Genworth Financial 4Q20 Earnings Analysis

Catalysts

Spinoff of PMI business
Merger with China Oceanwide - arbitrage opportunity
Rising demand for housing
Record Low Mortgage rate further increases demand for mortgages and consequently mortgage insurance
Asset price inflation - further increase in housing prices

Financial Analysis

Revenues of $2.26 billion in 4Q20 vs $2.03 billion in 4Q19
Revenues of $8.65 billion in FY20 vs $8.09 billion in FY19
Premiums of $4.11 billion in FY20 vs $4.03 billion in FY19
Operating income of $173 million in 4Q20 vs $24 million in 4Q19
US PMI: $95 million in 4Q20 vs $160 million in 4Q19
US Life Insurance: $129 million in 4Q20 vs $115 operating loss in 4Q19
Net income of $267 million in 4Q20 vs net loss of $17 million in 4Q19
Net income of $178 million in FY20 vs net income of $343 million in FY19
US PMI:
NIW of $99.9 billion for FY20 vs $62.4 billion for FY19
Total Revenues of $1.10 billion for FY20 vs $978 million for FY19
Loss Ratio 35%
US Life Insurance:
Total revenues of $4.84 billion in FY20 vs $6.43 billion in FY19
Loss ratio of 65%
Assets of $105 billion, liabilities of $89.9 billion and book value of $15.8 billion
Investments of $80.5 billion vs $75.2 billion in 4Q19
Yield of 4.96%
Almost all investment graded with 14% AAA

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