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Genworth (GNW) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Financials· Aug 6, 2026

Source: earnings call transcript

Executive summary

Genworth Q2 FY26 — Strong Enact Performance and CareScout Expansion Offset Closed Block A/E Losses

Genworth navigated a leadership transition with continuity, driven by robust performance from Enact and strategic expansion of its CareScout aging care platform. While the Closed Block experienced higher-than-expected liability remeasurement losses, management remains focused on its long-term sustainability and disciplined capital allocation, including increased share repurchases. The company is also awaiting a decision on the AXA litigation, which could provide significant recovery.

Highlights

5

  • Enact delivered strong adjusted operating income of $143 million in Q2 FY26.

  • Genworth received $103 million in capital returns from Enact during Q2 FY26.

  • The company has repurchased approximately $922 million worth of shares at an average price of $6.48 per share since May 2022.

  • CareScout expanded its network to include over 1,100 home care locations and doubled local advisors with representation in 26 states.

  • CareScout facilitated approximately 2,950 matches in H1 FY26, more than double the prior year.

Concerns

3

  • The Closed Block segment reported an adjusted operating loss of $110 million, driven by a $127 million pretax liability remeasurement loss.

  • Full year A/E losses for the Closed Block could be higher than the $300 million expectation if current trends continue.

  • CareScout Services match volumes are pacing below the full year target of approximately 7,500.

Guidance & targets

CategoryTargetConfidence
Enact Capital Returns to Genworth
$445 million to $485 million
high materiality
High
Share Repurchases
$225 million to $250 million
high materiality
High
CareScout Services Matches
approximately 7,500
medium materiality
Medium
CareScout Services Revenue
$25 million
medium materiality
High
CareScout Services Investment
$50 million to $55 million
medium materiality
High
CareScout Insurance Capital Investment
no additional capital investment
medium materiality
High
MYRAP Premium Approvals and Benefit Reductions
broadly in line with 2025 levels
high materiality
High
AXA Litigation Recovery
approximately $750 million
high materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Enact
Enact delivered strong performance, driven by continued strong cure performance and loss mitigation activities. New insurance written was seasonally higher, and primary insurance in force increased due to new business and elevated persistency. The PMIERs sufficiency ratio remained robust.
Adjusted operating income: $143 millionNew insurance written: $15 billionPrimary insurance in force: $274 billionPrimary insurance in force growth YoY: 2%Earned premiums: $245 millionPretax reserve release: $37 millionLoss ratio: 14%PMIERs sufficiency ratio: 161%PMIERs excess above requirements: ~$1.9 billionGenworth's share of Enact's book value (including AOCI): $4.4 billion
———$143 million
Corporate & Other
The adjusted operating loss reflects debt service costs and the growing CareScout business.
Adjusted operating loss: $31 million
———($31 million)
Closed Block
The adjusted operating loss was primarily driven by a liability remeasurement loss in LTC. The A/E loss experience in H1 FY26 has trended above the full year expectation. The MYRAP continues to secure premium approvals and benefit reductions, reducing exposure to higher-cost policy features.
Adjusted operating loss: $110 millionLiability remeasurement loss (pretax): $127 millionAggregate benefit reductions and premium increases (NPV since 2012): ~$34.8 billionQ2 FY26 gross incremental premium approvals: $46 millionJuly additional premium approvals: $27 millionPolicyholders electing benefit reduction (cumulative): 62%Exposure to 5% compound benefit inflation option: 35% (down from 57% in 2014)Percentage of policies with lifetime benefits: 11% (down from 24% in 2014)
———($110 million)

GNW operating KPIs by quarter

GNW operating KPIs stated on its earnings calls, by fiscal quarter
KPI Dec 2025 Q4 FY25 Mar 2026 Q1 FY26This call Jun 2026 Q2 FY26Change vs prior quarter
CareScout matches CareScout Services
925 The team executed well in the fourth quarter, facilitating 925 matches between LTC policyholders and home care providers in our network. Source: earnings call transcript
~1,500 We facilitated approximately 1,500 matches between care seekers and providers in the first quarter reflecting strong sequential and year-over-year growth. Source: earnings call transcript
~1,450 We facilitated approximately 1,450 matches between care seekers and providers in the second quarter, bringing total matches for the first half of the year to approximately 2,950, over double the number of matches achieved in the first half of 2025. Source: earnings call transcript
—
New insurance written Enact
$14B New insurance written of $14 billion in the quarter increased versus the prior quarter and prior year. Source: earnings call transcript
$13B New insurance written of $13 billion in the quarter decreased versus the prior quarter, primarily based on seasonal trends but increased versus the prior year as a result of lower interest rates early in the quarter. Source: earnings call transcript
$15B New insurance written of $15 billion in the quarter was seasonally higher than the prior quarter, an increase versus the prior year as a result of a larger estimated market size. Source: earnings call transcript
+15.4%
Primary insurance in-force Enact
$273B Primary insurance in-force grew slightly year-over-year to $273 billion, supported by both the growth in new insurance written and continued elevated persistency. Source: earnings call transcript
$272B Primary insurance in force increased year-over-year to $272 billion supported by the growth in new insurance written and continued elevated persistency. Source: earnings call transcript
$274B Primary insurance in force increased 2% year-over-year to $274 billion, supported by new insurance written and continued elevated persistency. Source: earnings call transcript
+0.7%
PMIERs sufficiency ratio Enact
162% Enact's estimated PMIERs sufficiency ratio remained strong at 162% or approximately $1.9 billion above requirements. Source: earnings call transcript
162% In Act estimated PMIERs sufficiency ratio remained strong at 162% or approximately $1.9 billion above requirements. Source: earnings call transcript
161% Enact's estimated PMIERs sufficiency ratio remained strong at 161% or approximately $1.9 billion above requirements. Source: earnings call transcript
-1 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
Care Assurance Worksite productlaunch

Risks & headwinds

Closed Block Liability Remeasurement Losses FY26

A/E loss experience in H1 FY26 has trended above the full year expectation of approximately $300 million.

Mitigation:Active management of the Closed Block as a closed system, leveraging existing reserves and capital, and execution of the Multi-Year Rate Action Plan (MYRAP).

CareScout Match Volume Pacing FY26

Current match volumes are pacing below the level that would be required to reach the full year target of approximately 7,500.

Mitigation:Continued expansion of the CareScout network, integration of additional senior living communities, and increased consumer engagement.

AXA Litigation Uncertainty 3 to 6 months post-July hearing

Litigation is inherently uncertain; the company is not speculating on the outcome. Potential recovery of approximately $750 million is not factored into current capital allocation plans.

Mitigation:No specific mitigation stated, but the company will deploy proceeds in line with existing priorities if received.

Timing of MYRAP Approvals

The timing of approvals can be difficult to predict.

Mitigation:Continued work with regulators to finalize pending rate increase requests and execution of the program with discipline to ensure long-term self-sustainability of the Closed Block.

What to watch in Q3 FY26

AXA Litigation Decision

H2 FY26
Current Appeal hearing occurred in July
Target Decision within 3 to 6 months

Why it matters

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

The appeal hearing occurred in July. We continue to expect the Court of Appeal to reach a decision within approximately 3 to 6 months following the hearing.

Find out whether GNW delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you provide any color on the July appeal hearing for the AXA/Santander case, and how would potential proceeds be used, specifically regarding acceleration of debt reduction or CareScout investment versus share repurchases?

The company cannot speculate on the outcome of the AXA litigation but was pleased with how the hearing went. Regarding proceeds, the existing capital allocation priorities (investing in CareScout, returning capital via buybacks, opportunistically retiring debt) would apply. The recent increase in share buyback guidance reflects current capital allocation, and any acceleration is dependent on receiving the cash.

“The only color commentary I can give you is that I think AXA's lawyers did an excellent job. But having been in this business for 40 -- almost 40 years, I know one thing for certain, and that's litigation is inherently uncertain. So we're not going to speculate on the outcome, but we were pleased with the way the hearing went.”

asked by Ryan Krueger · answered by Gregory Karawan

2 min read 6 chapters

Detailed narrative

Leadership Transition and Strategic Continuity

Jerome Upton has assumed the role of Interim President and CEO while continuing as CFO, following Tom's leave of absence for medical reasons. The Board and leadership team expressed confidence in the company's strategic direction and ability to execute. The leadership team, with an average tenure of nearly 20 years, is deeply engaged in advancing existing strategies for policyholders and shareholders.

Enact's Strong Performance and Capital Contribution

Enact continued to be a key driver of shareholder value, contributing $143 million in adjusted operating income to Genworth. The company's 81% ownership stake in Enact generated $103 million in capital returns during the quarter. Enact's PMIERs sufficiency ratio remained strong at 161%, approximately $1.9 billion above requirements, supporting its ability to return capital.

CareScout's Network and Product Expansion

CareScout is expanding its aging care platform, with its network now including over 1,100 home care locations and targeting at least 2,000 senior living communities by year-end. The number of local advisors doubled, now represented in 26 states. CareScout also made progress towards launching its Care Assurance Worksite product, approved in at least 34 states for a Q3 launch, expanding distribution into the employer channel.

Closed Block Management and MYRAP Progress

The Closed Block of LTC, life, and annuity products is actively managed for long-term sustainability and capital discipline. The Multi-Year Rate Action Plan (MYRAP) secured $46 million in gross incremental premium approvals in Q2, with an additional $27 million in July.

Cumulatively, $34.8 billion in benefit reductions and premium increases have been achieved since 2012, with 62% of policyholders offered a benefit reduction electing to take one.

Investment Portfolio and Holding Company Liquidity

Genworth's investment portfolio is conservatively positioned with a majority in investment-grade fixed maturities. New money yields of approximately 6.2% exceeded those on sales and maturities. The alternative assets program, primarily diversified private equity, targets 12% returns. The holding company ended the quarter with $215 million in cash and liquid assets, maintaining a disciplined capital structure with a cash interest coverage ratio of approximately 9x.

AXA Litigation Update

The appeal hearing for the AXA litigation occurred in July, with a decision expected within 3 to 6 months. If successful, Genworth anticipates recovering approximately $750 million, which is not currently factored into capital allocation plans. Any proceeds would be deployed in line with existing priorities: investing in CareScout, returning capital to shareholders, and reducing debt.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.