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    GNW
    Earnings call· Jun 2026(Q2 FY26)

    GENWORTH FINANCIAL Q2 FY26 earnings call GNW

    Aug 6, 2026 Source

    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

    8
    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

    3
    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)

    Operational metrics

    17
    Net income
    $47 million
    Q2 FY26

    Reported net income for the quarter.

    Adjusted operating income (excluding Closed Block)
    $112 million
    Q2 FY26

    Adjusted operating income for the company, excluding the Closed Block segment.

    Diluted EPS
    $0.12
    Q2 FY26

    Reported diluted EPS.

    Adjusted operating EPS (excluding Closed Block)
    $0.29
    Q2 FY26

    Adjusted operating EPS for the company, excluding the Closed Block segment.

    Holding company cash and liquid assets
    $215 million
    Q2 FY26 end

    Cash and liquid assets held at the holding company level, excluding $81 million for future obligations.

    Holding company debt
    $768 million
    Q2 FY26 end

    Total holding company debt after retiring $10 million of principal debt in the quarter.

    Cash interest coverage ratio
    9x
    Q2 FY26

    Ratio of cash interest coverage on debt service.

    New money yields
    6.2%
    Q2 FY26

    Yields on new investments in life insurance companies, exceeding those on sales and maturities.

    Alternative assets targeted returns
    12%
    Q2 FY26

    Targeted returns for the alternative assets program, primarily diversified private equity.

    CareScout home care locations
    1,100
    Q2 FY26 end

    Number of home care locations in the CareScout network.

    CareScout senior living communities target
    at least 2,000
    end of this year

    Target for senior living communities to be integrated into the CareScout network by year-end.

    CareScout local advisers
    doubled
    so far this year

    Growth in the number of local advisors for CareScout, providing personalized guidance.

    CareScout matches
    1,450
    Q2 FY26

    Number of matches facilitated between care seekers and providers in the second quarter.

    CareScout matches
    2,950over double H1 FY25
    H1 FY26

    Total matches facilitated for the first half of the year, significantly up from the prior year.

    CareScout Worksite product approval states
    at least 34
    Q3 FY26 launch

    Number of states where the Care Assurance Worksite product is approved for launch.

    CareScout Services revenue
    $6 million
    Q2 FY26

    Revenue generated by CareScout Services in the second quarter.

    CareScout Services revenue
    $12 million
    H1 FY26

    Total revenue generated by CareScout Services in the first half of the year.

    Industry KPIs

    7
    MetricValueDetails
    Capital returns$62 millionUSD
    Book value per share$4.4 billionUSD
    Net investment income6.2%%
    Retention persistency62%%
    Net premiums written earned$15 billionUSD
    Statutory regulatory capital161%%
    Prior year reserve development$37 millionUSD

    Product announcements

    1
    ProductTypeDetails
    Care Assurance Worksite productlaunch

    Risks & headwinds

    4
    Closed Block Liability Remeasurement LossesFY26

    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 PacingFY26

    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 Uncertainty3 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

    5

    AXA Litigation Decision

    H2 FY26
    CurrentAppeal hearing occurred in July
    TargetDecision 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.

    Q&A highlights

    1

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

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