Overview

Genworth Financial is a leading provider of mortgage insurance products in the United States through its Enact Holdings subsidiary. The company also has start-up businesses offering fee-based aging care services and long-term care insurance products. Genworth Financial’s legacy insurance subsidiaries no longer sell new long-term care, life insurance or annuity products, but continue to service and manage their existing in-force blocks of business.

Genworth Financial reports its business results through two main segments: Enact, which includes mortgage insurance, and Closed Block, which includes the legacy long-term care, life insurance and annuity products. The company also has a Corporate and Other segment that includes debt financing, unallocated corporate income and expenses, and the results of other smaller businesses.

Strategic Update

Genworth Financial is focused on three key strategic priorities:

1. Create Value: The company continues to create shareholder value through Enact’s growing market value and capital returns. Enact Holdings expects to return $550 million to $600 million of capital to shareholders in 2026, up from an earlier estimate of $500 million. Genworth Financial plans to use these capital returns to fund strategic initiatives, share repurchases and debt reduction.

2. Drive Growth: Genworth is investing in its CareScout business to expand its consumer-focused aging care services and funding solutions. CareScout Services grew its network of home care providers and senior living communities, while CareScout Insurance launched a new long-term care insurance product for the workplace market. These investments are expected to drive sustainable future growth, though it will take time to scale these businesses.

3. Maintain Self-Sustainability: Genworth continues to actively manage its legacy long-term care insurance, life insurance and annuity products in the Closed Block segment. The company’s multi-year long-term care insurance in-force rate action plan remains a key tool, having achieved an estimated $34.8 billion in cumulative economic benefit through the second quarter of 2026.

Financial Strength and Credit Ratings

Genworth Financial’s principal insurance subsidiaries maintained their financial strength ratings, and the company’s credit ratings were unchanged from the prior year. These ratings are important to the company’s business operations.

Financial Performance

Genworth Financial’s revenues consist primarily of premiums, net investment income, and policy fees and other income. Key expenses include benefits and changes in policy reserves, liability remeasurement, interest credited, and acquisition and operating expenses.

For the three months ended June 30, 2026, the company reported net income of $47 million, down slightly from $51 million in the prior year period. Adjusted operating income, excluding the Closed Block segment, was $112 million in both periods.

For the six months ended June 30, 2026, net income was $94 million, down from $105 million in the prior year period. Adjusted operating income, excluding Closed Block, was $221 million compared to $226 million in the prior year.

The decrease in net income was primarily due to higher unfavorable actual experience in the Closed Block long-term care insurance business, partially offset by strong operating performance in the Enact mortgage insurance segment.

Enact Segment

Enact’s results are affected by factors such as competitor actions, economic and housing market trends, mortgage origination volume, delinquency levels, and regulatory changes.

In the second quarter of 2026, new insurance written increased 15% compared to the prior year period, driven by a larger estimated mortgage insurance market. Enact’s primary persistency rate was 80% in the current quarter, down from 82% a year earlier.

Enact’s loss ratio was 14% in the second quarter of 2026, up from 10% in the prior year period, primarily due to lower favorable reserve development. New primary delinquencies increased compared to the prior year, but Enact reduced its expected claim rates based on favorable cure performance and market expectations.

As of June 30, 2026, Enact Mortgage Insurance Corporation’s risk-to-capital ratio was 9.9:1, well below the regulatory maximum of 25:1. Enact’s Private Mortgage Insurer Eligibility Requirements (PMIERs) sufficiency ratio was 161%, or $1,894 million above the requirements.

During the second quarter, Enact Holdings returned $103 million of capital to Genworth Holdings, including $76 million in share repurchases and $27 million in dividends. Returning capital to shareholders remains a key priority for Enact, balanced with growth and risk management.

Closed Block Segment

The results of Genworth’s long-term care insurance, life insurance and annuity products in the Closed Block segment are impacted by factors such as morbidity, mortality, persistency, investment yields, and the company’s ability to implement in-force rate actions.

The adjusted operating loss in the long-term care insurance business increased, primarily driven by higher unfavorable actual experience compared to expectations. The life insurance adjusted operating loss also increased due to higher expenses and less favorable mortality.

Genworth continues to pursue significant premium rate increases and benefit reductions on its in-force long-term care insurance policies as part of its multi-year rate action plan. The company estimates the cumulative economic benefit of these approved rate actions was approximately $34.8 billion on a net present value basis through the second quarter of 2026.

Corporate and Other

The adjusted operating loss in the Corporate and Other segment increased, primarily due to continued investment in the CareScout Services business, partially offset by growing revenue as the business expands.

Investments and Derivative Instruments

Genworth’s investment portfolio was impacted by macroeconomic trends during the second quarter of 2026, including rising interest rates, tightening credit spreads, and improved equity market performance.

Net investment income increased for both the three and six month periods, driven by higher yields on the investment portfolio and increased income from limited partnerships, TIPS, and company-owned life insurance investments.

Net investment gains were $37 million in the second quarter of 2026, compared to losses of $28 million in the prior year period. The current year gains were primarily due to higher unrealized gains on equity securities and lower realized losses on fixed maturity securities, partially offset by unrealized losses on limited partnerships.

Outlook

Genworth Financial remains focused on its three strategic priorities of creating value, driving growth, and maintaining the self-sustainability of its legacy insurance businesses. The company expects capital returns from Enact Holdings to continue benefiting shareholders by funding strategic initiatives, share repurchases, and debt reduction.

While it will take time to scale the CareScout businesses, Genworth believes these investments are aligned with its goal of maximizing long-term value for shareholders. The company will continue to take a disciplined approach to capital allocation, balancing investments in growth with returning capital to shareholders and opportunistically retiring debt.

Genworth’s legacy insurance subsidiaries will rely on their statutory capital, reserves, and in-force management actions, including long-term care insurance rate increases, to satisfy policyholder obligations on a standalone basis. The company expects these actions will help maintain the self-sustainability of the Closed Block segment over time.

Overall, Genworth Financial is navigating a challenging macroeconomic environment while executing on its strategic priorities to create value, drive growth, and maintain the self-sustainability of its insurance businesses. The company’s focus on disciplined capital allocation and active management of its legacy blocks positions it to continue delivering value to shareholders.