Skip to content
    GNW
    Earnings call· Mar 2026(Q1 FY26)

    GENWORTH FINANCIAL Q1 FY26 earnings call GNW

    May 6, 2026 Source

    Executive summary

    Genworth Financial Q1 FY26 — Strong ANAC Performance Fuels Capital Returns and CareScout Growth

    Genworth Financial reported strong Q1 FY26 results driven by ANAC's performance, which continues to fund capital returns and strategic investments in CareScout. The company is refining its reporting to exclude the Closed Block's GAAP volatility, emphasizing its self-sustaining nature while focusing on long-term growth opportunities through CareScout's expanding network and product offerings. Management remains committed to disciplined capital allocation and liability management amidst a dynamic macroeconomic environment.

    Highlights

    5

    • Adjusted operating income, excluding the closed block, was $109 million in Q1 FY26.

    • ANAC delivered strong performance with adjusted operating income of $140 million to Genworth.

    • Received $99 million in total capital returns from ANAC in Q1 FY26.

    • Repurchased $66 million of shares at an average price of $8.61 per share in Q1 FY26, with an additional $19 million through April 30.

    • CareScout facilitated approximately 1,500 matches in Q1 FY26, reflecting strong sequential and year-over-year growth.

    Concerns

    4

    • Closed Block segment reported an adjusted operating loss of $32 million in Q1 FY26.

    • Closed Block AE losses are expected to be approximately $300 million for the full year 2026.

    • Corporate and Other reported an adjusted operating loss of $31 million for the quarter.

    • Modest decline in GLIC's estimated RBC ratio to 289% at quarter end from 300% at year-end 2025.

    Guidance & targets

    10
    CategoryTargetConfidence
    Adjusted Operating Income (Closed Block)
    approximately $300 million in losses
    medium materiality
    High
    MRAP Economic Value (NPV)
    approximately $1 billion
    high materiality
    High
    ANAC Capital Returns to Genworth
    around $405 million
    high materiality
    High
    Share Repurchases
    $195 million and $225 million
    high materiality
    High
    CareScout Matches
    approximately 7,500 matches
    medium materiality
    High
    CareScout Service Revenue
    $25 million
    medium materiality
    High
    CareScout Services Investment
    $50 million to $55 million
    medium materiality
    High
    CareScout Insurance Investment
    no additional investments
    medium materiality
    High
    CareScout Quality Network (CQN) Senior Living Communities
    approximately 2,000
    low materiality
    High
    CareScout Quality Network (CQN) Home Care Locations
    more than 1,000
    low materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    ANAC
    ANAC delivered strong performance, contributing significantly to Genworth's adjusted operating income. New insurance written decreased sequentially due to seasonal trends but increased year-over-year. The PMIERs sufficiency ratio remained strong, and the segment provided $99 million in capital returns to Genworth.
    Adjusted Operating Income: $140 millionNew Insurance Written: $13 billionPrimary Insurance In Force: $272 billionEarned Premiums: $243 millionLoss Ratio: 15%PMIERs Sufficiency Ratio: 162%Genworth's Share of ANAC Book Value (including AOCI): $4.3 billion
    		———$140 million
    Corporate and Other
    The adjusted operating loss reflects continued investment in CareScout and ongoing holding company debt service. The prior quarter included a benefit from favorable tax-related items.
    Adjusted Operating Loss: $31 million
    		———($31 million)
    Closed Block
    The adjusted operating loss was driven by a liability remeasurement loss related to actual variances from expected experience (AE), primarily in LTC. This was partially offset by favorable net insurance recoveries. Mortality was seasonally higher sequentially but lower than the prior year.
    Adjusted Operating Loss: $32 millionLiability Remeasurement Loss (AE): $36 million pretaxNet Insurance Recoveries: $65 million pretax
    		———($32 million)

    Operational metrics

    14
    Holding Company Cash and Liquid Assets
    $166 million
    Q1 FY26

    Excluding $50 million held for future obligations, for capital allocation purposes.

    Share Repurchases Executed
    $66 million
    Q1 FY26

    Additional $19 million repurchased through April 30.

    Total Share Repurchases Since Authorization
    $875 million
    Since program inception

    Since the initial authorization of the current buyback program.

    Principal Debt Retired
    $5 million
    Q1 FY26

    Bringing holding company debt down to $778 million.

    Holding Company Debt
    $778 million
    Q1 FY26

    After retiring $5 million of principal debt in the quarter.

    Cash Interest Coverage Ratio (Debt Service)
    9x
    Q1 FY26

    Reflects disciplined capital structure.

    New Money Yields (Life Insurance Companies)
    6.3%
    Q1 FY26

    Cash in life insurance companies being invested at this yield.

    Alternative Assets Targeted Returns
    12%
    Ongoing

    Largely comprised of diversified private equity investments.

    CareScout Quality Network (CQN) Home Care Coverage
    97%
    Q1 FY26

    Coverage of the U.S. population aged 65 and older.

    CareScout Matches Facilitated
    1,500strong sequential and year-over-year growth
    Q1 FY26

    Includes direct-to-consumer matches in both home care and senior living communities.

    CareScout Service Revenue
    $6 million
    Q1 FY26

    Revenue generated in the first quarter.

    Exposure to 5% Compound Benefit Inflation Option
    36%down from 57% in 2014
    Q1 FY26

    Reduced exposure to riskiest LTC policy features.

    Policies with Lifetime Benefits
    11%
    Q1 FY26

    Percentage of policies with lifetime benefits has decreased.

    AXA Litigation Recovery (Estimated)
    $750 million
    Future

    Potential recovery if judgment is upheld and appeals are favorably resolved.

    Industry KPIs

    8
    MetricValueDetails
    Capital returns$99 millionUSD
    Book value per share$4.3 billionUSD
    Net investment income6.3%%
    Retention persistency61%%
    Life specific when present$13 billionUSD
    Net premiums written earned$243 millionUSD
    Renewal rate change pricing$5 millionUSD
    Statutory regulatory capital289%%

    Product announcements

    3
    ProductTypeDetails
    CareAssurancelaunch
    CareAssurance worksite productlaunch
    Hybrid LTC insurance productsroadmap

    Deals & partnerships

    3
    seniorIntegration of senior living communities into CareScout Quality Network.

    Integrating senior living communities from the acquisition of senior to build a more comprehensive network.

    other LTC insurance carriersLeveraging CareScout Quality Network for other closed LTC blocks.

    Working with other carriers managing closed LTC blocks to integrate their policyholders into the CareScout Quality Network.

    select affinity groupsIntroducing consumers to CareScout brand and platform.

    Partnering with affinity groups to extend CareScout's platform beyond Genworth.

    Risks & headwinds

    4
    Macroeconomic backdrop2026 and beyond

    uneven consumer spending, potential for higher inflation and interest rates

    Mitigation: Genworth is well positioned to navigate a range of market conditions, operating from a position of strength with disciplined underwriting and strong capital position, providing strong free cash flow.

    Closed Block AE lossesFY26

    approximately $300 million for the full year 2026

    Mitigation: Management emphasizes that GAAP fluctuations do not impact cash flows, economic value, or how the business is managed. Focus on MRAP and CareScout to manage long-term sustainability.

    AXA litigation uncertainty3 to 6 months after July 21-23 appeal hearing

    potential recovery of approximately $750 million, but subject to appeal decision

    Mitigation: Potential recoveries are not factored into capital allocation plans; if received, proceeds will be deployed in line with existing priorities (CareScout, shareholder returns, debt reduction).

    GLIC RBC ratio declineQ1 FY26

    RBC ratio of 289% at quarter end, down from 300% at year-end 2025

    Mitigation: Target RBC is 250% or more, current ratio is well above regulatory requirements. Strategy relies on MRAP, Benefit Solutions, Live Well Age Well program, and CareScout Quality Network to bolster RBC and statutory results.

    What to watch in Q2 FY26

    5

    AXA Litigation Decision

    within 3 to 6 months of hearing
    CurrentAppeal hearing scheduled for July 21-23
    TargetCourt of Appeal decision

    Why it matters

    A favorable resolution could result in a significant cash recovery of approximately $750 million, impacting capital allocation.

    The appeal hearing is scheduled for July 21 through 23. We expect the Court of Appeal to reach a decision within approximately 3 to 6 months of adhering.

    Q&A highlights

    2

    The analyst noted a modest decline in GLIC's estimated RBC ratio and asked if there's a specific level that would force or prompt capital contributions, or if there are other levers to bolster RBC without capital contributions.

    Management stated their target RBC is 250% or more, and they are comfortable with the current 289% ratio, which is well above regulatory requirements. They reiterated that no capital contributions are planned and highlighted that the strategy relies on the Multiyear Rate Action Plan (MRAP), Benefit Solutions, Live Well Age Well program, and CareScout Quality Network to drive RBC and statutory results.

    “Our target is to have RBC at 2.50% or more. And so we're very comfortable with where we are. Obviously, there -- the RBC did go down in the first quarter because of the statutory loss but that's where we have quite a bit of room. There's no requirement from a regulatory perspective. I mean, we're well above at almost 3x required capital, what the regulators require.”

    asked by Joshua Esterov · answered by Thomas McInerney

    2 min read6 chapters

    Detailed Narrative

    01

    New Reporting Structure for Core Operating Earnings

    Genworth has updated its presentation of core operating earnings to exclude the Closed Block of legacy insurance products. This new view aims to better align with the company's strategy and capital allocation framework, focusing on driving current and future shareholder returns through ANAC and long-term growth opportunities with CareScout. The adjusted operating income for the Closed Block will continue to be reported separately, acknowledging its self-sustaining nature and the GAAP volatility that does not reflect its underlying economics.

    02

    CareScout Growth and Strategic Expansion

    CareScout is expanding its Quality Network (CQN) across both home care and senior living communities, adding its first senior living communities in Q1 FY26. The network now covers approximately 97% of the U.S. population aged 65 and older for home care. CareScout facilitated about 1,500 matches in the quarter, including direct-to-consumer matches, and is on track for 7,500 matches and $25 million in service revenues for FY26. The company is also scaling fee-for-service offerings and developing new products like CareAssurance and hybrid LTC insurance.

    03

    Multiyear Rate Action Plan (MRAP) Progress

    The MRAP continues to be a critical lever for the self-sustainability of the Closed Block. In Q1 FY26, Genworth secured $5 million in gross incremental premium approvals, with an additional $45 million achieved in Q2. Since 2012, the program has generated approximately $34.5 billion in net present value through premium increases and benefit reductions. The company expects FY26 premium approvals and benefit reductions to be broadly in line with 2025 levels, contributing about $1 billion of economic value.

    04

    AXA Litigation Update and Potential Recovery

    The appeal hearing for the AXA litigation is scheduled for July 21-23, with a decision expected within 3 to 6 months thereafter. If the judgment is upheld and appeals are favorably resolved, Genworth anticipates recovering approximately $750 million, subject to exchange rates, with no expected tax implications. Any proceeds from this recovery are not factored into current capital allocation plans but would be deployed towards CareScout investments, shareholder returns, and debt reduction.

    05

    Investment Portfolio and Capital Allocation

    Genworth's investment portfolio is conservatively positioned with a majority in investment-grade fixed maturities. New money yields for life insurance companies are approximately 6.3% for the quarter. The alternative assets program, largely diversified private equity, targets returns of about 12%. Capital allocation priorities remain investing in CareScout, returning cash to shareholders through share repurchases (targeting $195M-$225M for FY26), and opportunistically retiring debt, with $5 million of principal debt retired in Q1 FY26.

    06

    AI and Technology Integration

    Genworth is actively integrating new technology and operational capabilities, including artificial intelligence and generative AI initiatives, across the organization. These efforts, in partnership with key partners, are focused on improving efficiencies in client management, enhancing policyholder and customer service, and supporting scalable growth for CareScout. The approach emphasizes tech-enabled human-centered support throughout the aging journey.

    AI-generated summary of the company’s earnings call. Not investment advice.