Q4 2023 Genworth Financial Inc Earnings Call
Good morning, ladies and gentlemen, welcome to the gym work financials Fourthquarter 20 twenty-three earnings Conference call. My name is Jenny and I will be your coordinator today at this time all participants are in a listen only mode. We will facilitate a question and answer session towards the end of this conference.
As a reminder of the conference is being recorded for replay purposes. Also we ask that you refrain from using cellphones speakerphones, our headsets very the Q&A portion of today's call.
Now like to turn the presentation over to Brian Johnson Senior Vice President of financial planning and analysts. Please go ahead Sir.
Financial supplement can be found there and we encourage you to review these materials.
Speaking today will be Tom Mcinerney, President and Chief Executive Officer, and Jerome Upton Chief Financial Officer. Following our prepared remarks, we will open the call up for a question and answer period.
In addition to our speakers, Joe Mala Arlin, President and C. E O a R. U S life insurance business and Kelly Salt Gaper, Chief investment officer will be available to take your questions.
During the call. This morning, we may make various forward looking statements are actual results may differ materially from such statements.
We advise you to read the cautionary notes regarding forward looking statements and our earnings release and related presentation as well as the risk factors of our most recent annual report on Form 10-K is filed with the S. E C.
This morning's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors.
[noise] investor materials, non-GAAP measures have been reconciled to gap where required in accordance with S. E C rules.
Also references to statutory results are estimates due to the timing of the filing of the statutory statements.
And now I'll turn the call over to our President and C. E O. Tom Mcinerney. Thank you very much Brian Good morning, everyone and thank you for joining our fourth quarter earnings call.
Before I get to the quarter I want to welcome Jamal Arlin to her first earnings call and her official capacity as the new President and C. E O U S life insurance business.
Somalia has been with Genworth for 18 years. So he's one of the top actuaries in the L. T C insurance industry and she has been an integral leader in both the development and execution of our multiyear right action plan I'm very excited to work with her and her new and broader role I also wanted to thank Brian Hanna guess forest.
Tremendous contributions and accomplishments at Genworth as you know Brian recently retired.
Then 20 twenty-three Genworth made outstanding progress I guess about three strategic priorities, which enabled us to return significant value to our shareholders.
Before I discuss these accomplishments are quickly review our financial performance for the full year net income was 76 million or sixties 16 cents per diluted share and adjusted operating income was 41 million or nine cents per diluted share.
These results were led by enact which had an outstanding air delivering adjusted operating income of 552 million four genworth.
And that continues to execute it execute on a strategy maintaining a strong balance sheet and high quality books of insurance a force.
Also explain it it's platform and 2000 twenty-three with the launch of enact re to pursue opportunities and the mortgage insurance market.
And the fourth quarter Javelins reported a net loss of 212 million or 40 cents per diluted share and then adjusted operating loss of 230 million or 51 cents per diluted share. These results were driven by losses and both life. It annuities and then L. T C primarily due to the impact of our annual assumption.
Reviews, as well as quarterly actual to expect experience on their new L. D T I GAAP accounting standards.
The witch Jerome will discuss them more details.
On a statutory accounting basis pretax income for the U S life insurance companies was 148 million for the fourth quarter and $433 million for the full year, driven by a net benefit and variable annuities from better equity markets at a higher interest rates and in that favorable impact of assumption updates.
1.6 billion earnings pretax earnings benefits and 20 twenty-three from LTC enforce right actions and settlements were offset by higher claims as the blocks age.
Complete statutory results for a U S life insurance companies, who will be available when we follow a fourth quarter statutory statements later this month.
Enact had a very strong fourth quarter with adjusted operating income of 129 million to Genworth.
We're pleased with an axe continued strong operating performance and capital levels. Since it acts IPO Genworth has received approximately 615 million and capital from an act, including $128 million in the fourth quarter.
Cash flow, so I'm, an actor fueled our share repurchase program and our growth and Carescout.
Moving to our strategic progress we continue to further strengthen the financial and operational capabilities of our legacy L. T. C insurance business, we're achieving this primarily through our multi you're right action plan or my rap.
Most effective until we have to bring our legacy L. T C insurance portfolio to economic breakeven on a Gulf war basis, and ensure the self sustainability of the life companies two.
2023 was a very successful year for Ah My rap on a few different fronts.
First we achieved a total of 354 million in premium rate increase approvals and 20 twenty-three well above our forecast of 275 million.
In the fourth quarter premium rate increases total of 127 million from 13 states with an average percentage increase of 75%, which is one of the strongest quarterly percentage increases we've ever achieved.
We also saw significant approvals on our P. C. S. Two policies as a result of the new National Association of insurance commissioners or any of our seas process to develop a multistate actuarial review to address state inequalities.
Most importantly, and 20 twenty-three the value of our Myra progress achieved today increased by four and a half billion, which reduces the remaining amount quote currently laugh to be cheap to be achieved by one and a half billion in the past two years, we've reduced the remaining amount left to be achieved by almost four.
William.
While Jerome will discuss our 20 twenty-three averaged in more detail I wanted to note are significant progress and continued momentum on this important strategic priority.
As we've said before we manage the U S life insurance companies on a standalone basis. They operate as a closed system leveraging existing reserves and capital current premiums as well as future new premiums on the under the L. T. C. My Rep plan to cover a future claims and other obligations.
We will we will not put capital into life insurance companies and give them a long tail nature of our longterm care insurance policies with peak claim years still well over a decade or away. We also do not expect capital returns from this segment.
Our second strategic priority is to leverage generous L. T. C expertise developed new innovative aging services and solutions on this front, here's Gotta chiefs of several key milestones in 2023.
After our initial launch in Texas the <unk>.
Carescout quality network is now available in 20 states.
We continue add providers to the network that meter quality credentialing standards and that agree to newt negotiated discount rates at.
At the end of 20 twenty-three, we add 100 and twenty-five providers in the network and by the end of 2024, we anticipate we will have carescout quality network homecare coverage for approximately 600 from approximately 600 providers that will cover two thirds of the age 65, plus census population in the U S.
It also approximately two thirds over 1 million L. T C policies.
With a discounted rates negotiated we will ban the future LTC claim curve and reduce future LTC claim cost sandwich.
Yeah, I'm with policies will also be able to extend their available benefits, particularly where they have limited benefits.
We continue to forecast claims savings and Genworth LTC claim cost overtime of between one to one and a half billion on a net present value basis, driving further risk mitigation for the legacy L. T C block.
In addition, we've been focused on building the foundation necessary to re enter the longterm care insurance business with with new funding solutions in 2024 through our new subsidiary Carescout insurance, we are focused on product development and pricing.
F. A K identification of highly of a highly rated reinsurance partner.
Regulatory engagement and operational readiness as we prepare to launch new L. T C insurance products later in 2024.
Moving to our third strategic priority, we continue to allocate excess cash from enact to drive generous longterm shareholder value.
We returned significant capital to shareholders via share repurchases in 20, twenty-three and we remain committed to the execution of a buyback program.
In July of last year, the Jan with board authorized an additional 350 million in share repurchases significantly expanding our original share repurchase alteration, which we first announced in may of 2022.
This step was reflective of the transformative progress we've made as a company in recent years are strong progress on buybacks and the board's confidence in our strategy in in our future.
Since the initial authorization in May 20th 22, we have repurchased a total of approximately $384 million worth of shares at an average price of 533 per share as of February 13th and reduced outstanding shares by 13% from approximately.
511 million shares to 443 million shares outstanding.
We also invested approximately 30 million and Carescout services and 20 twenty-three in line with our guard guidance, we plan to invest in additional approximately 35 million and 2024 as we build out the Carescout quality network, we will continue to prudently scale and diversify carescout services in a way.
[noise] that we leverage our intellectual property successfully successfully drive claim savings for Jan worth life insurance company, and and Blip day and.
And introduce new offerings insurance offerings to the market and drive longterm growth.
Or 20 twenty-three achievements have improved genworth financial strength ever.
Evidenced by our ratings upgrades from both Moody's and S&P and allowed us to enter 2024 with greater financial flexibility and continued confidence in our long term strategy to invest in growth primarily through Carescout and continue returning capital to our shareholders.
And with that I'll turn the call over to Jerome.
Thank you Tom and good morning, everyone.
We completed our annual L. T C and life insurance assumption reviews in the fourth quarter under the New U S. GAAP accounting standard L. D T I.
While our U S. GAAP earnings were pressured by these assumption updates I'm very pleased with Genworth strategic progress in 20 twenty-three.
The ongoing value creation delivered by an act and our strong momentum on L. T. C. Enforce right actions, which helped drive positive statutory income and R. U S life companies for the year.
I'll discuss Jen worse results in drivers in more detail, including enact performance and the results of our assumption reviews.
Then I'll provide an update on our investment portfolio and capital position before we opened the call for Q&A.
Tom covered Arkansas related financial results, So I'll start with an axe performance on slide six.
Enact delivered very strong fourth quarter, and full year results, including high quality growth and it's insured portfolio.
Increasing investment income and strong profitability.
And acts adjusted operating income of 129 million was up 8% versus the prior year.
[noise] primary insurance enforce increased 6% year over year to a record 263 billion driven by new insurance written and continued elevated persistency.
[noise] genworth share of an axe book value, including a O C. I has increased from 3.4 billion at the end of 2022 to 3.8 billion at the end of 20 twenty-three while at the same time enact as delivered significant dividends to genworth.
The business continues to operate from a position of strength and has had strong loss performance, which has allowed it to release excess reserves.
As shown on slide seven enact had a favorable 53 million reserve release in the fourth quarter, which drove the loss ratio of 10%.
The reserve released primarily reflects favourable cure performance on 2022 and earlier delinquencies.
Both enact prior quarter and prior year results included favorable net reserve releases as well totalling.
Totalling 55 million and 42 million respectively.
Enact has a strong estimated P Meyer sufficiency ratio of 161% Approx.
Approximately 1.9 billion above P Myers requirements.
And that continues to deliver strong cash flows to genworth the.
The combination of enact quarterly dividend, it's special dividend and its share repurchase program generated a total of 128 million and proceeds to genworth in the fourth quarter.
For the full year 20, twenty-three Genworth received 245 million from enact which enabled us to a dance genworth strategic initiatives and capital returned program.
In 2024 enact has stated that it expects its total capital return will be similar to what it delivered in 2023.
Turning to long term care insurance, starting on slide eight we continue to significantly reduce the tail risk on our legacy L. T C block with progress on our multiyear right action plan or my rap and legal settlements.
As of the end of 20 twenty-three we have achieved enforce right actions worth approximately 28 billion on a net present value basis since 2012 and.
And I've seen a cumulative policyholder response rate of 51% to reduce benefits.
As Tom mentioned the year over year increase in the economic value of our right actions achieved to date is significant.
As shown on slide nine this 28 billion reflects 4.5 billion in growth from last year.
2 billion of the increase is attributable to our 20 twenty-three right action approvals and settlement implementations.
The benefit reductions associated with these actions not only provides stability to our financials and the period implemented.
But also continue to provide risk resiliency going forward is two blocks reach peak claim years, helping to protect against any potential deterioration in the future.
As such the value of the benefit reductions connected with our previously achieved right actions and settlements also increased by an additional 2.5 billion in 2000 twenty-three from the impact of our assumption updates and ongoing risk reduction measures.
The remaining amount. We currently have left to achieve is approximately 5 billion, which has decreased approximately 1.5 billion from this time last year.
Or achieve value reflects progress of 84% toward our latest estimate of approximately 33 billion for the total net present value of premium increases and benefit reductions contemplated and our my rap.
[noise] slides 10, and 11 shed more details on the filings approved in recent quarters as well as the positive trend we've seen in policyholder benefit reduction elections, both of which demonstrate to progress we're making on our strategy.
In addition to the my rap recent legal settlements have further reduced risk associated with our legacy L. T C book.
In connection with these settlements many policyholders are elected to reduce their benefits in order to reduce or eliminate their premiums which allows them to maintain meaningful coverage, while reducing genworth tail risk on these policies and further protecting our ability to pay claims.
The P. C S. One and two settlement was materially completed as of the end of the quarter.
The third and final settlement on our large choice to block will continue throughout most of 2024 and will further reduce risk through benefit reduction options.
[noise] longterm care insurance GAAP results are covered on slide 12.
R. L. T C segment reported and adjusted operating loss of 151 million in the fourth quarter.
Compared to an adjusted operating loss of $71 million in the prior quarter and adjusted operating income of $204 million in the prior year.
In the fourth quarter L. T C had a liability remeasurement pretax loss of 188 million, including a 127 million loss on actual too expected experience principally on our cat cohorts the.
He experienced during the quarter was related to hire claims and unfavorable timing impacts of the P. C. S. One and two legal settlement.
Despite the quarterly variation inexperience as I noted. This settlement is now materially complete and has been very favorable to genworth on a cumulative basis.
For the full year 2023.
Though this quarterly average represented less than half a percent of our total liability for future policy benefits of approximately 42 billion. We expect volatility at this average level could continue particularly for a cat cohorts and believed this could be a main driver of our quarterly earnings pressure for L. T C and 22.
24.
This potential impact will vary based on actual experience and seasonal trends.
Importantly, the quarterly U S gap fluctuations do not impact cash flows are long term economics or the way we manage the L. T C business.
We continue to primarily manage the L. T C business by seeking to maximize net present value economics under the my rap.
As I mentioned this is the first quarter that we're reporting [noise] longterm assumption updates for U S gap under the new L. D T I accounting standard <unk>.
As a reminder, we no longer perform loss recognition testing for a L. T C active life reserves.
L. T C assumptions are now reflected at best estimate with any changes recorded through our income statement.
L T C assumption updates in the fourth quarter resulted in an additional 61 million pretax remeasurement laws in L. T C. As shown on slide 13, compared to a 303 million remeasurement gain in the fourth quarter of 2022.
The gain in 20 twenty-two was largely related to the P. C. S. One and two legal settlement, which primarily impacted cat cohorts. We made a similar assumption update to reflect the positive impact of the choice to legal settlement in the fourth quarter. However.
However, the P&L impact was muted because this settlement primarily impacted uncapped cohorts.
The assumption changes implemented better aligned near term projections with our recent experience for cost of care mortality incidents and lapses for our healthy lives, which had a net unfavourable impact in the fourth quarter.
We also updated are disabled life mortality assumption to reflect continued favorable expectations over the next few years as we emerged from Covid.
Based on favorable recent rate increase approval experience and feedback from regulators, we have updated our assumption for future approvals and benefit reductions to reflect additional future value.
This assumption update demonstrates our confidence in expectation of.
Unlike the gap earnings impact, resulting from L. D T I.
Updates to best estimate assumptions for L. T. C. Healthy lives are reflected in casually testing margin on a statutory basis. However.
However, assumption updates for disabled life reserves are reflected in statutory income similar to gap.
I will now turn to our life and annuity segment GAAP results on slide 14.
The segment report it and adjusted operating loss of 183 million driven by an adjusted operating loss in life insurance or 206 million.
Partially offset by adjusted operating income of 9 million from fixed annuities and 14 million from variable annuities.
And life insurance results were primarily driven by unfavourable long term assumption updates, which had a pretax impact of 226 million.
Mortality was also unfavorable compared to the prior quarter and prior year. The Doc amortization expense was slightly lower than the prior year due to lower lapses and block runoff.
Unlike L T C, which is split approximately 50 50 between cat and uncapped cohorts currently the term life insurance business is primarily an uncapped cohorts, which mutes the impact of the actual too expected experience.
Fixed annuities results were down versus the prior quarter due to a less favorable fixed payout annuity mortality and down versus the prior year from lower net spreads.
Variable annuities, we're up versus the prior quarter, an prior year due to the favorable impact from assumption updates in the fourth quarter.
As shown on slide 15 that 226 million life assumption impact primarily reflected unfavorable updates to persistence he assumptions for certain universal life products was secondary guarantees or U L. S. G.
An unfavorable mortality updates, including more modest mortality improvement in term and you L products.
These updates are similar to those made by other insurers. However at approximately 4 billion R. U L. S. G block is relatively small compared to others in the industry.
And as a closed block that has not issued new business since 2016, [noise], leading to a smaller relative impact.
The impact also reflects an expectation that mortality across all of our life products will remain elevated in the short term as we emerge from the pandemic.
[noise] assumptions for Universal life and term Universal life, we're always on a best estimate basis with changes recorded through income as was the case under the old accounting guidance and now under L. D. T. I assumption updates to our term life insurance business also impact income instead of loss recognition testing origin.
Under GAAP accounting these liability assumption updates were only partially offset by a favorable update and R. U L products for the current interest rate environment.
However, statutory updates in life, where net favorable due to a significant increase in the regulatory prescribed reinvestment rate in R. U L. S G products, which more than offset the other liability assumption changes.
Note that for both life and L. T C. R assumptions do not reflect any potential long term impacts from COVID-19 as we continue to monitor emerging experience.
Rounding out the fourth quarter GAAP results corporate and other reported and adjusted operating loss of 25 million up from 18 million in the prior quarter, reflecting growth investments and Carescout and taxes.
Turning now to our statutory results for our U S life insurance companies, which we believe better represents their underlying performance and our primary focus in managing these companies.
Slide 16 illustrates the continued benefit the enforce right actions in legal settlements have on our L. T. C business is shown through the 1.6 billion benefit the statutory income on a pretax basis recognized ear to date.
Overall statutory earnings and L. T C, where 79 million and 20 twenty-three down from the 257 million during 20 twenty-two.
Primarily due to higher claims as to block ages and block runoff, which is partially offset by larger impacts from enforce right actions and legal settlements.
Slide 17 shows that paid claims are increasing as the blocks age and pandemic trends subside.
[noise] pay claims will continue to increase as P claim years on our largest blocks choice, one and choice to our over a decade away.
This trend is expected and incorporated in our long term assumptions and reserve methodology.
We will continue to monitor new claims growth and benefit utilization trends.
Slight 18 shows our fourth quarter total pretax statutory income for the U S life insurance companies of $148 million.
This is driven primarily by variable annuities from the net favorable impact of equity market and interest rate movements in the quarter.
As well as net favorable impacts from assumption updates and the quarter primarily in life insurance.
L. T C had a 467 million pretax benefit from enforce right actions and legal settlements, but this was largely offset by higher claims as to block ages.
The consolidated risk based capital ratio for Genworth life insurance company or Glogg.
Was 303% at the end of the year compared to 291% in the prior year.
[noise] glitch consolidated balance sheet remain sound with capital and surplus as of the end of the year of 3.4 billion.
[noise] casually testing margin in our life insurance companies remain positive at the end of the year.
With Glitched margin ending within the point 5 billion to 1 billion range. After the assumption updates our final statutory results will be available on our industrial website with our annual statement filings later this month.
Moving to our investment portfolio, which is summarized on slide 19, we remain confident in our positioning and believe we have the right strategy given the products in our portfolio and the duration of our liabilities.
As a reminder, the majority of our assets are in investment grade six maturity said, we generally buy and hold to support the U S life insurance company's liabilities.
With unrealized gains and losses impacting equity through changes in other comprehensive income [noise].
Because of liabilities are very long duration, especially for L. T. C. We have very limited liquidity risk.
The portfolio continues to benefit from the high interest rate environment.
New money is currently being invested between 5.75 and 6% <unk>.
Excluding alternative investments, which have targeted returns of approximately 12%.
The current attractive new money rates will benefit the portfolio over time.
Our net investment income reflects both solid base portfolio performance and strong returns and our alternative assets program, which is comprised mainly of diversified private equity.
Next turning to the holding company on Slide 20, we continued to return capital to shareholders via share repurchases in the fourth quarter repurchasing 35 million at an average price of $5.90 per share and another 25 million through February 13th.
We received 128 million of capital from enact and 64 million from intercompany tax payments in the fourth quarter.
We ended the year with 350 million of cash and liquid assets.
For the full year, we received a total of 234 million of net intercompany tax payments.
Tom reviewed our capital allocation strategy and I'll reiterate that our top priorities remain to invest in longterm growth through Carescout services.
Return cash to shareholders through our share repurchase program when our share prices below intrinsic value.
And opportunistically pay down debt when attractive to us.
We're very pleased with the value created for shareholders through our share repurchase program.
And 20 twenty-three we fully completed the initial 350 million program that began in May 2022.
We have an additional $316 million remaining under our current authorization as of February 13th.
And in 2024, we expect to allocate roughly 125 to 150 million to share repurchases.
This range could be higher or lower depending on our cash position share price and market condition.
And is lower than the amount, we repurchased 20 twenty-three given that we have fully utilized our tax assets.
Also in 20 twenty-three, we completed a successful consent solicitation from bondholders, representing the majority in principle amount of our senior notes do and 2034.
This transaction amended a restrictive covenant that limited our ability to repurchase our twenties sixty-six subordinated notes.
We now have greater Optionality do opportunistically buyback holding company that when it's attractive relative there are other uses of capital.
In the fourth quarter, we repurchased $21 million of debt, reducing our total holding company that to 856 million.
After achieving our target that level and 20 twenty-two we strive to maintain a debt capital ratio of twenty-five percent or below attributing no equity value two L. P C life and annuities.
As of year end, our debt to capital ratio was strong and below this target.
In closing, we're delivering on our strategic priorities, while proactively managing are liabilities and risk the multiyear right action plan and the additional benefit from the three L. T. C. Legal settlements are enhancing our ability to honor policyholder commitments and further stabilize the legacy L. T C block.
[noise] and act as a strong driver of shareholder value as evidenced by its stable earnings increasing book value and capital returns.
Looking ahead, we will continue to focus on delivering sustainable long term growth through carescout, while returning meaningful value to shareholders through share repurchases.
Now, let's open up the line for questions.
Thank you.
Question. Please.
Dar one on your telephone keypad.
Speakerphone. Please make sure your mute function is turned off to allow your signal to reach our equipment again.
To ask a question.
Question is gonna come from Brian Cooper.
B W. Please go ahead.
Hey, good morning, I had a few questions on longterm care. The first one was on <unk>. I believe you you said you expected one to one and a half billion of present value of claim savings related daycare scout overtime.
I guess first I just wanted to understand did you already assume that in your reserve projections or is that something that you would.
Uhm, a possibility that you have that reflected yet.
So as we get more more information on you know how many are using the quality network versus another provider and how big the discounts. Our you know our goals are to be the discounts between 10 and 20%. So far. We're you know we're able to achieve discounts at the higher end of that range. So.
So as we gain more experience at some point will view it is statistically significant and at that point, you'll you'll see us assume that and that would reduce the.
The amount of premium increases that we need in the future by that amount. So to your question. It's it's what we project, but it's we have a factor it into and assumed in our projections the value of it yet.
Understood and then secondly.
I guess wanted to understand it if you get to a point of economic breakeven on longterm care.
Obviously that you Wanna you Wanna be in that place, but but is there what are the broader implications for for January at once once you get to that.
To that place.
Well at Great question. So it's been you know about a long term effort and we've achieved.
We're very pleased with the results of adding to.
28 billion to the economics of the business, we think by the end of 2026 that will be a largely breakeven self sustainability and at that point I would say in most states. So let's say 35 40 states will be done with premium increases.
[noise] as we've said before over over the quarters Ryan as you know there are a number of states who are well below average I I do think in those states even beyond 2026 will continue to pursue right.
Great increases until we get that those stays to the average of of all the states.
Thanks, and then just one last one you've obviously made a lot of progress on achieving right actions, but I think if you look back over time.
<unk> your either your loss recognition testing margin or your cash flow testing margin is it remained about the same despite a very high level of of achieved rate increases and benefit reductions, which implies a similar level of adverse reserve development from assumption updates over that same period.
<unk> I guess, what what gives you the confidence that you know.
<unk> once you achieve these rate increases you you won't have no further offsets from from negative reserve adjustment.
Yeah. Another great question, and then there's a lot of better than that I I would say that you know we've we've now paid 360000 claims and 26 billion of value of claims and if you look at that one slide it shows the claims we've actually paid in the last so many years so.
So and every year, we look at the new claims get added to the total claims and based on those we determine whether there are any of our longterm assumptions that may be the change. So you know my view as we're getting near the end I I think if you look at that there's another slide that shows what the.
Net present value total that we're looking to achieve to get to that breakeven is 33.3 billion and we've achieved 28 billion today.
That 33.3 could could go up up potentially could go down over time, and so I I think while there there are likely are some assumptions that will based on new claims we might change I you know I think based on 10 or 11 years of looking at it I think we're we're getting near the.
So I don't think there's a lot left the other way we sort of look at things, we think where 85% of the way to being at breakeven or sustainability.
Tom could I, just yeah Ah one comment for for Ryan to consider and that is R. Block has gone through measurable settlement activity.
And it provides risk resiliency to the block overall through the actions that had been taken the selections that have been made by the policyholder [noise]. So as should we see adverse development there those.
Reductions that have occurred through the Saddam it will add meaningful value to us and and really cuts off tail risk for the block.
Agree with that appointment.
[noise] anything you have to actually get the answers.
Thank you for the introduction at the beginning Tom and thank you for the good questions Ryan I reiterate what Andre him added in terms of the resiliency of the benefit reductions in settlement.
Adding additional support as we think about how.
The development of adverse assumptions in the future.
Thanks to Mel Thank you anything outside.
I think that was it I appreciate the answers.
Alright, thanks, so much thanks for your questions.
And once again, if you'd like to ask a question.
One our next question is gonna come from Christopher Bolton.
Please go ahead.
Hello, What did you ask do I have a question.
Christopher.
Oh, Thank you and listening to the call you mentioned that <unk>.
Risk based capital ratio is 330 303 per cent.
Could you give a risk space capital ratio for <unk>.
We did we did not but jamila or Jerome you. We have that number if you want to get it.
Yeah, Chris.
Chris we have not provided that number, but it's north of 400% and.
It's gone up throughout the course of 2023, we've had a particularly good results on the variable annuity block given the equity market conditions. So [noise], it's north of 400 per cent.
Christopher.
Just to follow up on that and.
Genworth life insurance and annuity company, Eric lag there, there's very little very little if any L. T. C policies, it's mostly a life and annuity company. So it's R. B C is is significantly better because it hasn't had that.
The statutory losses of the past that we had in the LTC companies, Chris I Wanna add I'm Gonna add one thing all of our statutory filings will be coming soon so you you will be able to access and see.
The metrics in specific detail.
Well, thank you for your questions.
Well I have one more question.
Go ahead.
And do you have <unk> strong risk based capital ratio and I would say 400 per cent and if you could they characterize as strong when do you think why do you feel that and <unk> <unk>, giving <unk> a a fair best training.
Yeah look I I would say, we we don't always agree with the rating agencies I think <unk> is a very strong company.
You know I think any RBC ratio really about 350.
Is usually deemed to be strong investment grade, but but I think christopher the the rating agencies. So am bass.
Probably SMP Moody's because we've said that we're not gonna put any more shareholder capital.
Into the life companies and that's all three that there are closed system. They operate on their own I I think and therefore I will rely on premium rate increases.
I think the rating agencies have based their rating on that and so yeah. We're disappointed we think they should be higher but now that's where they are but it's a good question.
Alright. Thank you for your for Great information I appreciate it.
[noise]. Thank you.
Yeah. Once again, if you have a question please press.
Or a line.
And.
For one final question.
Yep.
One.
Again.
Wow.
<unk>.
Okay, we have one more question.
Arthur.
Okay.
Please go ahead.
Good morning. Thank you very much for the call. My question refers to the bottom of slide number 20 of your presentation, you talk about the share repurchases as well as the repurchase the 21 billion of principle of 2034 and your 2006.
<unk> six final maturity subs.
I'm wondering if you can share any plans to continue to repurchase both of these bonds going forward.
And if you could also provide some detail in terms of the proportionality of that 21 million bought back Ah broken down between the 2034 in 2066 out. Thank you so much.
[noise], Thank Arthur I'll I'll start out and then turn it over Jerome R. C. F O to give you more details but.
But we negotiated and 20 twenty-three you know a very good.
Adjustment to the bond offering so prior to a consent from bondholders, we couldn't really repurchase the 20th 60, six's, which have traded well below par.
And the last several years. So we we agreed with them in exchange for repurchasing some of the 30 fours going forward for every dollar of.
2034 that that we we purchase [noise], we can buy $2 of the 20th 66 [noise].
That and because both are traded below par, but particularly or the 20th 60 Six's [noise]. We we have then.
Opportunistically repurchasing that our priority is still.
To focus more on repurchasing shares these that's a better economic return.
For our stakeholders shareholders in particular, but will continue to do up opportunistic of that so we did a reasonable my own and and twenty-three and Jerome I'll ask for them to give you the specific numbers, but going forward. I think you you can expect repurchase is sort of in that range.
Going for but Jerome you Wanna give an update on the specific yeah. Arthur Thank you for the question where.
Please with a modification of the replacement capital Covenant.
And I would say in in the 21 million that you highlight on slide 20. The majority of that was a 2030 fours that was part of what we agreed too [noise].
As part of the consent and there was a smaller piece of the 20th 60 sixes.
And I would just say.
As you think about adding shareholder value.
Three with Tom our focus is going to be on share buybacks as you think about.
Economic value, we just feel very good about where where buying I think you've seen the ever to date results on our share repurchase program, which is just a little above five.
And we're very pleased with that so we'll continue to allocate and focus on share buybacks at at pricing levels set that we've highlighted will continue to be opportunistic but proportionately.
You know we're at a good place from elaborate perspective were well below our target right now and you'll see the preponderance of our capital allocation going to share buybacks.
[noise] got it. Thank you so very much for clarifying that much appreciate it yep. Thank you yep. Thanks, Arthur Thanks for your questions.
So Jenny back to you I think I think it looks like that's all the questions. We have but if you can confirm that and then I'll just wrap up.
Okay.
Oh man.
There are no further questions.
Call back over.
Mister.
Please.
Closing comment.
Thank you very much any and thanks to everybody on the call. Thanks to Ryan Christopher and Arthur for your Great questions. I think they were very good ones that hopefully we gave you a good responses.
But in closing just to sum up we're very pleased with an axe wrong performance, we're very pleased with the the.
Move for we've made with our my rap getting to 28 billion of net present value achieved we're pleased with the progress in Carescout Ah, particularly with building the quality care network, you know now to 125 providers.
Are credentialed have been approved for quality and or or bending the cost curve by negotiating the discounts and no. Other L. T C insurers I've ever really tried to do that so are the first one the health insurers had have had a lot of success at that over time. So we're pleased with that.
As I said, we we hope by the end of the year to have 600 providers that are credentialed in our network and if we get to that level will have two thirds of our policyholders and two thirds of across the country of 65 year olds covered by a quality care network.
Provide our home care provider in their in their ZIP code and then finally will continue.
To focus on share repurchases.
As I said as we said to Arthur Opportunistically, well, we'll look to buy back a little bit of that.
But we've had we've we've added value Ah Ah hopefully shareholders are pleased with the improvement in our share price over the last couple of years and we look to continue to do that and in the end you know through care Scott. Our goal is to long term increases increased value.
By expanding our longterm care services and.
An insurance business through Carescout in helping many more families navigate the very challenging aging journey that they face with confidence so [noise]. Thank.
You all all of the investors and others, who are your interest and support of Genworth in your investment in our company and we'll see you next quarter and with that journey will end the call.
Ladies and gentlemen, this concludes.
Financial fourth quarter conference call.
At this time.
[music].