GENWORTH FINANCIAL INC - FORM 8-K - EX-99.2

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EX-99.1 - EX-99.1 - GENWORTH FINANCIAL INC	d20255dex991.htm
8-K - 8-K - GENWORTH FINANCIAL INC	d20255d8k.htm

Exhibit 99.2

LOGO

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020


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

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

*Quarterly Results by Business*
Adjusted Operating Income (Loss) and Sales - U.S. Mortgage Insurance Segment		16-22
Adjusted Operating Income and Sales - Australia Mortgage Insurance Segment		24-27
Adjusted Operating Income (Loss) - U.S. Life Insurance Segment		29-32
Adjusted Operating Income (Loss) - Runoff Segment		34
Adjusted Operating Loss - Corporate and Other Activities		36

*Additional Financial Data*
Investments Summary		38
Fixed Maturity Securities Summary		39
General Account U.S. GAAP Net Investment Income Yields		40
Net Investment Gains (Losses), Net - Detail		41

*Reconciliations of Non-GAAP Measures*
Reconciliation of Operating Return On Equity (ROE)		43
Reconciliation of Reported Yield to Core Yield		44

*Corporate Information*
Financial Strength Ratings.		46

Note:

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Dear Investor,

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

Regards,

Investor Relations

InvestorInfo@genworth.com

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Use of Non-GAAP Measures

This financial supplement includes the non-GAAP financial measures entitled “adjusted operating income (loss)” and “adjusted operating income (loss) per share.” Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The chief operating decision maker evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The company defines adjusted operating income (loss) as income (loss) from continuing operations excluding the after-tax effects of income (loss) from continuing operations attributable to noncontrolling interests, net investment gains (losses), goodwill impairments, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, gains (losses) on insurance block transactions, restructuring costs and infrequent or unusual non-operating items. Gains (losses) on insurance block transactions are defined as gains (losses) on the early extinguishment of non-recourse funding obligations, early termination fees for other financing restructuring and/or resulting gains (losses) on reinsurance restructuring for certain blocks of business. The company excludes net investment gains (losses) and infrequent or unusual non-operating items because the company does not consider them to be related to the operating performance of the company’s segments and Corporate and Other activities. A component of the company’s net investment gains (losses) is the result of estimated future credit losses, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to the company’s discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Goodwill impairments, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, gains (losses) on insurance block transactions and restructuring costs are also excluded from adjusted operating income (loss) because, in the company’s opinion, they are not indicative of overall operating trends. Infrequent or unusual non-operating items are also excluded from adjusted operating income (loss) if, in the company’s opinion, they are not indicative of overall operating trends.

While some of these items may be significant components of net income (loss) available to Genworth Financial, Inc.’s common stockholders in accordance with U.S. GAAP, the company believes that adjusted operating income (loss) and measures that are derived from or incorporate adjusted operating income (loss), including adjusted operating income (loss) per share on a basic and diluted basis, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses adjusted operating income (loss) as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. However, the items excluded from adjusted operating income (loss) have occurred in the past and could, and in some cases will, recur in the future. Adjusted operating income (loss) and adjusted operating income (loss) per share on a basic and diluted basis are not substitutes for net income (loss) available to Genworth Financial, Inc.’s common stockholders or net income (loss) available to Genworth Financial, Inc.’s common stockholders per share on a basic and diluted basis determined in accordance with U.S. GAAP. In addition, the company’s definition of adjusted operating income (loss) may differ from the definitions used by other companies.

Adjustments to reconcile net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) assume a 21% tax rate for the company’s domestic segments and a 30% tax rate for its Australia Mortgage Insurance segment and are net of the portion attributable to noncontrolling interests. Net investment gains (losses) are also adjusted for DAC and other intangible amortization and certain benefit reserves (see page 41).

In the second quarter of 2020, the company recorded a goodwill impairment of $3 million, net of the portion attributable to noncontrolling interests, in its Australia mortgage insurance business.

During the second and first quarters of 2020, the company repurchased $52 million and $14 million, respectively, principal amount of Genworth Holdings, Inc.’s (Genworth Holdings) senior notes with 2021 maturity dates for a pre-tax gain of $3 million and $1 million, respectively. In January 2020, the company paid a pre-tax make-whole expense of $9 million related to the early redemption of Genworth Holdings’ senior notes originally scheduled to mature in June 2020 and Rivermont Life Insurance Company I, the company’s indirect wholly-owned special purpose consolidated captive insurance subsidiary, early redeemed all of its $315 million outstanding non-recourse funding obligations originally due in 2050 resulting in a pre-tax loss of $4 million from the write-off of deferred borrowing costs. These transactions were excluded from adjusted operating income (loss) as they relate to gains (losses) on the early extinguishment of debt.

The company recorded a pre-tax expense of $1 million in both the second and first quarters of 2020 and $4 million in the first quarter of 2019 related to restructuring costs as it continues to evaluate and appropriately size its organizational needs and expenses. There were no infrequent or unusual items excluded from adjusted operating income (loss) during the periods presented.

The table on page 9 of this financial supplement provides a reconciliation of net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting. This financial supplement includes other non-GAAP measures management believes enhances the understanding and comparability of performance by highlighting underlying business activity and profitability drivers. These additional non-GAAP measures are on pages 43 and 44 of this financial supplement.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Results of Operations and Selected Operating Performance Measures

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

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

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

This financial supplement contains selected operating performance measures including “sales” and “insurance in-force” or “risk in-force” which are commonly used in the insurance industry as measures of operating performance.

Management regularly monitors and reports sales metrics as a measure of volume of new business generated in a period. Sales refer to new insurance written for mortgage insurance products. The company considers new insurance written to be a measure of the company’s operating performance because it represents a measure of new sales of insurance policies during a specified period, rather than a measure of the company’s revenues or profitability during that period.

Management regularly monitors and reports insurance in-force and risk in-force. Insurance in-force for the company’s mortgage insurance businesses is a measure of the aggregate original loan balance for outstanding insurance policies as of the respective reporting date. Risk in-force for the company’s U.S. mortgage insurance business is based on the coverage percentage applied to the estimated current outstanding loan balance. Risk in-force in the Australia mortgage insurance business is computed using an “effective” risk in-force amount, which recognizes that the loss on any particular loan will be reduced by the net proceeds received upon sale of the property. Effective risk in-force has been calculated by applying to insurance in-force a factor of 35% that represents the highest expected average per-claim payment for any one underwriting year over the life of the company’s mortgage insurance business in Australia. The company also has certain risk share arrangements in Australia where it provides pro-rata coverage of certain loans rather than 100% coverage. As a result, for loans with these risk share arrangements, the applicable pro-rata coverage amount provided is used when applying the factor. The company considers insurance in-force and risk in-force to be measures of its operating performance because they represent measures of the size of its business at a specific date which will generate revenues and profits in a future period, rather than measures of its revenues or profitability during that period.

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

These operating performance measures enable the company to compare its operating performance across periods without regard to revenues or profitability related to policies or contracts sold in prior periods or from investments or other sources.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Financial Highlights

(amounts in millions, except per share data)


Balance Sheet Data	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Total Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income	$	10,615		$	10,196		$	10,634		$	10,752		$	10,765
Total accumulated other comprehensive income		4,141			4,447			3,815			3,433			3,622

Total Genworth Financial, Inc.’s stockholders’ equity	$	14,756		$	14,643		$	14,449		$	14,185		$	14,387

Book value per share	$	29.19		$	28.96		$	28.61		$	28.17		$	28.57
Book value per share, excluding accumulated other comprehensive income	$	20.99		$	20.17		$	21.05		$	21.35		$	21.38
Common shares outstanding as of the balance sheet date		505.6			505.6			505.1			503.5			503.5

	Twelve months ended
Twelve Month Rolling Average ROE	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
U.S. GAAP Basis ROE		(1.0)	%		(4.8)	%		1.0	%		3.2	%		0.3	%
Operating ROE⁽¹⁾		1.6	%		1.5	%		3.3	%		3.9	%		0.9	%

	Three months ended
Quarterly Average ROE	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
U.S. GAAP Basis ROE		15.7	%		(16.9	)%		(2.5)	%		(0.6)	%		0.7	%
Operating ROE⁽¹⁾		5.0	%		(0.8	)%		1.2	%		0.9	%		4.6	%


Basic and Diluted Shares	Three months ended September 30, 2020		Nine months ended September 30, 2020
Weighted-average common shares used in basic earnings per share calculations		505.6		505.1
Potentially dilutive securities:
Stock options, restricted stock units and stock appreciation rights		5.9		6.1

Weighted-average common shares used in diluted earnings per share calculations		511.5		511.2

⁽¹⁾	See page 43 herein for a reconciliation of U.S. GAAP Basis ROE to Operating ROE.

Consolidated Quarterly Results

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Consolidated Net Income (Loss) by Quarter

(amounts in millions, except per share amounts)


	2020											2019
	3Q		2Q			1Q			Total			4Q			3Q			2Q			1Q		Total
REVENUES:
Premiums	$	1,034	$	1,019		$	1,015		$	3,068		$	1,033		$	1,015		$	1,001		$	988	$	4,037
Net investment income		827		786			793			2,406			794			816			816			794		3,220
Net investment gains (losses)		375		159			(152	)		382			23			(2	)		(46	)		75		50
Policy fees and other income		184		174			181			539			188			191			223			187		789

Total revenues		2,420		2,138			1,837			6,395			2,038			2,020			1,994			2,044		8,096

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		1,299		1,486			1,361			4,146			1,346			1,284			1,251			1,282		5,163
Interest credited		137		139			141			417			138			146			146			147		577
Acquisition and operating expenses, net of deferrals		249		223			249			721			249			247			229			237		962
Amortization of deferred acquisition costs and intangibles		101		93			116			310			164			112			84			81		441
Goodwill impairment		—		5			—			5			—			—			—			—		—
Interest expense		49		44			52			145			60			59			60			60		239

Total benefits and expenses		1,835		1,990			1,919			5,744			1,957			1,848			1,770			1,807		7,382

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		585		148			(82	)		651			81			172			224			237		714
Provision (benefit) for income taxes		150		46			(10	)		186			26			34			66			69		195

INCOME (LOSS) FROM CONTINUING OPERATIONS		435		102			(72	)		465			55			138			158			168		519
Income (loss) from discontinued operations, net of taxes⁽¹⁾		1		(520	)		—			(519	)		(31	)		(80	)		60			62		11

NET INCOME (LOSS)		436		(418	)		(72	)		(54	)		24			58			218			230		530
Less: net income (loss) from continuing operations attributable to noncontrolling interests		18		23			(6	)		35			19			10			15			20		64
Less: net income from discontinued operations attributable to noncontrolling interests		—		—			—			—			22			30			35			36		123

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS	$	418	$	(441	)	$	(66	)	$	(89	)	$	(17	)	$	18		$	168		$	174	$	343

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Income (loss) from continuing operations available to Genworth Financial, Inc.’s common stockholders	$	417	$	79		$	(66	)	$	430		$	36		$	128		$	143		$	148	$	455
Income (loss) from discontinued operations available to Genworth Financial, Inc.’s common stockholders		1		(520	)		—			(519	)		(53	)		(110	)		25			26		(112	)

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS	$	418	$	(441	)	$	(66	)	$	(89	)	$	(17	)	$	18		$	168		$	174	$	343


Earnings (Loss) Per Share Data:
Income (loss) from continuing operations available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.83	$	0.16		$	(0.13	)	$	0.85		$	0.07		$	0.25		$	0.29		$	0.29	$	0.90
Diluted	$	0.82	$	0.15		$	(0.13	)	$	0.84		$	0.07		$	0.25		$	0.28		$	0.29	$	0.89
Net income (loss) available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.83	$	(0.87	)	$	(0.13	)	$	(0.18	)	$	(0.03	)	$	0.04		$	0.33		$	0.35	$	0.68
Diluted	$	0.82	$	(0.86	)	$	(0.13	)	$	(0.17	)	$	(0.03	)	$	0.04		$	0.33		$	0.34	$	0.67
Weighted-average common shares outstanding
Basic		505.6		505.4			504.3			505.1			503.5			503.5			503.4			501.2		502.9
Diluted⁽²⁾		511.5		512.5			504.3			511.2			510.4			511.2			508.7			508.6		509.7

⁽¹⁾

Income (loss) from discontinued operations relates to the company’s former Canada mortgage insurance business that was sold on December 12, 2019 and its former lifestyle protection insurance business that was sold on December 1, 2015. During the third quarter of 2020, based on an updated estimate, the company reduced a liability associated with underwriting losses on a product sold by a distributor in the company’s former lifestyle protection insurance business which resulted in a benefit of $23 million. In addition, during the third quarter of 2020, the company recognized a loss of $22 million attributable to changes in foreign exchange rates on balances owed to AXA S.A. (AXA) under a settlement agreement reached in the second quarter of 2020 regarding a dispute over payment protection insurance claims sold by the company’s former lifestyle protection insurance business, along with interest expense and other legal fees and expenses. During the second quarter of 2020, the company recorded an after-tax loss of $520 million in connection with the settlement agreement, including legal fees and other expenses. During the fourth quarter of 2019, the company also recorded an after-tax loss of $110 million prior to reaching the settlement agreement with AXA.

⁽²⁾

Under applicable accounting guidance, companies in a loss position are required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of the loss from continuing operations for the three months ended March 31, 2020, the company was required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share for the three months ended March 31, 2020, as the inclusion of shares for stock options, restricted stock units and stock appreciation rights of 5.4 million would have been antidilutive to the calculation. If the company had not incurred a loss from continuing operations for the three months ended March 31, 2020, dilutive potential weighted-average common shares outstanding would have been 509.7 million.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

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

(amounts in millions, except per share amounts)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS	$	418		$	(441	)	$	(66	)	$	(89	)	$	(17	)	$	18		$	168		$	174		$	343
Add: net income (loss) from continuing operations attributable to noncontrolling interests		18			23			(6	)		35			19			10			15			20			64
Add: net income from discontinued operations attributable to noncontrolling interests		—			—			—			—			22			30			35			36			123

NET INCOME (LOSS)		436			(418	)		(72	)		(54	)		24			58			218			230			530
Less: income (loss) from discontinued operations, net of taxes		1			(520	)		—			(519	)		(31	)		(80	)		60			62			11

INCOME (LOSS) FROM CONTINUING OPERATIONS		435			102			(72	)		465			55			138			158			168			519
Less: net income (loss) from continuing operations attributable to noncontrolling interests		18			23			(6	)		35			19			10			15			20			64

INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS		417			79			(66	)		430			36			128			143			148			455

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Net investment (gains) losses, net⁽¹⁾		(362	)		(131	)		115			(378	)		(17	)		(5	)		43			(71	)		(50	)
Goodwill impairment, net⁽²⁾		—			3			—			3			—			—			—			—			—
(Gains) losses on early extinguishment of debt		—			(3	)		12			9			—			—			—			—			—
Expenses related to restructuring		—			1			1			2			—			—			—			4			4
Taxes on adjustments		77			30			(29	)		78			5			—			(8	)		14			11

ADJUSTED OPERATING INCOME (LOSS)	$	132		$	(21	)	$	33		$	144		$	24		$	123		$	178		$	95		$	420

ADJUSTED OPERATING INCOME (LOSS):
U.S. Mortgage Insurance segment	$	141		$	(3	)	$	148		$	286		$	160		$	137		$	147		$	124		$	568
Australia Mortgage Insurance segment		7			1			9			17			12			12			13			14			51
U.S. Life Insurance segment:
Long-Term Care Insurance		59			48			1			108			19			21			37			(20	)		57
Life Insurance		(69	)		(81	)		(77	)		(227	)		(164	)		(25	)		10			(2	)		(181	)
Fixed Annuities		24			28			6			58			30			3			19			17			69

Total U.S. Life Insurance segment		14			(5	)		(70	)		(61	)		(115	)		(1	)		66			(5	)		(55	)

Runoff segment		19			24			(13	)		30			17			10			9			20			56
Corporate and Other		(49	)		(38	)		(41	)		(128	)		(50	)		(35	)		(57	)		(58	)		(200	)

ADJUSTED OPERATING INCOME (LOSS)	$	132		$	(21	)	$	33		$	144		$	24		$	123		$	178		$	95		$	420


Earnings (Loss) Per Share Data:
Net income (loss) available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.83		$	(0.87	)	$	(0.13	)	$	(0.18	)	$	(0.03	)	$	0.04		$	0.33		$	0.35		$	0.68
Diluted	$	0.82		$	(0.86	)	$	(0.13	)	$	(0.17	)	$	(0.03	)	$	0.04		$	0.33		$	0.34		$	0.67
Adjusted operating income (loss) per share
Basic	$	0.26		$	(0.04	)	$	0.07		$	0.29		$	0.05		$	0.25		$	0.35		$	0.19		$	0.84
Diluted	$	0.26		$	(0.04	)	$	0.07		$	0.28		$	0.05		$	0.24		$	0.35		$	0.19		$	0.82
Weighted-average common shares outstanding
Basic		505.6			505.4			504.3			505.1			503.5			503.5			503.4			501.2			502.9
Diluted⁽³⁾		511.5			512.5			504.3			511.2			510.4			511.2			508.7			508.6			509.7

⁽¹⁾	Net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests and DAC and other intangible amortization and certain benefit reserves (see page 41 for reconciliation).

⁽²⁾	For the three months ended June 30, 2020, goodwill impairment was adjusted by $2 million related to the company’s mortgage insurance business in Australia for the portion attributable to noncontrolling interests.

⁽³⁾

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Consolidated Balance Sheets

(amounts in millions)


	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
ASSETS
Investments:
Fixed maturity securities available-for-sale, at fair value⁽¹⁾	$	64,416		$	63,544		$	59,051		$	60,339		$	61,233
Equity securities, at fair value		629			206			188			239			239
Commercial mortgage loans⁽²⁾		6,911			6,945			6,944			6,976			7,045
Less: Allowance for credit losses		(31	)		(28	)		(29	)		(13	)		(12	)

Commercial mortgage loans, net		6,880			6,917			6,915			6,963			7,033
Policy loans		2,153			2,182			2,052			2,058			2,069
Other invested assets		2,402			2,473			2,465			1,632			1,693

Total investments		76,480			75,322			70,671			71,231			72,267
Cash, cash equivalents and restricted cash		2,780			2,597			2,483			3,341			1,629
Accrued investment income		650			601			707			654			643
Deferred acquisition costs		1,623			1,718			1,898			1,836			1,881
Intangible assets and goodwill		209			223			263			201			210
Reinsurance recoverable		16,832			16,944			17,122			17,103			17,180
Less: Allowance for credit losses		(44	)		(44	)		(42	)		—			—

Reinsurance recoverable, net		16,788			16,900			17,080			17,103			17,180
Other assets		445			454			456			443			479
Deferred tax asset		250			286			319			425			236
Separate account assets		5,700			5,536			4,967			6,108			6,005
Assets held for sale related to discontinued operations⁽³⁾		—			—			—			—			5,123

Total assets	$	104,925		$	103,637		$	98,844		$	101,342		$	105,653

⁽¹⁾	Amortized cost of $55,252 million, $54,834 million and $54,136 million as of September 30, 2020, June 30, 2020 and March 31, 2020, respectively, and allowance for credit losses of $5 million, $7 million and $— as of September 30, 2020, June 30, 2020 and March 31, 2020, respectively.

⁽²⁾	Net of unamortized balance of loan origination fees and costs of $4 million as of September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019 and September 30, 2019.

⁽³⁾	Prior to the sale on December 12, 2019, the assets of the company’s former Canada mortgage insurance business were held for sale related to discontinued operations and segregated in the consolidated balance sheets.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Consolidated Balance Sheets

(amounts in millions)


	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	41,995		$	41,463		$	39,339		$	40,384		$	40,489
Policyholder account balances		22,731			22,921			22,313			22,217			22,607
Liability for policy and contract claims		11,373			11,280			11,132			10,958			10,780
Unearned premiums		1,846			1,804			1,722			1,893			1,863
Other liabilities⁽¹⁾		1,913			2,033			1,645			1,386			1,404
Non-recourse funding obligations		—			—			—			311			311
Long-term borrowings		3,570			2,817			2,851			3,277			3,706
Separate account liabilities		5,700			5,536			4,967			6,108			6,005
Liabilities held for sale related to discontinued operations^(1),(2)		565			695			41			176			2,343

Total liabilities		89,693			88,549			84,010			86,710			89,508

Equity:
Common stock		1			1			1			1			1
Additional paid-in capital		11,997			11,996			11,993			11,990			11,986
Accumulated other comprehensive income (loss)		4,141			4,447			3,815			3,433			3,622
Retained earnings		1,317			899			1,340			1,461			1,478
Treasury stock, at cost		(2,700	)		(2,700	)		(2,700	)		(2,700	)		(2,700	)

Total Genworth Financial, Inc.’s stockholders’ equity		14,756			14,643			14,449			14,185			14,387
Noncontrolling interests		476			445			385			447			1,758

Total equity		15,232			15,088			14,834			14,632			16,145

Total liabilities and equity	$	104,925		$	103,637		$	98,844		$	101,342		$	105,653

⁽¹⁾	Certain liability balances have been reclassified to conform to the current period presentation.

⁽²⁾

Liabilities related to discontinued operations as of September 30, 2020 and June 30, 2020 relates to a liability recorded in connection with a settlement agreement reached with AXA involving the sale of the company’s former lifestyle protection insurance business. The company also recorded a contingent liability as of December 31, 2019 prior to reaching the settlement agreement with AXA. Liabilities related to discontinued operations also includes an unrelated liability associated with underwriting losses on a product sold by a distributor in the company’s former lifestyle protection insurance business. In addition, prior to the sale on December 12, 2019, the liabilities of the company’s Canada mortgage insurance business were held for sale related to discontinued operations and segregated in the consolidated balance sheets.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Consolidated Balance Sheet by Segment

(amounts in millions)


	September 30, 2020
	U.S. Mortgage Insurance		Australia Mortgage Insurance		U.S. Life Insurance		Runoff		Corporate and Other⁽¹⁾			Total
ASSETS
Cash and investments	$	5,394	$	2,384	$	66,549	$	3,320	$	2,263		$	79,910
Deferred acquisition costs and intangible assets		49		82		1,546		145		10			1,832
Reinsurance recoverable, net		—		—		16,065		723		—			16,788
Deferred tax and other assets		51		135		48		13		448			695
Separate account assets		—		—		—		5,700		—			5,700

Total assets	$	5,494	$	2,601	$	84,208	$	9,901	$	2,721		$	104,925

LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	—	$	—	$	41,993	$	2	$	—		$	41,995
Policyholder account balances		—		—		19,158		3,573		—			22,731
Liability for policy and contract claims		474		238		10,642		11		8			11,373
Unearned premiums		328		1,052		462		4		—			1,846
Other liabilities		130		188		980		48		567			1,913
Borrowings		738		169		—		—		2,663			3,570
Separate account liabilities		—		—		—		5,700		—			5,700
Liabilities related to discontinued operations		—		—		—		—		565			565

Total liabilities		1,670		1,647		73,235		9,338		3,803			89,693

Equity:
Allocated equity, excluding accumulated other comprehensive income (loss)		3,640		443		7,043		530		(1,041	)		10,615
Allocated accumulated other comprehensive income (loss)		184		35		3,930		33		(41	)		4,141

Total Genworth Financial, Inc.’s stockholders’ equity		3,824		478		10,973		563		(1,082	)		14,756
Noncontrolling interests		—		476		—		—		—			476

Total equity		3,824		954		10,973		563		(1,082	)		15,232

Total liabilities and equity	$	5,494	$	2,601	$	84,208	$	9,901	$	2,721		$	104,925

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Consolidated Balance Sheet by Segment

(amounts in millions)


	June 30, 2020
	U.S. Mortgage Insurance		Australia Mortgage Insurance		U.S. Life Insurance			Runoff		Corporate and Other⁽¹⁾			Total
ASSETS
Cash and investments	$	4,831	$	2,216	$	66,136		$	3,355	$	1,982		$	78,520
Deferred acquisition costs and intangible assets		49		82		1,650			149		11			1,941
Reinsurance recoverable, net		—		2		16,164			734		—			16,900
Deferred tax and other assets		64		139		(121	)		9		649			740
Separate account assets		—		—		—			5,536		—			5,536

Total assets	$	4,944	$	2,439	$	83,829		$	9,783	$	2,642		$	103,637

LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	—	$	—	$	41,461		$	2	$	—		$	41,463
Policyholder account balances		—		—		19,317			3,604		—			22,921
Liability for policy and contract claims		439		226		10,583			25		7			11,280
Unearned premiums		340		994		466			4		—			1,804
Other liabilities		115		192		1,142			48		578			2,075
Borrowings		—		138		—			—		2,679			2,817
Separate account liabilities		—		—		—			5,536		—			5,536
Liabilities related to discontinued operations		—		—		—			—		653			653

Total liabilities		894		1,550		72,969			9,219		3,917			88,549

Equity:
Allocated equity, excluding accumulated other comprehensive income (loss)		3,897		422		6,546			538		(1,207	)		10,196
Allocated accumulated other comprehensive income (loss)		153		22		4,314			26		(68	)		4,447

Total Genworth Financial, Inc.’s stockholders’ equity		4,050		444		10,860			564		(1,275	)		14,643
Noncontrolling interests		—		445		—			—		—			445

Total equity		4,050		889		10,860			564		(1,275	)		15,088

Total liabilities and equity	$	4,944	$	2,439	$	83,829		$	9,783	$	2,642		$	103,637

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Deferred Acquisition Costs Rollforward

(amounts in millions)


	U.S. Mortgage Insurance			Australia Mortgage Insurance			U.S. Life Insurance			Runoff			Total
Unamortized balance as of June 30, 2020	$	32		$	36		$	2,879		$	158		$	3,105
Costs deferred		3			3			(6	)		—			—
Amortization, net of interest accretion		(2	)		(2	)		(79	)		(4	)		(87	)
Impact of foreign currency translation		—			1			—			—			1

Unamortized balance as of September 30, 2020		33			38			2,794			154			3,019
Effect of accumulated net unrealized investment (gains) losses		—			—			(1,384	)		(12	)		(1,396	)

Balance as of September 30, 2020	$	33		$	38		$	1,410		$	142		$	1,623

U.S. Mortgage Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

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

(amounts in millions)


	2020											2019
	3Q			2Q			1Q		Total			4Q			3Q		2Q		1Q		Total
REVENUES:
Premiums	$	251		$	243		$	226	$	720		$	237		$	219	$	206	$	194	$	856
Net investment income		34			31			33		98			30			31		28		28		117
Net investment gains (losses)		(2	)		(1	)		—		(3	)		1			—		—		—		1
Policy fees and other income		1			1			2		4			1			1		1		1		4

Total revenues		284			274			261		819			269			251		235		223		978

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		45			228			19		292			11			23		—		16		50
Acquisition and operating expenses, net of deferrals		54			47			50		151			50			51		44		46		191
Amortization of deferred acquisition costs and intangibles		3			4			4		11			4			3		4		4		15
Interest expense		6			—			—		6			—			—		—		—		—

Total benefits and expenses		108			279			73		460			65			77		48		66		256

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		176			(5	)		188		359			204			174		187		157		722
Provision (benefit) for income taxes		37			(1	)		40		76			43			37		40		33		153

INCOME (LOSS) FROM CONTINUING OPERATIONS		139			(4	)		148		283			161			137		147		124		569

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses		2			1			—		3			(1	)		—		—		—		(1	)
Taxes on adjustments		—			—			—		—			—			—		—		—		—

ADJUSTED OPERATING INCOME (LOSS)	$	141		$	(3	)	$	148	$	286		$	160		$	137	$	147	$	124	$	568


SALES:
Primary New Insurance Written (NIW)⁽¹⁾	$	26,600		$	28,400		$	17,900	$	72,900		$	18,100		$	18,900	$	15,800	$	9,600	$	62,400

⁽¹⁾

In the third quarter of 2020, the company revised the product descriptions in its U.S. Mortgage Insurance segment to conform with industry convention and certain regulatory definitions, including classifications under the Private Mortgage Insurer Eligibility Requirements (PMIERs). Prior year amounts throughout the U.S. Mortgage Insurance segment pages of this quarterly financial supplement have been reclassified to conform to the current year presentation where applicable.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

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

(amounts in millions)


	2020															2019
	3Q					2Q					1Q					4Q					3Q					2Q					1Q
	Primary NIW		% of Primary NIW			Primary NIW		% of Primary NIW			Primary NIW		% of Primary NIW			Primary NIW		% of Primary NIW			Primary NIW		% of Primary NIW			Primary NIW		% of Primary NIW			Primary NIW		% of Primary NIW
Product
Monthly	$	23,400		88	%	$	25,800		91	%	$	16,200		91	%	$	16,200		89	%	$	16,500		87	%	$	13,800		87	%	$	8,200		85	%
Single		3,100		12			2,500		9			1,500		8			1,800		10			2,100		11			1,800		12			1,300		14
Other⁽¹⁾		100		—			100		—			200		1			100		1			300		2			200		1			100		1

Total Primary	$	26,600		100	%	$	28,400		100	%	$	17,900		100	%	$	18,100		100	%	$	18,900		100	%	$	15,800		100	%	$	9,600		100	%

FICO Scores
Over 760	$	11,300		43	%	$	12,300		43	%	$	7,500		42	%	$	7,400		41	%	$	7,600		40	%	$	6,100		39	%	$	3,700		39	%
740-759		4,100		15			4,800		17			3,200		18			3,200		18			3,300		17			2,500		16			1,600		17
720-739		3,500		13			4,200		15			2,600		14			2,800		15			2,700		14			2,300		15			1,400		15
700-719		3,100		12			3,300		11			2,200		12			2,300		13			2,300		12			2,100		13			1,200		12
680-699		2,400		9			2,200		8			1,500		8			1,500		8			1,800		10			1,600		10			900		9
660-679⁽²⁾		1,300		5			900		3			500		3			500		3			700		4			600		4			400		4
640-659		600		2			500		2			300		2			300		2			300		2			400		2			300		3
620-639		300		1			200		1			100		1			100		—			200		1			200		1			100		1
<620		—		—			—		—			—		—			—		—			—		—			—		—			—		—

Total Primary	$	26,600		100	%	$	28,400		100	%	$	17,900		100	%	$	18,100		100	%	$	18,900		100	%	$	15,800		100	%	$	9,600		100	%

Loan-To-Value Ratio
95.01% and above	$	3,700		14	%	$	3,200		11	%	$	1,800		10	%	$	2,000		11	%	$	2,900		16	%	$	2,900		18	%	$	1,800		19	%
90.01% to 95.00%		11,700		44			12,300		43			7,700		43			7,900		44			8,000		42			6,900		44			4,200		44
85.01% to 90.00%		7,100		27			8,100		29			5,500		31			5,600		31			5,500		29			4,300		27			2,500		26
85.00% and below		4,100		15			4,800		17			2,900		16			2,600		14			2,500		13			1,700		11			1,100		11

Total Primary	$	26,600		100	%	$	28,400		100	%	$	17,900		100	%	$	18,100		100	%	$	18,900		100	%	$	15,800		100	%	$	9,600		100	%

Origination
Purchase	$	20,000		75	%	$	17,400		61	%	$	12,000		67	%	$	12,900		71	%	$	14,900		79	%	$	13,900		88	%	$	8,600		90	%
Refinance		6,600		25			11,000		39			5,900		33			5,200		29			4,000		21			1,900		12			1,000		10

Total Primary	$	26,600		100	%	$	28,400		100	%	$	17,900		100	%	$	18,100		100	%	$	18,900		100	%	$	15,800		100	%	$	9,600		100	%

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

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Other Metrics—U.S. Mortgage Insurance Segment

(dollar amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net Premiums Written	$	240		$	217		$	208		$	665		$	208		$	213		$	204		$	193		$	818

Primary New Risk Written	$	6,668		$	7,011		$	4,405		$	18,084		$	4,465		$	4,647		$	3,931		$	2,403		$	15,446

Primary Insurance In-Force⁽¹⁾	$	212,400		$	206,600		$	197,700					$	191,300		$	185,400		$	177,500		$	169,400

Risk In-Force
Primary	$	51,393		$	49,868		$	47,740					$	46,246		$	44,903		$	42,936		$	41,040
Pool		156			169			179						188			201			210			219

Total Risk In-Force	$	51,549		$	50,037		$	47,919					$	46,434		$	45,104		$	43,146		$	41,259


Primary Risk In-Force That Is GSE Conforming		93	%		93	%		92	%					93	%		93	%		93	%		93	%

Expense Ratio (Net Earned Premiums)⁽²⁾		23	%		21	%		24	%		23	%		23	%		24	%		24	%		25	%		24	%

Expense Ratio (Net Premiums Written)⁽³⁾		24	%		23	%		26	%		24	%		27	%		25	%		24	%		26	%		25	%

Primary Persistency		60	%		60	%		76	%					74	%		75	%		82	%		86	%

Risk To Capital Ratio⁽⁴⁾		12.1:1			12.0:1			12.2:1						12.2:1			11.9:1			11.8:1			11.9:1

PMIERs Sufficiency Ratio⁽⁵⁾		132	%		143	%		142	%					138	%		129	%		123	%		123	%

Average Primary Loan Size (in thousands)	$	232		$	231		$	228					$	225		$	222		$	220		$	216

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

⁽¹⁾

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

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

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

⁽⁴⁾

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

⁽⁵⁾

The PMIERs sufficiency ratio is calculated as available assets divided by required assets as defined within PMIERs. The current period PMIERs sufficiency ratio is an estimate due to the timing of the PMIERs filing for the U.S. mortgage insurance business and does not take into consideration the impact of restrictions recently imposed by the government-sponsored enterprises (GSEs). As of September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, the PMIERs sufficiency ratios were $1,074 million, $1,275 million, $1,171 million, $1,057 million, $861million, $673 million and $648 million, respectively, of available assets above the published PMIERs requirements. The GSEs have imposed certain capital restrictions on the U.S. mortgage insurance business which remain in effect until certain conditions are met. These restrictions currently require Genworth Mortgage Insurance Corporation, the company’s principal U.S. mortgage insurance subsidiary, to maintain 115% of PMIERs minimum required assets among other restrictions.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Loss Metrics—U.S. Mortgage Insurance Segment

(amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Paid claims
Primary
Direct	$	8		$	18		$	20		$	46		$	22		$	28		$	24		$	30		$	104
Assumed⁽¹⁾		—			—			—			—			—			—			—			—			—
Ceded		—			—			—			—			—			—			—			—			—
Loss adjustment expenses		1			1			2			4			2			1			2			2			7

Total Primary		9			19			22			50			24			29			26			32			111
Pool		1			—			—			1			1			1			—			—			2

Total Paid Claims	$	10		$	19		$	22		$	51		$	25		$	30		$	26		$	32		$	113


Average Paid Claim (in thousands)	$	55.6		$	47.1		$	45.0					$	39.2		$	44.2		$	45.4		$	49.0

Average Reserve Per Delinquency (in thousands)⁽²⁾	$	8.8		$	7.1		$	13.1					$	12.5		$	13.8		$	14.7		$	15.5

Reserves:
Primary direct case	$	436		$	379		$	202					$	205		$	217		$	223		$	247
Assumed⁽¹⁾		1			1			1						1			1			1			1
All other⁽³⁾		37			59			27						27			29			30			32

Total Reserves	$	474		$	439		$	230					$	233		$	247		$	254		$	280


Beginning Reserves	$	439		$	230		$	233		$	233		$	247		$	254		$	280		$	296		$	296
Paid claims		(10	)		(19	)		(22	)		(51	)		(25	)		(30	)		(26	)		(32	)		(113	)
Increase (decrease) in reserves		45			228			19			292			11			23			—			16			50

Ending Reserves	$	474		$	439		$	230		$	474		$	233		$	247		$	254		$	280		$	233

Loss Ratio⁽⁴⁾		18	%		94	%		8	%		41	%		4	%		11	%		-	%		8	%		6	%

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

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

⁽²⁾	Primary direct case reserves divided by primary delinquency count.

⁽³⁾	Other includes loss adjustment expenses, pool and incurred but not reported reserves.

⁽⁴⁾

The ratio of benefits and other changes in policy reserves to net earned premiums. The company recorded a favorable reserve adjustment of $13 million and a favorable adjustment to net earned premiums of $14 million in the fourth quarter of 2019, which reduced the loss ratio by six percentage points for the three months ended December 31, 2019. The company also recorded a favorable reserve adjustment of $10 million in the second quarter of 2019, which reduced the loss ratio by five percentage points for the three months ended June 30, 2019. These adjustments reduced the loss ratio by three percentage points for the twelve months ended December 31, 2019.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Delinquency Metrics—U.S. Mortgage Insurance Segment

(dollar amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Beginning Number of Primary Delinquencies		53,587			15,417			16,392			16,392			15,758			15,227			15,934			16,860			16,860
New delinquencies		16,664			48,373			8,114			73,151			8,658			8,547			7,606			8,424			33,235
Delinquency cures		(20,404	)		(9,795	)		(8,649	)		(38,848	)		(7,464	)		(7,382	)		(7,791	)		(8,726	)		(31,363	)
Paid claims		(152	)		(404	)		(440	)		(996	)		(558	)		(631	)		(515	)		(619	)		(2,323	)
Rescissions and claim denials		(3	)		(4	)		—			(7	)		(2	)		(3	)		(7	)		(5	)		(17	)

Ending Number of Primary Delinquencies		49,692			53,587			15,417			49,692			16,392			15,758			15,227			15,934			16,392

Composition of Cures
Reported delinquent and cured-intraquarter		1,939			3,992			2,236						1,700			1,818			1,621			2,339
Number of missed payments delinquent prior to cure:
3 payments or less		13,022			4,522			4,850						4,390			4,110			4,510			4,786
4 - 11 payments		5,239			1,122			1,389						1,167			1,215			1,417			1,323
12 payments or more		204			159			174						207			239			243			278

Total		20,404			9,795			8,649						7,464			7,382			7,791			8,726

Primary Delinquencies by Missed Payment Status
3 payments or less		13,904			43,158			7,650						8,618			8,294			7,704			7,768
4 - 11 payments		32,366			7,448			4,909						4,876			4,360			4,197			4,700
12 payments or more		3,422			2,981			2,858						2,898			3,104			3,326			3,466

Primary Delinquencies		49,692			53,587			15,417						16,392			15,758			15,227			15,934



	September 30, 2020
Primary Delinquencies and Percentage Reserved by Payment Status	Direct Case Reserves⁽¹⁾			Risk In-Force			Reserves as % of Risk In-Force
3 payments or less in default	$	49		$	763			6	%
4 - 11 payments in default		264			2,014			13	%
12 payments or more in default		123			168			73	%

Total	$	436		$	2,945			15	%


	December 31, 2019
Primary Delinquencies and Percentage Reserved by Payment Status	Direct Case Reserves⁽¹⁾			Risk In- Force			Reserves as % of Risk In-Force
3 payments or less in default	$	28		$	386			7	%
4 - 11 payments in default		78			225			35	%
12 payments or more in default		99			146			68	%

Total	$	205		$	757			27	%

⁽¹⁾	Direct primary case reserves exclude loss adjustment expenses, incurred but not reported and reinsurance reserves.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Portfolio Quality Metrics - U.S. Mortgage Insurance Segment


	2020									2019
	3Q			2Q			1Q			4Q			3Q			2Q			1Q
Primary Loans
Primary loans in-force		913,974			896,232			868,111			851,070			833,215			808,428			782,471
Primary delinquent loans		49,692			53,587			15,417			16,392			15,758			15,227			15,934
Primary delinquency rate		5.44	%		5.98	%		1.78	%		1.93	%		1.89	%		1.88	%		2.04	%

A minus and sub-prime loans in-force		10,984			11,610			12,141			12,688			13,345			14,074			14,599
A minus and sub-prime delinquent loans		2,342			2,453			2,061			2,266			2,320			2,352			2,512
A minus and sub-prime delinquency rate		21.32	%		21.13	%		16.98	%		17.86	%		17.38	%		16.71	%		17.21	%

Pool Loans
Pool loans in-force		11,888			12,339			12,872			13,266			13,738			14,261			14,799
Pool delinquent loans		434			458			363			382			415			432			459
Pool delinquency rate		3.65	%		3.71	%		2.82	%		2.88	%		3.02	%		3.03	%		3.10	%

Primary Risk In-Force by Credit Quality
Over 760		38	%		38	%		38	%		38	%		38	%		38	%		38	%
740—759		16			17			17			17			16			16			16
720—739		15			15			15			14			14			14			14
700—719		12			12			12			12			12			12			12
680—699		9			9			9			9			9			9			9
660—679⁽¹⁾		5			4			4			5			5			5			5
640—659		3			3			3			3			3			3			3
620—639		1			1			1			1			2			2			2
<620		1			1			1			1			1			1			1

Total Primary		100	%		100	%		100	%		100	%		100	%		100	%		100	%

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Portfolio Quality Metrics—U.S. Mortgage Insurance Segment

(amounts in millions)


	September 30, 2020
Policy Year	Average Rate⁽¹⁾			% of Total Reserves⁽²⁾			Primary Insurance In-Force		% of Total			Primary Risk In-Force		% of Total			Delinquency Rate
2004 and prior		6.08	%		3.7	%	$	870		0.4	%	$	212		0.4	%		16.85	%
2005 to 2008		5.43	%		27.8			12,940		6.1			2,932		5.7			13.22	%
2009 to 2012		4.20	%		1.3			1,858		0.9			404		0.8			5.51	%
2013		4.13	%		1.3			2,567		1.2			613		1.2			4.87	%
2014		4.45	%		3.1			4,944		2.3			1,174		2.3			5.80	%
2015		4.15	%		5.3			10,336		4.9			2,465		4.8			5.56	%
2016		3.88	%		9.2			19,715		9.3			4,727		9.2			5.53	%
2017		4.24	%		11.4			20,541		9.7			4,938		9.6			6.59	%
2018		4.75	%		13.4			21,282		10.0			5,119		9.9			7.73	%
2019		4.20	%		18.2			46,638		21.9			11,346		22.1			5.79	%
2020		3.42	%		5.3			70,745		33.3			17,463		34.0			1.24	%

Total		4.06	%		100.0	%	$	212,436		100.0	%	$	51,393		100.0	%		5.44	%


	September 30, 2020						June 30, 2020					September 30, 2019
	Primary Risk In-Force			Primary Delinquency Rate			Primary Risk In-Force		Primary Delinquency Rate			Primary Risk In-Force		Primary Delinquency Rate
Lender concentration (by original applicant)	$	51,393			5.44	%	$	49,868		5.98	%	$	44,903		1.89	%
Top 10 lenders	$	15,683			6.11	%	$	15,803		6.62	%	$	13,474		2.03	%
Top 20 lenders	$	20,263			6.03	%	$	20,264		6.52	%	$	17,647		1.87	%
Loan-to-value ratio
95.01% and above	$	9,196			6.96	%	$	8,789		7.43	%	$	8,238		3.19	%
90.01% to 95.00%		26,403			5.37	%		25,686		5.85	%		23,309		1.52	%
80.01% to 90.00%		15,772			4.58	%		15,370		5.26	%		13,331		1.53	%
80.00% and below		22			5.81	%		23		5.91	%		25		2.36	%

Total	$	51,393			5.44	%	$	49,868		5.98	%	$	44,903		1.89	%

Loan grade
Prime	$	51,000			5.24	%	$	49,454		5.78	%	$	44,430		1.64	%
A minus and sub-prime		393			21.32	%		414		21.13	%		473		17.38	%

Total	$	51,393			5.44	%	$	49,868		5.98	%	$	44,903		1.89	%

⁽¹⁾	Average Annual Mortgage Interest Rate.

⁽²⁾	Total reserves were $474 million as of September 30, 2020.

Australia Mortgage Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Adjusted Operating Income and Sales—Australia Mortgage Insurance Segment

(amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	71		$	62		$	69		$	202		$	72		$	77		$	80		$	83		$	312
Net investment income		7			8			10			25			11			13			15			16			55
Net investment gains (losses)		24			66			(53	)		37			19			(9	)		1			12			23
Policy fees and other income		—			—			1			1			—			1			—			(1	)		—

Total revenues		102			136			27			265			102			82			96			110			390

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		26			39			24			89			22			28			26			28			104
Acquisition and operating expenses, net of deferrals		19			18			17			54			18			17			17			17			69
Amortization of deferred acquisition costs and intangibles		7			6			8			21			6			9			9			9			33
Goodwill impairment		—			5			—			5			—			—			—			—			—
Interest expense		2			2			1			5			2			2			2			2			8

Total benefits and expenses		54			70			50			174			48			56			54			56			214

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		48			66			(23	)		91			54			26			42			54			176
Provision (benefit) for income taxes		15			20			(7	)		28			16			8			13			16			53

INCOME (LOSS) FROM CONTINUING OPERATIONS		33			46			(16	)		63			38			18			29			38			123
Less: net income (loss) from continuing operations attributable to noncontrolling interests		18			23			(6	)		35			19			10			15			20			64

INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS		15			23			(10	)		28			19			8			14			18			59
ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Net investment (gains) losses, net⁽¹⁾		(12	)		(34	)		27			(19	)		(10	)		5			(1	)		(6	)		(12	)
Goodwill impairment, net⁽²⁾		—			3			—			3			—			—			—			—			—
Taxes on adjustments		4			9			(8	)		5			3			(1	)		—			2			4

ADJUSTED OPERATING INCOME⁽³⁾	$	7		$	1		$	9		$	17		$	12		$	12		$	13		$	14		$	51


SALES:
New Insurance Written (NIW)
Flow	$	5,500		$	4,400		$	4,100		$	14,000		$	4,900		$	4,600		$	3,700		$	3,400		$	16,600
Bulk		100			100			200			400			400			—			1,200			500			2,100

Total Australia NIW^(4),(5)	$	5,600		$	4,500		$	4,300		$	14,400		$	5,300		$	4,600		$	4,900		$	3,900		$	18,700


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

Net investment (gains) losses, gross	$	(24	)	$	(66	)	$	53		$	(37	)	$	(19	)	$	9		$	(1	)	$	(12	)	$	(23	)
Adjustment for net investment gains (losses) attributable to noncontrolling interests		12			32			(26	)		18			9			(4	)		—			6			11

Net investment (gains) losses, net	$	(12	)	$	(34	)	$	27		$	(19	)	$	(10	)	$	5		$	(1	)	$	(6	)	$	(12	)

⁽²⁾	For the three months ended June 30, 2020, goodwill impairment was adjusted by $2 million for the portion attributable to noncontrolling interests.

⁽³⁾	Adjusted operating income for the Australian platform adjusted for foreign exchange as compared to the prior year period was $7 million and $18 million for the three and nine months ended September 30, 2020, respectively.

⁽⁴⁾	New insurance written for the Australian platform adjusted for foreign exchange as compared to the prior year period was $5,500 million and $15,000 million for the three and nine months ended September 30, 2020, respectively.

⁽⁵⁾	The business currently has structured insurance transactions with three lenders where it is in a secondary loss position. The new insurance written associated with these arrangements is excluded from these metrics.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Selected Key Performance Measures - Australia Mortgage Insurance Segment

(amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net Premiums Written	$	91		$	70		$	62		$	223		$	92		$	70		$	58		$	52		$	272
Loss Ratio⁽¹⁾		37	%		63	%		34	%		44	%		30	%		36	%		34	%		34	%		33	%
Expense Ratio (Net Earned Premiums)⁽²⁾		37	%		47	%		36	%		40	%		34	%		34	%		33	%		31	%		33	%
Expense Ratio (Net Premiums Written)⁽³⁾		29	%		41	%		40	%		36	%		26	%		38	%		44	%		50	%		38	%
Primary Insurance In-Force⁽⁴⁾	$	215,800		$	210,200		$	188,400					$	215,700		$	206,400		$	215,600		$	219,200
Primary Risk In-Force^(4),(5)
Flow	$	69,700		$	67,700		$	60,700					$	69,400		$	66,400		$	69,100		$	70,600
Bulk		5,500			5,500			5,000						5,700			5,500			6,000			5,700

Total	$	75,200		$	73,200		$	65,700					$	75,100		$	71,900		$	75,100		$	76,300



	September 30, 2020												June 30, 2020
Risk In-Force by Loan-To-Value Ratio^(4),(6)	Primary			Flow			Bulk						Primary			Flow			Bulk
95.01% and above	$	9,781		$	9,781		$	—					$	9,613		$	9,613		$	—
90.01% to 95.00%		21,842			21,831			11						21,066			21,057			9
80.01% to 90.00%		24,435			24,354			81						23,481			23,403			78
80.00% and below		19,153			13,729			5,424						19,060			13,675			5,385

Total	$	75,211		$	69,695		$	5,516					$	73,220		$	67,748		$	5,472

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

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

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

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

⁽⁴⁾

The business currently has structured insurance transactions with three lenders where it is in a secondary loss position. The insurance in-force and risk in-force associated with these arrangements are excluded from these metrics. The risk in-force on these transactions was approximately $168 million, $162 million, $143 million, $162 million, $152 million, $157 million and $157 million as of September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively.

⁽⁵⁾

The business currently provides 100% coverage on the majority of the loans the company insures. For the purpose of representing the risk in-force, Australia has computed an “effective risk in-force” amount which recognizes that the loss on any particular loan will be reduced by the net proceeds received upon sale of the property. Effective risk in-force has been calculated by applying to insurance in-force a factor that represents the highest expected average per-claim payment for any one underwriting year over the life of the business. This factor was 35% for all periods presented. Australia also has certain risk share arrangements where it provides pro-rata coverage of certain loans rather than 100% coverage. As a result, for loans with these risk share arrangements, the applicable pro-rata coverage amount provided is used when applying the factor.

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(dollar amounts in millions)


Primary Insurance⁽¹⁾	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Insured loans in-force		1,193,072			1,236,657			1,284,120			1,290,216			1,293,961
Insured delinquent loans		7,422			7,614			7,274			7,221			7,713
Insured delinquency rate		0.62	%		0.62	%		0.57	%		0.56	%		0.60	%

Flow loans in-force		1,096,679			1,137,784			1,183,889			1,189,019			1,192,282
Flow delinquent loans		7,171			7,380			7,055			7,003			7,469
Flow delinquency rate		0.65	%		0.65	%		0.60	%		0.59	%		0.63	%

Bulk loans in-force		96,393			98,873			100,231			101,197			101,679
Bulk delinquent loans		251			234			219			218			244
Bulk delinquency rate		0.26	%		0.24	%		0.22	%		0.22	%		0.24	%

Loss Metrics	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Beginning Reserves	$	226		$	184		$	208		$	204		$	209
Paid claims⁽²⁾		(23	)		(22	)		(21	)		(25	)		(24	)
Increase in reserves		26			39			24			22			27
Impact of changes in foreign exchange rates		9			25			(27	)		7			(8	)

Ending Reserves	$	238		$	226		$	184		$	208		$	204


	September 30, 2020						June 30, 2020						September 30, 2019
State and Territory⁽¹⁾	% of Primary Risk In-Force			Primary Delinquency Rate			% of Primary Risk In-Force			Primary Delinquency Rate			% of Primary Risk In-Force			Primary Delinquency Rate
New South Wales		28	%		0.50	%		27	%		0.51	%		28	%		0.45	%
Queensland		23			0.77	%		23			0.78	%		23			0.80	%
Victoria		23			0.49	%		23			0.46	%		22			0.43	%
Western Australia		13			1.04	%		13			1.06	%		13			1.06	%
South Australia		6			0.69	%		6			0.70	%		6			0.69	%
Australian Capital Territory		3			0.25	%		3			0.27	%		3			0.26	%
Tasmania		2			0.24	%		2			0.27	%		2			0.31	%
New Zealand		1			0.05	%		2			0.03	%		2			0.02	%
Northern Territory		1			0.92	%		1			0.87	%		1			0.85	%

Total		100	%		0.62	%		100	%		0.62	%		100	%		0.60	%


By Policy Year⁽¹⁾
2011 and prior		41	%		0.59	%		44	%		0.55	%		47	%		0.53	%
2012		5			0.99	%		5			1.01	%		6			1.04	%
2013		6			1.06	%		6			1.12	%		6			1.13	%
2014		7			1.08	%		7			1.10	%		8			1.01	%
2015		7			0.83	%		7			0.89	%		7			0.86	%
2016		6			0.68	%		6			0.71	%		7			0.60	%
2017		6			0.52	%		6			0.57	%		7			0.41	%
2018		7			0.41	%		7			0.41	%		7			0.22	%
2019		8			0.17	%		8			0.10	%		5			0.01	%
2020		7			0.01	%		4			0.01	%		—			—	%

Total		100	%		0.62	%		100	%		0.62	%		100	%		0.60	%

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

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(Australian dollar amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Paid Claims⁽¹⁾
Flow	$	33		$	35		$	31		$	99		$	37		$	35		$	28		$	30		$	130

Total Paid Claims	$	33		$	35		$	31		$	99		$	37		$	35		$	28		$	30		$	130


Average Paid Claim (in thousands)	$	99.4		$	97.0		$	92.7					$	99.4		$	97.9		$	94.1		$	94.2

Average Reserve Per Delinquency (in thousands)	$	44.7		$	43.0		$	41.3					$	41.1		$	39.2		$	37.8		$	38.4

Loss Metrics
Beginning Reserves	$	328		$	301		$	297		$	297		$	302		$	298		$	288		$	279		$	279
Paid claims⁽¹⁾		(33	)		(35	)		(31	)		(99	)		(37	)		(35	)		(28	)		(30	)		(130	)
Increase in reserves		36			62			35			133			32			39			38			39			148

Ending Reserves	$	331		$	328		$	301		$	331		$	297		$	302		$	298		$	288		$	297

Loan Amount^(2),(3)
Over $550K		21	%		21	%		20	%					19	%		19	%		19	%		18	%
$400K to $550K		23			22			22						22			22			21			21
$250K to $400K		33			33			32						33			33			33			34
$100K to $250K		19			20			21						21			21			22			22
$100K or Less		4			4			5						5			5			5			5

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


Average Primary Loan Size (in thousands)⁽³⁾	$	252		$	246		$	240					$	238		$	236		$	235		$	233

All amounts presented in Australian dollars.

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

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

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

U.S. Life Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

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

(amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	711		$	712		$	718		$	2,141		$	722		$	717		$	713		$	709		$	2,861
Net investment income		726			692			695			2,113			705			722			724			701			2,852
Net investment gains (losses)		348			118			(70	)		396			23			11			(36	)		84			82
Policy fees and other income		152			142			144			438			153			152			187			151			643

Total revenues		1,937			1,664			1,487			5,088			1,603			1,602			1,588			1,645			6,438

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		1,221			1,213			1,297			3,731			1,307			1,225			1,211			1,236			4,979
Interest credited		95			97			100			292			101			106			106			106			419
Acquisition and operating expenses, net of deferrals		158			147			151			456			156			158			142			148			604
Amortization of deferred acquisition costs and intangibles		87			83			87			257			150			89			67			66			372
Interest expense		—			—			5			5			4			4			4			5			17

Total benefits and expense		1,561			1,540			1,640			4,741			1,718			1,582			1,530			1,561			6,391

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		376			124			(153	)		347			(115	)		20			58			84			47
Provision (benefit) for income taxes		87			33			(27	)		93			(19	)		10			19			24			34

INCOME (LOSS) FROM CONTINUING OPERATIONS		289			91			(126	)		254			(96	)		10			39			60			13

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses, net⁽¹⁾		(348	)		(121	)		67			(402	)		(24	)		(14	)		35			(86	)		(89	)
Losses on early extinguishment of debt		—			—			4			4			—			—			—			—			—
Expenses related to restructuring		—			—			—			—			—			—			(1	)		4			3
Taxes on adjustments		73			25			(15	)		83			5			3			(7	)		17			18

ADJUSTED OPERATING INCOME (LOSS)	$	14		$	(5	)	$	(70	)	$	(61	)	$	(115	)	$	(1	)	$	66		$	(5	)	$	(55	)


⁽¹⁾Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below:
Net investment (gains) losses, gross	$	(348	)	$	(118	)	$	70		$	(396	)	$	(23	)	$	(11	)	$	36		$	(84	)	$	(82	)
Adjustment for DAC and other intangible amortization and certain benefit reserves		—			(3	)		(3	)		(6	)		(1	)		(3	)		(1	)		(2	)		(7	)

Net investment (gains) losses, net	$	(348	)	$	(121	)	$	67		$	(402	)	$	(24	)	$	(14	)	$	35		$	(86	)	$	(89	)

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

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

(amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	661		$	649		$	642		$	1,952		$	663		$	652		$	640		$	628		$	2,583
Net investment income		456			422			419			1,297			424			432			428			406			1,690
Net investment gains (losses)		347			129			(55	)		421			19			28			(15	)		80			112
Policy fees and other income		2			—			—			2			—			(2	)		2			—			—

Total revenues		1,466			1,200			1,006			3,672			1,106			1,110			1,055			1,114			4,385

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		901			876			928			2,705			925			916			896			927			3,664
Interest credited		—			—			—			—			—			—			—			—			—
Acquisition and operating expenses, net of deferrals		108			103			101			312			105			106			93			101			405
Amortization of deferred acquisition costs and intangibles		25			21			24			70			25			25			26			25			101
Interest expense		—			—			—			—			—			—			—			—			—

Total benefits and expenses		1,034			1,000			1,053			3,087			1,055			1,047			1,015			1,053			4,170

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		432			200			(47	)		585			51			63			40			61			215
Provision (benefit) for income taxes		99			49			(4	)		144			17			19			15			19			70

INCOME (LOSS) FROM CONTINUING OPERATIONS		333			151			(43	)		441			34			44			25			42			145
ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses		(347	)		(129	)		55			(421	)		(19	)		(28	)		15			(80	)		(112	)
Expenses related to restructuring		—			—			—			—			—			—			(1	)		2			1
Taxes on adjustments		73			26			(11	)		88			4			5			(2	)		16			23

ADJUSTED OPERATING INCOME (LOSS)	$	59		$	48		$	1		$	108		$	19		$	21		$	37		$	(20	)	$	57


RATIOS:
Loss Ratio⁽¹⁾		71	%		69	%		78	%		73	%		76	%		76	%		74	%		81	%		77	%
Gross Benefits Ratio⁽²⁾		136	%		135	%		145	%		139	%		140	%		140	%		140	%		148	%		142	%

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

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

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

(amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	50		$	63		$	76		$	189		$	59		$	65		$	73		$	81		$	278
Net investment income		131			127			130			388			128			133			130			133			524
Net investment gains (losses)		4			5			1			10			6			(2	)		(3	)		10			11
Policy fees and other income		148			140			141			429			150			151			182			148			631

Total revenues		333			335			348			1,016			343			347			382			372			1,444

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		269			289			302			860			335			228			244			242			1,049
Interest credited		57			57			59			173			58			60			58			58			234
Acquisition and operating expenses, net of deferrals		39			34			39			112			39			40			37			34			150
Amortization of deferred acquisition costs and intangibles		52			53			44			149			109			50			28			27			214
Interest expense		—			—			5			5			4			4			4			5			17

Total benefits and expenses		417			433			449			1,299			545			382			371			366			1,664

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(84	)		(98	)		(101	)		(283	)		(202	)		(35	)		11			6			(220	)
Provision (benefit) for income taxes		(18	)		(21	)		(22	)		(61	)		(43	)		(8	)		3			1			(47	)

INCOME (LOSS) FROM CONTINUING OPERATIONS		(66	)		(77	)		(79	)		(222	)		(159	)		(27	)		8			5			(173	)

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses		(4	)		(5	)		(1	)		(10	)		(6	)		2			3			(10	)		(11	)
Losses on early extinguishment of debt		—			—			4			4			—			—			—			—			—
Expenses related to restructuring		—			—			—			—			—			—			—			1			1
Taxes on adjustments		1			1			(1	)		1			1			—			(1	)		2			2

ADJUSTED OPERATING INCOME (LOSS)	$	(69	)	$	(81	)	$	(77	)	$	(227	)	$	(164	)	$	(25	)	$	10		$	(2	)	$	(181	)

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

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

(amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Net investment income		139			143			146			428			153			157			166			162			638
Net investment gains (losses)		(3	)		(16	)		(16	)		(35	)		(2	)		(15	)		(18	)		(6	)		(41	)
Policy fees and other income		2			2			3			7			3			3			3			3			12

Total revenues		138			129			133			400			154			145			151			159			609

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		51			48			67			166			47			81			71			67			266
Interest credited		38			40			41			119			43			46			48			48			185
Acquisition and operating expenses, net of deferrals		11			10			11			32			12			12			12			13			49
Amortization of deferred acquisition costs and intangibles		10			9			19			38			16			14			13			14			57
Interest expense		—			—			—			—			—			—			—			—			—

Total benefits and expenses		110			107			138			355			118			153			144			142			557

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		28			22			(5	)		45			36			(8	)		7			17			52
Provision (benefit) for income taxes		6			5			(1	)		10			7			(1	)		1			4			11

INCOME (LOSS) FROM CONTINUING OPERATIONS		22			17			(4	)		35			29			(7	)		6			13			41

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses, net⁽¹⁾		3			13			13			29			1			12			17			4			34
Expenses related to restructuring		—			—			—			—			—			—			—			1			1
Taxes on adjustments		(1	)		(2	)		(3	)		(6	)		—			(2	)		(4	)		(1	)		(7	)

ADJUSTED OPERATING INCOME	$	24		$	28		$	6		$	58		$	30		$	3		$	19		$	17		$	69


⁽¹⁾ Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below:
Net investment (gains) losses, gross	$	3		$	16		$	16		$	35		$	2		$	15		$	18		$	6		$	41
Adjustment for DAC and other intangible amortization and certain benefit reserves		—			(3	)		(3	)		(6	)		(1	)		(3	)		(1	)		(2	)		(7	)

Net investment (gains) losses, net	$	3		$	13		$	13		$	29		$	1		$	12		$	17		$	4		$	34

Runoff Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Adjusted Operating Income (Loss)—Runoff Segment

(amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q		Total
REVENUES:
Net investment income	$	55		$	54		$	49		$	158		$	45		$	48		$	47		$	47	$	187
Net investment gains (losses)		15			4			(75	)		(56	)		(12	)		(9	)		(4	)		—		(25	)
Policy fees and other income		33			32			33			98			35			35			35			35		140

Total revenues		103			90			7			200			68			74			78			82		302

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		7			4			20			31			5			8			13			1		27
Interest credited		42			42			41			125			37			40			40			41		158
Acquisition and operating expenses, net of deferrals		12			11			13			36			13			13			13			13		52
Amortization of deferred acquisition costs and intangibles		4			(1	)		17			20			2			10			4			2		18

Total benefits and expenses		65			56			91			212			57			71			70			57		255

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		38			34			(84	)		(12	)		11			3			8			25		47
Provision (benefit) for income taxes		8			6			(18	)		(4	)		2			—			1			5		8

INCOME (LOSS) FROM CONTINUING OPERATIONS		30			28			(66	)		(8	)		9			3			7			20		39

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses, net⁽¹⁾		(14	)		(5	)		67			48			10			9			2			—		21
Taxes on adjustments		3			1			(14	)		(10	)		(2	)		(2	)		—			—		(4	)

ADJUSTED OPERATING INCOME (LOSS)	$	19		$	24		$	(13	)	$	30		$	17		$	10		$	9		$	20	$	56


⁽¹⁾ Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below:
Net investment (gains) losses, gross	$	(15	)	$	(4	)	$	75		$	56		$	12		$	9		$	4		$	—	$	25
Adjustment for DAC and other intangible amortization and certain benefit reserves		1			(1	)		(8	)		(8	)		(2	)		—			(2	)		—		(4	)

Net investment (gains) losses, net	$	(14	)	$	(5	)	$	67		$	48		$	10		$	9		$	2		$	—	$	21

Corporate and Other

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Adjusted Operating Loss—Corporate and Other⁽¹⁾

(amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	1		$	2		$	2		$	5		$	2		$	2		$	2		$	2		$	8
Net investment income		5			1			6			12			3			2			2			2			9
Net investment gains (losses)		(10	)		(28	)		46			8			(8	)		5			(7	)		(21	)		(31	)
Policy fees and other income		(2	)		(1	)		1			(2	)		(1	)		2			—			1			2

Total revenues		(6	)		(26	)		55			23			(4	)		11			(3	)		(16	)		(12	)

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		—			2			1			3			1			—			1			1			3
Acquisition and operating expenses, net of deferrals		6			—			18			24			12			8			13			13			46
Amortization of deferred acquisition costs and intangibles		—			1			—			1			2			1			—			—			3
Interest expense		41			42			46			129			54			53			54			53			214

Total benefits and expenses		47			45			65			157			69			62			68			67			266

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(53	)		(71	)		(10	)		(134	)		(73	)		(51	)		(71	)		(83	)		(278	)
Provision (benefit) for income taxes		3			(12	)		2			(7	)		(16	)		(21	)		(7	)		(9	)		(53	)

LOSS FROM CONTINUING OPERATIONS		(56	)		(59	)		(12	)		(127	)		(57	)		(30	)		(64	)		(74	)		(225	)

ADJUSTMENTS TO LOSS FROM CONTINUING OPERATIONS:
Net investment (gains) losses		10			28			(46	)		(8	)		8			(5	)		7			21			31
(Gains) losses on early extinguishment of debt		—			(3	)		8			5			—			—			—			—			—
Expenses related to restructuring		—			1			1			2			—			—			1			—			1
Taxes on adjustments		(3	)		(5	)		8			—			(1	)		—			(1	)		(5	)		(7	)

ADJUSTED OPERATING LOSS	$	(49	)	$	(38	)	$	(41	)	$	(128	)	$	(50	)	$	(35	)	$	(57	)	$	(58	)	$	(200	)

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

Additional Financial Data

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Investments Summary

(amounts in millions)


		September 30, 2020					June 30, 2020					March 31, 2020					December 31, 2019					September 30, 2019
		Carrying Amount		% of Total			Carrying Amount		% of Total			Carrying Amount		% of Total			Carrying Amount		% of Total			Carrying Amount		% of Total
Composition of Investment Portfolio
Fixed maturity securities:
Investment grade:
Public fixed maturity securities⁽¹⁾		$	35,637		44	%	$	35,802		45	%	$	33,056		46	%	$	33,684		45	%	$	34,280		46	%
Private fixed maturity securities			14,444		18			13,952		18			12,736		17			13,384		18			13,411		18
Residential mortgage-backed securities⁽²⁾			2,042		3			2,151		3			2,243		3			2,232		3			2,335		3
Commercial mortgage-backed securities			2,957		4			2,952		4			2,963		4			3,006		4			3,051		4
Other asset-backed securities			3,241		4			2,921		4			3,061		4			3,257		4			3,337		5
State and political subdivisions⁽¹⁾			3,115		4			2,998		4			2,864		4			2,747		4			2,729		4
Non-investment grade fixed maturity securities			2,980		4			2,768		4			2,128		3			2,029		3			2,090		3
Equity securities:
Common stocks and mutual funds			529		1			104		—			91		—			105		—			107		—
Preferred stocks			100		—			102		—			97		—			134		—			132		—
Commercial mortgage loans, net			6,880		8			6,917		9			6,915		10			6,963		9			7,033		10
Policy loans			2,153		3			2,182		3			2,052		3			2,058		3			2,069		3
Cash, cash equivalents, restricted cash and short-term investments			3,054		4			2,809		3			2,696		3			3,601		5			1,839		2
Securities lending			75		—			59		—			58		—			51		—			62		—
Other invested assets:	Limited partnerships		844		1			764		1			671		1			634		1			565		1
	Derivatives:
	Interest rate swaps		708		1			939		1			1,002		1			197		—			402		1
	Foreign currency swaps		10		—			17		—			21		—			4		—			10		—
	Equity index options		67		—			66		—			62		—			81		—			62		—
	Other foreign currency contracts		19		—			2		—			16		—			8		—			13		—
	Other		405		1			414		1			422		1			397		1			369		—

Total invested assets and cash		$	79,260		100	%	$	77,919		100	%	$	73,154		100	%	$	74,572		100	%	$	73,896		100	%

Public Fixed Maturity Securities - Credit Quality:
NRSRO⁽³⁾ Designation
AAA		$	9,732		22	%	$	10,805		25	%	$	11,025		27	%	$	10,160		24	%	$	10,561		25	%
AA			3,788		8			3,636		8			3,554		8			3,536		8			3,758		9
A			12,094		27			11,970		27			11,268		27			12,315		29			12,040		28
BBB			17,497		39			16,780		37			14,807		35			15,041		36			15,418		35
BB			1,616		4			1,506		3			1,139		3			1,040		3			1,093		3
B			71		—			73		—			50		—			44		—			53		—
CCC and lower			42		—			24		—			21		—			26		—			25		—

Total public fixed maturity securities		$	44,840		100	%	$	44,794		100	%	$	41,864		100	%	$	42,162		100	%	$	42,948		100	%

Private Fixed Maturity Securities - Credit Quality:
NRSRO⁽³⁾ Designation
AAA		$	1,610		8	%	$	1,526		8	%	$	1,382		8	%	$	1,536		8	%	$	1,594		9	%
AA			2,342		12			2,209		12			2,090		12			2,235		12			2,254		12
A			5,522		28			5,320		28			4,914		28			5,182		29			5,296		29
BBB			8,851		46			8,530		46			7,883		46			8,305		46			8,222		45
BB			1,054		5			994		5			819		5			844		5			851		5
B			183		1			160		1			98		1			73		—			66		—
CCC and lower			14		—			11		—			1		—			2		—			2		—

Total private fixed maturity securities		$	19,576		100	%	$	18,750		100	%	$	17,187		100	%	$	18,177		100	%	$	18,285		100	%

⁽¹⁾	Certain fixed maturity securities balances have been reclassified as of December 31, 2019 to conform to the current period presentation.

⁽²⁾	The company does not have any material exposure to residential mortgage-backed securities collateralized debt obligations (CDOs).

⁽³⁾	Nationally Recognized Statistical Rating Organizations.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Fixed Maturity Securities Summary

(amounts in millions)


	September 30, 2020					June 30, 2020					March 31, 2020					December 31, 2019					September 30, 2019
	Fair Value		% of Total			Fair Value		% of Total			Fair Value		% of Total			Fair Value		% of Total			Fair Value		% of Total
Fixed Maturity Securities - Security Sector:

U.S. government, agencies and government-sponsored enterprises	$	4,792		7	%	$	5,602		9	%	$	5,771		10	%	$	5,025		8	%	$	5,254		9	%
State and political subdivisions⁽¹⁾		3,115		5			2,998		5			2,864		5			2,747		5			2,729		4
Foreign government		1,395		2			1,542		2			1,201		2			1,350		2			1,359		2
U.S. corporate⁽¹⁾		35,234		55			34,395		54			31,077		52			32,111		54			32,424		54
Foreign corporate		11,543		18			10,885		17			9,799		17			10,525		17			10,656		17
Residential mortgage-backed securities		2,075		3			2,184		3			2,273		4			2,270		4			2,375		4
Commercial mortgage-backed securities		2,976		5			2,970		5			2,981		5			3,026		5			3,071		5
Other asset-backed securities		3,286		5			2,968		5			3,085		5			3,285		5			3,365		5

Total fixed maturity securities	$	64,416		100	%	$	63,544		100	%	$	59,051		100	%	$	60,339		100	%	$	61,233		100	%

Corporate Bond Holdings - Industry Sector:

Investment Grade:
Finance and insurance	$	11,064		24	%	$	10,611		23	%	$	9,523		23	%	$	9,881		23	%	$	9,995		22	%
Utilities		6,057		13			6,052		13			5,555		14			5,743		14			5,868		14
Energy		3,372		7			3,193		7			2,799		7			3,699		9			3,801		9
Consumer - non-cyclical		6,954		15			6,836		15			6,163		15			6,247		15			6,293		15
Consumer - cyclical		2,131		5			2,076		5			1,856		4			1,937		5			2,003		5
Capital goods		3,531		7			3,511		8			3,076		8			3,161		7			3,243		8
Industrial		2,279		5			2,210		5			2,063		5			2,201		5			2,188		5
Technology and communications		4,331		9			4,221		9			3,966		10			3,966		9			3,919		9
Transportation		2,173		5			2,151		5			2,047		5			2,127		5			2,189		5
Other⁽¹⁾		2,086		4			1,847		4			1,855		4			1,839		4			1,691		4

Subtotal		43,978		94			42,708		94			38,903		95			40,801		96			41,190		96


Non-Investment Grade:
Finance and insurance		289		1			258		1			211		1			212		1			208		—
Utilities		95		—			97		—			77		—			83		—			85		—
Energy		741		2			676		1			391		1			319		1			346		1
Consumer - non-cyclical		220		—			218		1			196		1			138		—			138		—
Consumer - cyclical		349		1			297		1			225		1			220		1			233		1
Capital goods		152		—			130		—			149		—			155		—			137		—
Industrial		340		1			288		1			193		—			183		—			224		1
Technology and communications		452		1			437		1			418		1			417		1			425		1
Transportation		56		—			49		—			29		—			8		—			8		—
Other		105		—			122		—			84		—			100		—			86		—

Subtotal		2,799		6			2,572		6			1,973		5			1,835		4			1,890		4

Total	$	46,777		100	%	$	45,280		100	%	$	40,876		100	%	$	42,636		100	%	$	43,080		100	%

Fixed Maturity Securities - Contractual Maturity Dates:

Due in one year or less	$	1,499		2	%	$	1,517		2	%	$	1,421		2	%	$	1,434		2	%	$	1,587		3	%
Due after one year through five years		10,265		16			10,054		16			8,949		15			9,381		16			9,655		16
Due after five years through ten years		14,863		23			14,478		23			12,642		21			12,296		20			12,387		20
Due after ten years		29,452		46			29,373		46			27,700		48			28,647		48			28,793		47

Subtotal		56,079		87			55,422		87			50,712		86			51,758		86			52,422		86
Mortgage and asset-backed securities		8,337		13			8,122		13			8,339		14			8,581		14			8,811		14

Total fixed maturity securities	$	64,416		100	%	$	63,544		100	%	$	59,051		100	%	$	60,339		100	%	$	61,233		100	%

⁽¹⁾	Certain fixed maturity securities balances have been reclassified as of December 31, 2019 to conform to the current period presentation.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

General Account U.S. GAAP Net Investment Income Yields

(amounts in millions)


	2020												2019
		3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
U.S. GAAP Net Investment Income
Fixed maturity securities - taxable	$	632		$	601		$	622		$	1,855		$	616		$	631		$	634		$	613		$	2,494
Fixed maturity securities - non-taxable		2			1			2			5			2			2			2			2			8
Equity securities		3			2			2			7			3			4			5			4			16
Commercial mortgage loans		82			84			85			251			94			87			85			82			348
Other invested assets		57			52			49			158			50			49			47			44			190
Limited partnerships		22			14			(2	)		34			4			13			12			15			44
Policy loans		51			49			49			149			42			47			45			46			180
Cash, cash equivalents, restricted cash and short-term investments		2			4			11			17			9			8			11			11			39

Gross investment income before expenses and fees		851			807			818			2,476			820			841			841			817			3,319
Expenses and fees		(24	)		(21	)		(25	)		(70	)		(26	)		(25	)		(25	)		(23	)		(99	)

Net investment income	$	827		$	786		$	793		$	2,406		$	794		$	816		$	816		$	794		$	3,220

Annualized Yields
Fixed maturity securities - taxable		4.6	%		4.4	%		4.6	%		4.6	%		4.6	%		4.7	%		4.7	%		4.6	%		4.6	%
Fixed maturity securities - non-taxable		6.2	%		2.6	%		5.2	%		4.7	%		6.0	%		6.1	%		6.1	%		6.1	%		6.1	%
Equity securities		2.9	%		4.1	%		3.8	%		3.0	%		5.0	%		6.4	%		7.8	%		6.1	%		6.3	%
Commercial mortgage loans		4.8	%		4.9	%		4.9	%		4.8	%		5.4	%		5.0	%		4.9	%		4.8	%		5.0	%
Other invested assets⁽¹⁾		55.7	%		49.8	%		47.8	%		51.4	%		52.2	%		54.0	%		56.1	%		65.7	%		57.2	%
Limited partnerships⁽²⁾		10.9	%		7.8	%		(1.2	)%		6.2	%		2.7	%		9.7	%		9.9	%		13.8	%		8.5	%
Policy loans		9.4	%		9.3	%		9.5	%		9.4	%		8.1	%		9.1	%		8.8	%		9.5	%		8.9	%
Cash, cash equivalents, restricted cash and short-term investments		0.3	%		0.6	%		1.4	%		0.7	%		1.3	%		1.7	%		2.2	%		2.1	%		1.7	%

Gross investment income before expenses and fees		5.0	%		4.8	%		4.9	%		4.9	%		4.9	%		5.1	%		5.1	%		5.0	%		5.0	%
Expenses and fees		(0.2	)%		(0.1	)%		(0.2	)%		(0.2	)%		(0.2	)%		(0.2	)%		(0.1	)%		(0.2	)%		(0.1	)%

Net investment income		4.8	%		4.7	%		4.7	%		4.7	%		4.7	%		4.9	%		5.0	%		4.8	%		4.9	%

Yields are based on net investment income as reported under U.S. GAAP and are consistent with how the company measures its investment performance for management purposes. Yields are annualized, for interim periods, and are calculated as net investment income as a percentage of average quarterly asset carrying values except for fixed maturity securities, derivatives and derivative counterparty collateral, which exclude unrealized fair value adjustments and securities lending activity, which is included in other invested assets and is calculated net of the corresponding securities lending liability. See page 44 herein for average invested assets and cash used in the yield calculation.

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

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Net Investment Gains (Losses), Net—Detail

(amounts in millions)


	2020												2019
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net realized gains (losses) on available-for-sale securities:
Fixed maturity securities:
U.S. corporate	$	2		$	2		$	2		$	6		$	(2	)	$	11		$	(16	)	$	30		$	23
U.S. government, agencies and government-sponsored enterprises		316			94			—			410			—			—			2			33			35
Foreign corporate		1			4			—			5			1			1			(1	)		(1	)		—
Foreign government		12			10			5			27			4			2			2			—			8
Mortgage-backed securities		—			4			—			4			—			1			1			(2	)		—
Asset-backed securities		—			(2	)		—			(2	)		—			—			—			(1	)		(1	)
Foreign exchange		(1	)		2			6			7			2			1			1			(1	)		3

Total net realized gains (losses) on available-for-sale securities		330			114			13			457			5			16			(11	)		58			68

Impairments:
Bank loans		—			—			—			—			(1	)		—			—			—			(1	)

Total impairments		—			—			—			—			(1	)		—			—			—			(1	)

Net change in allowance for credit losses on available-for-sale fixed maturity securities		2			(7	)		—			(5	)		—			—			—			—			—
Write-down of available-for-sale fixed maturity securities		(4	)		—			—			(4	)		—			—			—			—			—
Net realized gains (losses) on equity securities sold		(3	)		—			—			(3	)		—			6			—			3			9
Net unrealized gains (losses) on equity securities still held		3			9			(19	)		(7	)		1			(4	)		5			12			14
Limited partnerships		31			37			(40	)		28			19			6			(11	)		15			29
Commercial mortgage loans		(3	)		1			—			(2	)		(1	)		(1	)		1			(1	)		(2	)
Derivative instruments		22			10			(105	)		(73	)		(1	)		(29	)		(30	)		(12	)		(72	)
Other		(3	)		(5	)		(1	)		(9	)		1			4			—			—			5

Net investment gains (losses), gross		375			159			(152	)		382			23			(2	)		(46	)		75			50
Adjustment for DAC and other intangible amortization and certain benefit reserves		(1	)		4			11			14			3			3			3			2			11
Adjustment for net investment (gains) losses attributable to noncontrolling interests		(12	)		(32	)		26			(18	)		(9	)		4			—			(6	)		(11	)

Net investment gains (losses), net	$	362		$	131		$	(115	)	$	378		$	17		$	5		$	(43	)	$	71		$	50

Reconciliations of Non-GAAP Measures

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Reconciliation of Operating ROE

(amounts in millions)


Twelve Month Rolling Average ROE	Twelve months ended
U.S. GAAP Basis ROE	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Net income (loss) available to Genworth Financial, Inc.’s common stockholders for the twelve months ended⁽¹⁾	$	(106	)	$	(506	)	$	103		$	343		$	31
Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income⁽²⁾	$	10,592		$	10,618		$	10,695		$	10,650		$	10,646
U.S. GAAP Basis ROE^(1)/(2)		(1.0	)%		(4.8	)%		1.0	%		3.2	%		0.3	%

Operating ROE
Adjusted operating income for the twelve months ended⁽¹⁾	$	168		$	159		$	358		$	420		$	91
Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income⁽²⁾	$	10,592		$	10,618		$	10,695		$	10,650		$	10,646
Operating ROE^(1)/(2)		1.6	%		1.5	%		3.3	%		3.9	%		0.9	%

Quarterly Average ROE	Three months ended
U.S. GAAP Basis ROE	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Net income (loss) available to Genworth Financial, Inc.’s common stockholders for the period ended⁽³⁾	$	418		$	(441	)	$	(66	)	$	(17	)	$	18
Quarterly average Genworth Financial, Inc.’s stockholders’ equity for the period, excluding accumulated other comprehensive income⁽⁴⁾	$	10,625		$	10,415		$	10,693		$	10,759		$	10,755
Annualized U.S. GAAP Quarterly Basis ROE^(3)/(4)		15.7	%		(16.9	)%		(2.5	)%		(0.6	)%		0.7	%

Operating ROE
Adjusted operating income (loss) for the period ended⁽³⁾	$	132		$	(21	)	$	33		$	24		$	123
Quarterly average Genworth Financial, Inc.’s stockholders’ equity for the period, excluding accumulated other comprehensive income⁽⁴⁾	$	10,625		$	10,415		$	10,693		$	10,759		$	10,755
Annualized Operating Quarterly Basis ROE^(3)/(4)		5.0	%		(0.8	)%		1.2	%		0.9	%		4.6	%

Non-GAAP Definition for Operating ROE

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

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

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

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

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Reconciliation of Reported Yield to Core Yield


		2020												2019
	(Assets - amounts in billions)		3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
	Reported - Total Invested Assets and Cash	$	79.3		$	77.9		$	73.2		$	79.3		$	74.6		$	73.9		$	72.0		$	69.5		$	74.6
	Subtract:
	Securities lending		0.1			0.1			0.1			0.1			0.1			0.1			0.1			0.1			0.1
	Unrealized gains (losses)		10.0			9.7			6.0			10.0			6.9			7.5			5.7			3.7			6.9

	Adjusted end of period invested assets and cash	$	69.2		$	68.1		$	67.1		$	69.2		$	67.6		$	66.3		$	66.2		$	65.7		$	67.6

(A)	Average Invested Assets and Cash Used in Reported and Core Yield Calculation	$	68.7		$	67.6		$	67.3		$	68.0		$	66.9		$	66.2		$	66.0		$	65.7		$	66.3

	(Income - amounts in millions)

(B)	Reported - Net Investment Income	$	827		$	786		$	793		$	2,406		$	794		$	816		$	816		$	794		$	3,220
	Subtract:
	Bond calls and commercial mortgage loan prepayments		23			8			16			47			23			13			7			6			49
	Other non-core items⁽¹⁾		6			2			7			15			(2	)		8			7			2			15

(C)	Core Net Investment Income	$	798		$	776		$	770		$	2,344		$	773		$	795		$	802		$	786		$	3,156


(B) / (A)	Reported Yield		4.82	%		4.65	%		4.71	%		4.72	%		4.74	%		4.93	%		4.95	%		4.83	%		4.86	%
(C) / (A)	Core Yield		4.65	%		4.59	%		4.57	%		4.60	%		4.62	%		4.80	%		4.86	%		4.79	%		4.76	%

Note: Yields have been annualized.

Non-GAAP Definition for Core Yield

The company references the non-GAAP financial measure entitled “core yield” as a measure of investment yield. The company defines core yield as the investment yield adjusted for items that do not reflect the underlying performance of the investment portfolio. Management believes that analysis of core yield enhances understanding of the investment yield of the company. However, core yield is not a substitute for investment yield determined in accordance with U.S. GAAP.

⁽¹⁾	Includes cost basis adjustments on structured securities and various other immaterial items.

Corporate Information

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2020

Financial Strength Ratings As Of November 3, 2020


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

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

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

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

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

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

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

S&P, Moody’s, A.M. Best, Fitch and HR Ratings review their ratings periodically and the company cannot assure you that it will maintain the current ratings in the future. These and other agencies may also rate the company or its insurance subsidiaries on a solicited or an unsolicited basis. The company does not provide information to agencies issuing unsolicited ratings and cannot ensure that any agencies that rate the company or its insurance subsidiaries on an unsolicited basis will continue to do so.

⁽¹⁾	Genworth Financial Mortgage Insurance Pty Limited (Australia) is also rated “A” by Fitch.

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