lot.
That and so are you.
We would be in a position to launch an ideal subject to market conditions and all right now they're pretty positive and obviously they use my business is doing well recovering from COVID-19, and so Ah current plan. If there is no deal would be to launch an idea of some time.
The first half of next year.
N a incested and you chose as in your in.
In any scenario in which you called childish and wallet.
Collection, and still muscle any form of the Ivy L. U S M I.
I mean, you do that yeah. That's another good question, Sean I would say look I I think that you're semi as a valuable business I would say, we're disappointed and and the man on the management team.
Rating agencies don't give us full credit for the terrific performance of R. U as in my business I mean, I think the team there I've been here eight years now almost in between there has had I think awesome results for the last eight years. They continue to do very well on the orange side significant access capital.
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A few hours requirements.
Dan mentioned doesn't include the island, Yeah, we did in the fourth quarter. We're at 147%. So I don't know why the U S and my ratings are higher.
Whether we do the deal or not one of the things that we're working with.
The rating agency one to some degree of the Jetski is on is.
If we if we did have an idea. So there are some public slow for you a semi that should be you know.
A significant positive for the ratings I'm asking to ready for the higher and more consistent with it with our competitors given the performance of U S. M. I is equal or better than most of our competitors. So that that is.
Possible there'll be up to the obviously the new the New York Post closing.
But there there is a possibility that we would decide to do the I T O anyway, yes.
By doing that that allows us to get to the writing that we think we deserve now.
Six cents.
Yeah that does them and I really appreciate that disclosure as it relates to the on the accident settlement would there be any proceeds from the China Ocean like clothing that have been here March or would be earmarked for any form the same on the accident access settlement.
Another question John So the.
And the ocean like closing down we think that what caused by the end of the month, we do provide in the transactions, but there's wanted to have done in a new capital coming into Genworth apart from the purchase price you know the 2.7 billion that goes to shareholders at 543 for sure.
But the one and a half and you know that's gonna come in and three crosses a 500 million each.
One at the end of January of 21, one at the end of April one at the end of.
July.
And so we believe with theater 14 million of cash we have on hand, without one and a half billion.
Potentially an I P. L. As we just talked about Sean that those the cash.
Okay, 840 million and one of happiness 2.3 billion and so we we think that that is.
You know, we'll go towards reducing the liabilities of the 2021 that wishes around 1 billion and then we.
Oh actually under the the note.
In two tranches in 20 2022.
And then so so that that is the expectation in terms of.
What proceeds from the further in depth somebody Ocean want Hollywood to use I think that macassar.
The the other.
Possibilities other investments in the different businesses, but our main focus will be on using that one and a half million plus cash on hand, and certainly any dividends, we get an extra in the future from the B M. I subsidiaries to pay off the 2021 down and retire they ask liability in 2022.
Very helpful. Thanks, so much.
Oh, you're very welcome Sean Thanks for the questions.
We'll go next to manual Garcia what Anchorage.
Alright, a couple of questions one for the the horny capital I think in the past one of the reasons you describe the hold up with that whole knee itself isn't providing the 1.8 they were gonna get a bunch of L. PS behind them to provide it.
Is that now then receive do they have all of that capital all the funding for the 1.8 billion already approved and it's just a matter of getting a regulatory approval.
Manual. Thanks, Thanks for the question, Yeah, I I would say I think we're very good shape.
On the 1.8 billion and I think the holiday and the partners have been I've been arranged pretty much and you know the.
35% of the funding comes from mainland China, I think that's a good shape.
Obviously, we are dependent on the actual funding of those those together the 2.7 billion on the.
The approval a N D R C and then to save authorization.
The window how that.
Conversion process works.
We do think that I mean, obviously I want to get ahead of the Chinese regulators et cetera decision to make but.
The beginning.
Based on a number of conversations that I.
With.
Andrew.
Yeah.
Very close all of them.
We do believe that they continue to support the deal so.
<unk>.
<unk> you know November 5th today, So the next three weeks or so.
Well, we hope goes through those come in.
From India soon saves and then you know the money would be watered out of mainland China, and then horny capital would.
Transfer at 1.8 billion that we'd be able to close the deal by the end of the end of November.
Yeah Yeah.
Yeah, No no I I I don't think the concern has been a regular I guess the concern is really been there's only have the 1.8.
I guess he answers it does the answer is yes.
I think based on hot or not yet for.
Yeah, It is and everything we've heard everything the honey capital.
1.8 billion as in good shape.
That's in good shape. Okay. Okay. Thank you for that second question I had is for the 1.59 and a new capital in the three subsequent tranches yep is that money already financing locked in or is there gonna be a process next year of getting.
That capital prove I, what what's the new updated source of that 1.5 billion and there's any uncertainty of it actually coming in to the entity post deal closing.
Again going back to the beginning of the deal a significant reason that the gentleman if regulators are supportive of the deal is because they don't Wanna afternoon. So that's a big part of the transaction and I think all the regulators and generous and genworth itself have done their duty.
And some of them, one and a half billion and so on that.
And why can't rely on their total businesses around the world and castle and so that's again based on.
In particular in the last year in our selective participation in some forward commitment transactions.
We we do estimate that are chairs down from the prior quarter Uhm as Tom mentioned, we regularly uhm marketshare moves around regain some we lose some that the customer level and a quarter quarter to quarter basis, but I guess, what I would tell you as we you know we pulled back in some price sensitive areas of the market, we didn't do quite as much.
Would be the forward commitment business managing our our new business volumes is is like magic and portfolio. We're always trying to manage the risks gonna reward returned tradeoffs associated with it and with the extensive volume that was available in the market. This time.
Uhm, we we chose to two trimmed back some of that and thank our shares down a little but we feel very good about our shared level and the level of it'll still come in at and we think we are you know weird poised to continue to drive strong sure and perhaps additional sure progression going forward. This is a competitive market and if I was gonna.
Be competitive and and we we react to that with an eye on <unk> maintain the returns were trying to cheap for our business.
It's always hard to know what other competitors are doing but but from my perspective and looking at it.
The goals of Us a my I think they're well above their expectations this year and.
In terms of anti W. being written and I think it's good execution I think by the team and as I say you know they again, we're very disappointed with the ratings. We think the ratings are you estimate along and we do think that the rating because we are lower than our competitors, even though we operate as well or better than our competitors. We think that has.
Channel in the market and so we it was it was at that level and not really pressure from the rest of the rest of the market space.
Okay and then.
I think the general consensus back in the second quarter was on average pricing was up 10, 20% from pre coded.
Do you think Thats still is generally the case.
All right I'd say.
Good.
Overall that was probably that's probably in the ballpark, we it's probably backed off a little bit to Jeff. It's still about the it's still above the level that we as we entered into this period and it's starting to reflect some of the performance we're seeing as.
As the forbearance trends come down and as.
As delinquencies start to decline and as a as the cures are doing a good job the against the new delinquencies. So no we.
We see overall, a pretty good environment and it's on a good trend.
So I think were still up compared to where we started maybe not the full 20% backed off a little bit.
Okay, and then last question, Yeah, five ends up winning and pushing through that shift in corporate tax rates.
<unk> term care.
Sure. Thanks, Howard for both of those questions are good morning. So you know I I don't have a you know we made the settlement as part of the settlement there are still some invoices coming in from from Absa and we gave the market a view that we thought that would be.
A little over 100 million pounds of new the invoices that were in but that will sort of be pass through and I think that's all.
[laughter] proceeding pretty much as we expected.
As I have said on a number of previous calls.
As you know Howard I spent 11 years in Europe, So I'm very familiar with all these insurance and banking cases in terms of the mis selling in the.
The president is that.
In almost all cases in the end.
The banking partner because they did all the selling and insurers did not banking partners were held responsible and so.
My view is that that's still the case.
Thank you errors Banco sentiment, there and you know.
I would think going forward, we ultimately.
Actually we would ultimately.
To be successful in you know.
In pursuing recoveries and out as we said as part of our agreement with acts that we would we would share to the pit extent, we've made we've made payments in that so you know that.
Ill have to go through a process.
And.
That's that's really more access decision than ours, but but again, the president would say that at some point in the future.
We would get recovery on the.
LTC side, we went through the numbers you know 595 million of premiums approval average of 29% limit it to 173 million.
In a net present value basis, our cumulative is now 13 and have today I will tell you we have several large states in our LTC premium approval.
Q, if you will of where we anticipate.
That we will receive.
Is to grab them. They they spent about more than I I like I would like I I think that they're doing that to make it easier for policyholders, which is understandable, but we are still getting then that present value that we anticipated under the multi you're right action plans. So I think I think that's that's a plus.
[laughter]. Thank you very much.
You're welcome thanks.
Ladies and gentlemen, we have time for one final question coming in from child's sweat, let's probably asked me.
Thanks, Sorry, I was on mute Uhm wanted to follow up on the financing question for the Ocean wide transaction and.
Over to Mr. Mcinerney for closing comments.
Thank you very much Jennifer.
I also want to thank everybody for joining the call I also want to thank for that.
The question the question I think.
All all of you have asked very good questions doing a lot of investors aren't interested in so thank you for that I gave us a chance to I think.
You have a little bit more perspective on those.
I do want to reiterate that we're very pleased with the progress that oceanwide is making.
Since since the update previous settlement, we get on Monday.
Yeah, we they've made great strides in finalizing the financing with only capital as well as from the mainland.
Yeah, just despite that overall for that the division in the U S. Like Division concludes L. T C and fixed annuities I think.
At $59 million and 24 million respectively. It was yeah. It was a good quarter.
So you know I think particularly to put it in it.
That particular U S M I in the context of we're still.
Challenged as a country and I guess as a global economy with all the 19th so yeah I I when I look at the third quarter of 418 million net income in the under 32 million.
But just in operating income you know I think it's just a very strong quarter and you know that bodes well, obviously I think China Ocean why the chairman's and is encouraged by the quarterly results and so hopefully that will continue obviously COVID-19 is still a significant issue and.
We'll see how that plays out the cases are growing up so it's something obviously too focused on again, thanks to everybody for your interest you support John worth of shareholders.
And with that I'll turn the call back over to Jennifer.
Ladies and gentlemen, this concludes Genworth financial third card or conference call. Thank you for your participation at this time to call and.
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