Q4 2022 Genworth Financial Inc Earnings Call

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Good morning ladies and gentlemen and welcome to Genworth Financial's fourth quarter 2022 earnings conference call. My name is Jim and I will be your coordinator today. At this time all participants are in a listen only mode and 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, we ask that you refrain from using cell phones, speaker phones, or headsets during the Q&A portion of today's call. I would now like to turn the presentation over to Sarah Cruz, Director of Investor Relations. Please go ahead. Thank you, Operator. Good morning.

available in the Investor Relations section of the Genrearth website, investor.genrearth.com. Our earnings released and financial supplement can also be found there and we encourage you to review these materials.

Following our prepared remarks, we will open the call up for a question and answer period. In addition to our speakers, Brian Henneguest, President of our U.S. Life Insurance segment, and Jerome Upton, Deputy Chief Financial Officer and Controller will also be available to take your questions.

During the call this morning, we may make various forward-looking statements. Our actual results may differ materially from such statements.

We advise you to read the cautionary notes regarding forward-looking statements in our earnings release and related presentations, as well as the risk factors of our most recent annual report on Form 10-K as filed with the SBC.

This morning's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors.

In our financial supplement earnings release and investor materials, non-GAAP measures have been reconciled to GAAP where required in accordance with the SEC rules.

And now, I'll turn the call over to our President and CEO , Tom McInerney. Thank you very much, Sarah. Good morning, everyone, and thank you for joining our fourth quarter earnings call. Before I review our strong fourth quarter and full year 2022 results, I want to acknowledge our outstanding progress against our strategic priorities throughout the year. I'm incredibly proud of these accomplishments, particularly achieving our debt target, meeting the conditions to remove the government sponsored enterprises or GSC restrictions that were placed on enact, returning capital to shareholders for the first time in over 13 years.

receiving multiple ratings upgrades. These achievements have improved generous financial strength and allowed us to enter 2023 with a greater level flexibility to invest in growth and continue returning capital to our shareholders.

to speak to each of these achievements a bit further.

And may have last year the General's Board authorized a new share reproaches program of up to 350 million. This was an important milestone reflecting our improved financial position, the boards confidence in our strategy and our future, and our commitment to our strategic priorities.

Since the authorization, we've repurchased 64 million worth of outstanding shares and an average price less than $4 per share.

We were careful to restrict the level repurchases in 2022 until we reduced the debt to 900 million and satisfied the conditions to remove the GST capital restrictions.

Having now accomplished both objectives, we plan to pick up the pace of share repurchases subject to market conditions and general share price.

Throughout 2022, the holding company received credit ratings upgrades from each of the three major rating agencies reflecting substantial improvement in our credit profile.

In September , Genworth achieved a critical milestone when we paid off our remaining senior notes due in 2024, marking the achievement of our long-term holding company debt target of a billion or less.

Genworth ended 2022 with wholly complete debt under $900 million, reflecting over $3 billion of debt retired since 2013.

We believe this is a sustainable level of debt for the company to carry going forward with manageable interest expense obligations of approximately $60 million per year. However, we are open to further debt reduction if we have extra cash and attractive terms for further debt retirement.

By reaching our holding company debt target, we were positioned from a capital perspective to meet the financial conditions for removing restrictions placed on an act by the GSEs. We believe we fully met General's holding company financial conditions in both the third and fourth quarters of 2022, which should result in GSEs lifting restrictions on an act.

This is an important positive development for EnAct and for Genworth, as EnAct will no longer be subject to more stringent capital requirements than its peers once these restrictions are removed, putting EnAct on a more level playing field with competitors. The successful execution of these four actions is a testament to our commitment to driving value for our shareholders, and we will reward it with strong share price performance over 2022, despite the volatile macroeconomic environment. According to financial results, Genworth delivered excellent results in 2022 and finished the year strong. For the full year, net income was $609 million.

and adjusted operating income was $633 million, or $1.24 per diluted share, well above market expectations. These outstanding results were led by an act which had a very strong operating performance and end of the year with record insurance enforce.

In the fourth quarter, amidst the ongoing challenging backdrop, generalist generated excellent results. That income was 175 million, and adjusted operating income was 167 million, or 33 cents per diluted share.

Since an Act's IPO, Genworth has received approximately $370 million in capital from an Act, including $168 million in the fourth quarter.

Cashloids from an ACC have enabled us to achieve the key milestones I mentioned before, and will continue to benefit shareholders by fueling our share repurchase program and long-term growth strategy.

While our fourth quarter statutory processes are still underway, we expect U.S. life's statutory after-tax net income for the full year to be approximately $275 million, reflecting continued positive results for LTC, including pre-tax statutory income for the LTC legacy business.

approximately 255 million in 2022. We expect Glick's statutory capital surplus to increase from 2.9 billion at the end of 2021 to approximately 3 billion at year end 2022. Glick's estimated RBC ratio at year end 2022...

is currently projected to be approximately 299% in line with the prior RBC ratio of 289%. Our final statutory results will be available with our year-end statutory filings later this month.

According to our legacy LTC portfolio, we continue the strong momentum in our Multi-Year Rate Action Plan, or MIRAAP, the most effective tool we have to bring our legacy LTC portfolio to economic breakeven on a go-forward basis. We achieved a total of $549 million.

and annual premium rate increase approvals in 2022. Of that amount, we are awaiting the final disposition of a small number of the approvals as we work through implementation mechanics.

With the addition of these 2022 approvals, our cumulative progress is approximately $23.5 billion in approvals on a net present value basis since 2012.

The services business will include a digital platform where those in need of long-term care can search for and compare local care options bolstered by a preferred network of quality senior care providers.

We are in the process of vetting and recruiting network partners in order to offer attractive pricing on high quality care that will benefit both new and existing customers.

The services business is designed to reduce claim costs on our legacy LTC book.

as well as drive new revenue for January .

Second, we are investing in CareScout's existing clinical assessments business, where we see attractive opportunities for growth.

Karskot has a network of clinicians nationwide and as a leader in conducting clinical assessments for other insurance companies, healthcare organizations and consumers.

The third area of focus in our growth strategy is transforming the insurance and other product options available to fund long-term care.

This is the key part of developing a truly comprehensive approach to addressing the complexities of the aging journey. Offering new and more innovative insurance and other funding options for long-term care is dependent on achieving an AMIUS or better rating. We are still working on options to reduce the capital required to fund these products through innovative insurance arrangements and as a result,

Implementation of these new LTC funding products will likely occur in 2024 or later.

Finally, as we've said in the past, we see attractive longer-term growth opportunities to offer senior care services and funding solutions in international markets.

After building the business successfully in the U.S., we will look to eventually capitalize on opportunities in other markets with similar aging demographic challenges. The current timing for Care Scouts International expansion is planned for 2025 or later.

We are investing prudently to scale the Carascout Services business and leveraging our differentiated capabilities and experience.

including 40 plus years of experience and expertise in the LTC insurance business, data on 330,000 LTC claims paid to date to legacy LTC policyholders, existing relationships with a network of care assessment professionals who are mostly registered nurses, and existing relationships with providers and caregivers throughout the US.

We invested approximately $20 million in CareScout in 2022 to develop our care services business and clinical assessments capabilities, and we intend to make an additional investment of approximately $30 million in 2023.

As we move forward, General will maintain a disciplined capital allocation strategy balancing investments in growth with shared repurchases.

Before I close, I want to acknowledge Dan Xian and his extraordinary contributions and accomplishments at Boji Capital in Genworth over the last 25 years.

Dan has been an excellent investment leader for Genworth for decades. Under his leadership, the investment group has delivered outstanding results for many years. Over the last two years as CFO , he has helped lead Genworth through a very successful transition. Above all, Dan has been a good friend and colleague of mine since I joined Genworth, and I wish him all the best.

with that I'll turn it over to Dan. Thank you Tom and good morning everyone. Before I begin my comments in the quarter, I'd like to thank Tom and the entire Genworth team for their partnership. I've had a really good run here over my 25 years with GE and Genworth and I'm incredibly grateful for the opportunities I've had to work with so many talented people.

I'm proud of my contributions to strengthening our financial foundation, and I'm excited to see what the team builds on that foundation.

Now for the quarter. Genworth delivered another strong quarter capping off an excellent year for the company. We further strengthened our balance sheet while investing in growth and returning capital to shareholders.

We ended the year with liquidity above our cash target and lower leverage, reflecting our significant debt reduction throughout the year.

As a result of our successful execution, we believe we have satisfied the financial conditions for removing the PMR's capital restrictions placed on an act by the GSEs, which in turn should lift these restrictions on an act in the first quarter of 2023.

As Tom mentioned, this will be a very positive development for EnAct and Genworth as its majority owner, since EnAct will no longer be subject to more stringent capital requirements than its peers. Following Tom's high-level overview of full year and fourth quarter results, I will review our segment operating performance, including the results of our annual U.S. life insurance assumption review.

as well as our holding company liquidity position. Turning to slide seven, an axe insurance in force increased 10% year over year to a record 248 billion driven by new insurance written and higher persistency.

Primary new insurance written was down versus the prior year, a continuation of the trend we've seen as increased interest rates have resulted in lower mortgage originations.

As an act mentioned on its earnings call this morning, while elevated mortgage rates and decreased affordability have reduced demand, total housing inventory is below long-term levels and demand remains solid.

The higher interest rate environment has resulted in higher persistency and is a meaningful benefit to an ex-profitability.

The overall credit risk profile of an act's new insurance written also remains strong.

Moving to slide eight, an act had a favorable $42 million net pre-tax reserve release, which drove a loss ratio of 8%.

The reserve release was primarily driven by favorable cure performance on COVID-19 related delinquencies.

which was partially offset by reserve strengthening on 2022 new delinquencies and a prudent response to an uncertain economic outlook.

The estimated PMIers efficiency ratio of 165 percent or approximately 2.1 billion above published requirements remains strong.

Sufficiency decreased sequentially, driven by the operating company's dividend distribution to enact holdings.

In December , Genworth received a special dividend from an act of $148 million, which was the major driver of Genworth's enhanced liquidity profile as we ended the year. Further, an act's quarterly dividend payment of 14 cents per share generated proceeds of $19 million to Genworth.

Going forward, returns of capital from an act will continue to enable Genworth to generate excess cash.

I will now cover our US life insurance segment results starting on slide 9. The segment reported adjusted operating income of $38 million, reflecting adjusted operating income of $24 million from LTC and $16 million from fixed annuities, partially offset by an adjusted operating loss of $2 million in life insurance.

In our LTC insurance business, adjusted operating income was $24 million, compared to $25 million in the prior quarter, and $119 million in the prior year.

Results reflected lower terminations versus the prior year, as well as lower investment income versus the prior periods, and continued growth in new claims.

Earnings also benefited from higher-inforce rate actions versus the prior quarter due to favorable policy holder elections related to the legal settlements on PCS1 and PCS2 policies. The settlement impacts were smaller, however, in the current quarter than the settlement impacts in the fourth quarter of 2021. Moving to slide 10. Slide 10.

The elevated claim mortality we saw with the onset of the pandemic was lower in the current quarter versus last year, which is consistent with COVID-19 mortality trends in our life insurance business and nationwide.

The remaining balance on our previously established COVID-19 mortality reserve is 90 million.

As shown on the right hand side of slide 10, we saw a higher level of new active claims in 2022 compared to 2021, which indicates new claim incidents is trending back to pre-COVID-19 levels.

New claims of already continued to increase as expected, given the aging of the block and shifting our claims mix to higher cost facility-based care. As a reminder, our large choice one and choice two policy blocks, which are beginning to enter their claim years, have hired daily benefit amounts and inflation coverage than the older LTC blocks.

I would now like to discuss the results of our annual review of key actuarial assumptions in long-term care insurance, which is summarized on slide 11. I will note that consistent with our practice last year, the COVID-19 pandemic impacts for the businesses were generally not incorporated when reviewing our long-term assumptions, since we don't think the pandemic impacts are indicative of future trends while long-term loss performance.

In our assumption review of LTC claim reserves or disabled life reserves, we saw that in the aggregate, the disabled life reserve assumptions are holding up well, as they have for the last several years. Our review this year resulted in minimal change to the disabled life reserve balance.

As part of the LTC active life margin testing process for policies not yet on claim, we reviewed our long-term assumptions relative to experience as is our annual practice.

Our margins remain positive within the $500 million to $1 billion range consistent with last year. Therefore, there was no need to increase reserves and no P&L impact resulting from the assumption review.

We made a few refinements that had relatively minor impacts, including reducing the lapse assumptions in light of favorable experience from LPC settlement elections and benefit reductions and increasing our interest rate assumptions.

We also evaluated our assumptions regarding expectations of future premium rate increase approvals and benefit reductions. We have not yet changed the rate increase targets for GenWares Multi-Year Rate Action Plan from last year. However, based on favorable recent rate increase approval experience, regulatory support and settlement results, and other

we have updated our assumption for future approvals and benefit reductions, resulting in additional future value. This assumption update demonstrates our confidence and expectation of continued success in achieving actuarially justified LTC rate increases.

We now project the current targeted value of LTC premium increases and benefit reductions on a net present value basis to be approximately $30.3 billion in order to achieve economic breakeven. Since 2012 we've achieved approximately $23.5 billion in rate actions or over 75% of the rate increase in benefit reductions contemplated.

2022. During the full year of 2022 we received LTC Inforced Rate Action Approvals impacting 1.1 billion of annualized Inforced premiums with a weighted average increase of 48 percent, getting us to 549 million of annual premium rate increase approvals in 2022.

Our continued progress on our multi-year rate action plan and stabilization of the LTC block has also been in part through the LTC legal settlements, which have been beneficial to both our policyholders and to Genworth.

For policyholders, many have elected to reduce their benefits and in turn reduce or eliminate their premiums.

And for Genworth, that allows us to release reserves and reduce our tail risk on these policies.

The implementation of the second LTC legal settlement related to our PCS1 and two policies began on August 1st and covers approximately 15% of our LTC policy holders.

While we did see a favorable financial impact in the fourth quarter related to this settlement of 21 million before profits followed by losses, the financial impacts were not as large as they were in the prior year from the first settlement on our choice one policies, which applied to approximately 20% of our LTC policyholders given the smaller policy block.

The third LTC legal settlement related to our choice to policies is still pending. The final court approval hearing began in November and were awaiting the judges final ruling. This settlement represents 35% of our LTC block, as choice to is our largest LTC block of business.

The timing for the implementation of the choice two settlement will depend on when the court issues final approval of the settlement and whether there is any appeal of that final approval.

We would expect to begin implementation within a few months of final approval, which is expected shortly, or the favorable disposition of any appeal.

If there is an appeal, that process is estimated to take until mid-2024 to play out the conclusion.

Turning to slide 16 and 17 in our life insurance products, we reported an adjusted operating loss of 2 million, compared to operating losses of 33 million in the prior quarter and 98 million in the prior year. The key driver of the year-over-year improvement was an after-tax benefit from the Universal Life Annual Assumption Update of 34 million.

relative to an unfavorable $70 million charge in the prior year. The $34 million assumption update was primarily related to interest rates which rose throughout the year.

The life insurance products also experienced favorable mortality year over year as pandemic impacts subsided.

COVID-19 claims accounted for only 3 million of the loss, which was lower than the prior year's 27 million of COVID-19 claims.

In the current quarter, total term deferred acquisition costs, or DAC amortization, was 20 million after tax, which was higher than the prior year, primarily from 20-year term lapses.

Results in the quarter also benefited from not having a DAC recoverability charge in our universal life insurance products due to the favorable assumption update.

Regarding fixed annuities, adjusted operating income was $16 million compared to $19 million in the prior quarter and $20 million in the prior year, reflecting lower net spreads from bond calls, commercial mortgage loan prepayments, and continued block runoff.

and a smaller benefit from interest rates, which did not increase as much as in the prior quarter.

Our runoff segment comprised mainly of variable annuity products reported an adjusted operating income of $17 million for the current quarter compared to $9 million in the prior quarter and $16 million in the prior year. Current quarter results were impacted by positive equity market performance. As indicated on slide 18, we're estimating the consolidated risk of the current quarter.

December 31st, 2021.

We're pleased with this result given the volatility we saw in the equity markets this year impacting our variable annuity block

Estimated combined statutory net income for the life companies in 2022 was $275 million compared to $666 million in 2021. The current year estimate reflects lower earnings in LTC, driven by new claims growth and lower earnings from enforced rate actions, again largely due to legal settlement impacts in the current year that are lower than last year's.

partially offset by the improved mortality in life products as the pandemic impacts subside. Current year results also include an unfavorable impact of variability products from equity market performance offset by a net favorable impact from assumption updates and cash flow testing. Before I move on from our US life insurance results, I wanted to provide an update on our adoption of the new GAP accounting standard.

long-duration targeted improvements or LVTI impacting our life insurance companies.

As noted on slides 19 and 20, we adopted this new standard on January 1, 2023, and were required to represent certain financial information beginning on January 1, 2021, otherwise known as the transition date. This new standard does not impact an act, and as Tom and I have mentioned before.

it will not impact our cash flows, economic value, or statutory accounting and related capital levels for our life insurance companies.

In the third quarter, we disclosed a preliminary estimate for the impact to accumulated other comprehensive income or AOCI from LTC. Today, we're providing an update on the total impact to our US GAAP equity position from the adoption of LDTI as of the January 1st, 2021 transition date.

As of that date, GenWare's US GAAP equity of $15.3 billion will decrease by $13.7 billion after tax. As we've discussed in previous quarters, the most significant impact to our equity is from AOCI, which will decrease by $11.5 billion as of the transition date. The decrease is primarily due to the requirement to remeasure our insurance liabilities by $15.7 billion.

It is worth pointing out that with the adoption of LDTI, our insurance liabilities, especially for LTC, will be more sensitive to movements in interest rates. For example, if the transition date adjustment used current rates and held everything else constant.

the $11.5 billion reduction in AOCI would have more than reversed and the change in AOCI would have been positive.

This illustrates the volatility in our US GAAP reserves and AOCI that will likely occur in future periods as the discount rate fluctuates, which reinforces why we have encouraged investors to also review our statutory disclosures.

The remaining decrease to stockholders' equity as of the transition date relates to a reduction to retained earnings of $2.2 billion, primarily from LTC. This impact is largely related to a more granular assessment of LTC policy cohorts, defined on the basis of original contract issue date using best estimate assumptions.

With this new accounting guidance, we do expect more volatility in our net income. Going forward, we'll see changes in the fair value of market risk benefits related to changes in equity market performance and interest rates impact net income for our annuity products.

We could also see increased volatility from changes in our assumptions, as cash flow assumptions will be unlocked and updated, at least annually in the fourth quarter, and from fluctuations and experience.

With the adoption of LDTI, we will be representing results for full year 2021 and 2022 under the new guidance, and we expect net income to be lower in these periods, primarily related to LTC. We will provide additional details on the LDTI adoption and our 2022 Form 10-K filed later this month.

Turning to the holding company on slide 21, we ended the quarter with $307 million of cash and liquid assets above our cash target of two times annual debt service. We received $168 million of capital from an act plus $37 million in net intercompany tax payments in the quarter.

For the full year 2022, an Act returned 206 million to Genworth and will continue to be a key source of cash flows moving forward.

Given our significant debt reduction in 2022, including an additional 13 million, be purchased opportunistically in the fourth quarter, our holding company strength has continued to improve over time.

Annual debt service is expected to be approximately $60 million for 2023, and our debt outstanding is long dated.

In 2022, net intercompany tax payments to the holding company were $223 million. The parent holding company has approximately $200 million of remaining deferred tax assets, mainly foreign tax credits, that it expects to realize in the near future.

The utilization of these tax assets is dependent on the taxable income generated by our subsidiaries.

And once exhausted, we anticipate becoming a federal taxpayer.

In the fourth quarter, we also completed 30 million of share repurchases for an average price of $4.10 per share.

Through December 31st, we executed a total of 64 million of our authorized 350 million share repurchase program. As we think about our capital allocation strategy going forward, our first priority is investing in growth by bringing care and navigation support and other senior care services to market under the care scout brand.

There's a large addressable market for these services in the US and we're excited to leverage a gen worse unique strengths to capitalize on the opportunities we see in the sector.

As Tom mentioned, we'll invest approximately $30 million into launching fee-based Capitalite service offerings in 2023. Our second priority is to return capital to shareholders through opportunistic share repurchases.

We expect to generate excess cash through our ownership of an act and are well positioned to execute on these priorities given our strong liquidity position, healthy balance sheet, and sustainable debt level.

We had an excellent year in 2022 and are confident in GenWor's ability to continue to create value for shareholders.

2022 and are confident in general's ability to continue to create value for shareholders. Now let's open the lineup for questions.

Ladies and gentlemen, we will now begin the Q&A portion of the call. As a reminder, please refrain from using cell phones, speaker phones, or headsets. Press star and 1 to ask a question.

If at any time your question has already been answered or you would like to withdraw your question, please press star and 2 to be removed from the queue.

Once again, ladies and gentlemen, that is star and one if you would like to ask a question. We'll pause for a moment to give everyone a chance to signal.

We'll take our first question from the line of Joshua Esterov at credit sites. Please go ahead.

Hello Joshua, your line is open. Please check your mute function, sir. Thank you. Good morning. Appreciate that. Looks like you folks repurchased the modest amount of the 2034 senior insecurity notes. And I'm wondering if that was simply opportunistic given the opportunity to retire at a discount or

whether you have intentions to chip away at that balance over time. So now that you're within that your $1 billion total debt target, just curious about your appetite for continued debt reduction and you know whether that's the senior or the junior or what have you, just curious where your heads are at with on that subject. Thanks, Josh. Good question. I'll turn that one over to Dan.

Yeah, thanks Josh, great question. So just a reminder in terms of where our priority would be if we were to buy back debt, there are covenants that restrict us from buying the 20, well the 2066's. So our focus would be on the 2034's up and until we get that below 100 million. Outstanding.

But, you know, in terms of how we look at debt purchases today, I think our priority now that we're sitting on a fair amount of excess cash remains focused on the share buybacks. We've got the debt down below now, the level that we've set out a number of years ago, and so we're quite satisfied with the fact that we've got no debt coming due for another decade.

But like we were in this quarter, we will look opportunistically. You know, with so little debt trading at this point, or so little debt left at this point, there is limited trading. So what I would expect would be that, you know, there may be opportunities as we move forward, but they will be similar to the fourth quarter at this point.

But like we were in this quarter, we will look opportunistically. You know, with so little debt trading at this point, or so little debt left at this point, there is limited trading. So what I would expect would be that, you know, there may be opportunities as we move forward, but they will be similar to the fourth quarter at this point. Got it. Thank you very much.

Our next question comes from Ryan kuger at kbwigood morning on your LTC annual review. Can you give us a sense of to what extent you change claim inflation assumption?

We'll give that one to Brian Hannigas who runs the Legacy Business.

So, as Dan noted, we didn't make any changes to the assumptions or to our expected approvals in the future with our MyRap program, our future increase program. We do look at all our assumptions and aggregate, as I think I mentioned last time, and they look like they're holding up an aggregate, so we didn't see a need for a change.

One of the things we looked at, of course, was inflation because it made headlines, and we did not see an indication that our benefit utilization has changed dramatically. If it does in the future, I think there's a natural offset over the long term with interest rates and that will help us out.

Right, follow up on that. Yeah, can you give us any sort of metric around kind of what your claim utilization assumption is on the aggregate book? I guess as a percentage of max daily benefit or something on those lines.

Well, maybe I'll let Brian do the details if he knows, but I would say Ryan that, you know, if you go back to last year, so we did the review in the fourth quarter of 2021, we did make a number of assumption changes.

that increase the amount that a premium increase is that we needed to get through the MI-RAP. We increased the MI-RAP amount by around four billion. And a significant percentage of that was we changed the benefit utilization assumptions last year. And some view of future.

costs were part of that. So we did do, I think, a good job last year and as a result of what we did, we didn't change those. But Brian , if you want to comment on Ryan's question on sort of how we look at benefit utilization from a more

granular perspective on the percentage of where we are obviously it varies by the different product forms yeah I don't have the the details on that Orion because it's different by CITIS you know nursing home assisted living facility or Homecare, but what I will say is we've been we've been tracking how we're doing against the long term objective of reaching economic break even and We've looked been looking for a good durable measure of that that's independent of where

we're at or near economic breakeven. And so I think, yes, there are individual components that if you look at the details and only look at that component, they may move around a little bit, but when you look at it in aggregate and how they interact with each other, we've been making constant progress over time.

I would say Ryan as both Dan and I talked about today, we had an outstanding year in LTC premium annual approvals this year, $549 million, that was a very strong year, record year for us.

You know, we've been averaging more over time in the 300-350 million range. Last year was a record at a little over 400 million. Obviously the 549 is a significant addition on top of that. As I mentioned, I think Dan, in counting that, there are...

you see the percentage accomplished against the total we need being you know between seventy five and eighty percent now is because of the very strong increases we've received from regulators in the last couple of years and I would comment there are regulators on the call that listen to this and I as you can imagine right it

very challenging to ask for increases and continue to ask increases on some of the older product forms. You can see this on slide 14. We're up to over 400% cumulative increases and that's over a series of increases. So I would say we're feeling very good about beginning to get near the end.

of what we had needed to do to accomplish, and we're not there yet. And, you know, we'll likely make some assumption changes going forward that seems to be inevitable as more claims come in. But, you know, we just feel very good about where we are. And I think the regulators are encouraged. I would say 10 years ago, there were some regulators who thought, well, why bother?

because jenworth has so many challenges but and credit to all of them and i want to thank them uh... because i think they really have stepped up it's hard to grant these large increases uh... this is you know probably more premium increases done in ltc than any other industry and i think they've uh... it's been very helpful for us it's the it's the key way we manage the legacy book so

And we feel just very good about where we are. Thank you. Thanks, Ryan. And ladies and gentlemen, we'll provide another opportunity to press star and one on your telephone if you would like to ask a live question today. Star and one, ladies and gentlemen.

but the active light preserved margin remained unchanged. So it seems like there must have been some other offset. Can you help walk through that?

remained unchanged so it seems like there must have been some other offset. Can you help walk through that?

Brian , you want to handle that one? Yeah, I think what happens is, so we did make some minor refinements in assumptions. As I said, we didn't make any that were big enough to change the request going forward. But when we make those changes, sometimes they have a positive effect in terms of the value that's either already been achieved or the value that will be achieved over time. And so one of those assumptions was...

because we've seen improved behavior from regulators, that that's likely to continue, and so that's had a positive impact.

And ladies and gentlemen, I will now turn the call back over to Mr. McInerney for his additional or closing comments. Thank you very much, Jim, and thank you to all of you that joined the call today. We really appreciate. You know, in closing, we're very proud of Genworth's financial performance.

and the accomplishment of the strategic objectives we've reviewed today. And we're pleased to have entered 2023 with greater financial flexibility. We are well positioned to continue to return to capital shareholders while investing in growth in our care scout set of businesses. I would like to thank Dan again for his outstanding contributions to Genworth. Thank you.

And to also recognize our incoming CFO and CIO, Jerome Upton and Kelly Saltscabre. They were key deputies to Dan and have been key leaders that enabled us to successfully transform Genmworth and achieve our financial investment objectives. I'm highly confident that they will continue to build.

on the great progress you know it has made under Dan's leadership. Thank you for your questions, your interest and your support. And with that I'll turn things back over to Jim to close the call.

Thank you, sir. Ladies and gentlemen, this does conclude Genworth Financial's fourth quarter conference call. Thank you for your participation. At this time, the call will end.

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