First quarter Canadian mortgage insurance earnings “remained strong despite the challenging economic environment.”
On the other hand, “Slowing mortgage origination markets, and proactive risk management actions contributed to lower levels of new insurance written (NIW) and slower revenue growth.”
Genworth had “solid solvency ratios for mortgage insurance businesses in Canada.”
Genworth’s Canadian earnings “grew 8% driven by 15% revenue growth and lower taxes, partially offset by increased losses from seasoning of the large 2007 book during a period of declining home prices in several regions and rising unemployment. Flow NIW declined 39 percent primarily as a result of lower levels of high loan to value (LTV) mortgage originations.”
After exchange rates are factored in, Genworth Financial Canada earned $66 million of net operating income in its mortgage insurance business. That compares to first quarter 2008 when it earned $75 million.
In the company’s conference call there were a few other notes of interest:
Average unemployment rates increased dramatically in the first quarter (by 120 basis points to 7.6%) and Genworth saw an increase in delinquencies to about 3,400 from 2,400 in the fourth quarter.
Genworth Canada’s book value increased to approximately $1.8 billion as of March 31.