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GNW Payment%20Protection%20Insurance%20Overview%20

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GNW Payment%20Protection%20Insurance%20Overview%20

  1. 1. Payment Protection Insurance Overview November 16, 2007 ©2007 Genworth Financial, Inc. All rights reserved. Company Confidential
  2. 2. Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for the company’s future business and financial performance. Forward-looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors, including those discussed in the Appendix and in the risk factors section of the company’s Form 10-K filed with the SEC on February 28, 2007, Form 8-K filed with the SEC on April 16, 2007 and Form 10-Q filed with the SEC on October 26, 2007. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise. For important information regarding the use of non-GAAP measures included in this presentation, see our Third Quarter Financial Supplement which can be found on our website at www.genworth.com. 1
  3. 3. Overview Highlights Ireland France UK Portugal Present In Europe Since 1972 1986 1986 1972 1989 ’04 Shift – Exited Certain Relationships Finland Sweden Italy Netherlands Product & Geographic Diversification 1993 1994 1995 1995 Regional Structure • Nordic: Finland, Sweden, Norway, Norway Germany Denmark Spain 1995 1996 1996 1995 Denmark • Central: France, Germany, Netherlands, Switzerland Switzerland Greece Mexico Poland 1999 2005 2005 2005 • Western: Ireland, UK • Southern: Spain, Portugal, Italy, Greece • New Markets: Poland, Mexico, Canada Czech Republic Hungary Canada 2006 2006 2007 Local Market Presence 2
  4. 4. Product Overview Coverage Financial Obligations Covered Life Personal Loans Involuntary Unemployment Auto Loans 3-5 Yr Average Credit Cards Accident Policy Life Mortgages Disability Variety Of Product Designs Distributed At Point Of Sale Monthly Pay Or Single Premium 200+ Fin’l Institutions Globally Direct or Reinsurance Distributor Branded Commission Based W/ Risk Sharing Business to Business Model One Genworth Approach 3
  5. 5. European Market ~ $18 Billion Premium Credit Cards 10% GNW Personal Cardif Our Loan Focus 32% Other Other 6% Captives Mortgage 52% Underlying Loan Type By Competitor ($B) Market Size Estimate based on Finnacord 2004 and GNW Management Estimates 4
  6. 6. GNW Geographic & Product Dispersion Sales By Geographic Region Financial Obligations Covered 2004 9/30/07 Sales ($B) 1.5 2.2 New Markets Pers. Loan 40% Structured Nordic Mortgages 17% Southern Auto Finance 12% Central Credit Cards 11% Western Other Prod. 20% September 2007 YTD 2004 2007E 5
  7. 7. Limited Claims Volatility Lender Sold At Origination Lender Risk Sharing Maximum Claim Amounts Limited Underwriting Risk Exclusion Waiting Claim Payment Coverage Type Period Period Period Limit Severity Limit Involuntary Unemployment 3-6 Months 30-60 Days 6-12 Months Accident 60 Days 30 Days 12 Months Disability 60 Days 30 Days 12 Months 6
  8. 8. Key Financial Levers Key Metrics Loss Ratio – 30+ Years Claim Experience Pre-tax Fee Inc. Profit Commission Expense Losses Inv. Inc. – Commission/Profit Share Driven (Claims) – Varies Widely by Market/Lender Earned Prem. Commissions Expense Ratio – Operating Cost Productivity $1.6B Unearned Premium Reserve Op Exp As Of 9/30/07 7
  9. 9. Financial Metrics Key Metrics 2004 2005 2006 9/30/07 YTD Loss Ratio (1) 20% 19% 16% 17% Stable Underwriting Experience Expense Ratio (2) 39% 50% 53% 52% Commission Driven Shift To High Margin Products P-Tax Op. Margin 9% 10% 12% 11% Effective Tax Rate 39% 37% 28% 27% Focus on Tax Efficiency (1) Calculated As Benefits And Change In Reserves Divided By Premiums. (2) Calculates As Acquisition And Operating Expenses, Net Of Deferrals, Divided By Total Revenues. 8
  10. 10. Sales Growth Growth Strategy Established Platforms ($B) – Penetrate Existing Accounts CAGR ~15+% – Establish New Relationships 2.2 New Mkts. 1.9 Structured Deals Structured 1.5 Deals – Creative Product Solutions New Markets Est. – Leverage Product Expertise Platforms New Products 2004 2005 2006 2007E 9
  11. 11. European Branding Objectives Name Recognition, Brand Awareness, and Value Proposition Generate Perceptions: Significant, Global & Local B2B Brand Focus/Action Plan Geographic Priorities High Growth - Spain, Italy and Germany Established - UK and Ireland Execution European Pro Golf Sponsorship “Think It Possible” - Targeted Ad Campaign 10
  12. 12. Summary Operating Income CAGR 15%+ Product Expertise Broad Distribution Network Scalable Cost Effective Platform Capital Efficient Attractive Returns 2004 2005 2006 2007E 11
  13. 13. Appendix Cautionary note regarding forward-looking statements This presentation contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for our future business and financial performance. Forward- looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks, including the following: • Risks relating to our businesses, including interest rate fluctuations, downturns and volatility in equity and credit markets, defaults in portfolio securities, downgrades in our financial strength and credit ratings, insufficiency of reserves, legal constraints on dividend distributions by subsidiaries, competition, availability and adequacy of reinsurance, defaults by counterparties, regulatory restrictions on our operations and changes in applicable laws and regulations, legal or regulatory investigations or actions, political or economic instability, the failure or any compromise of the security of our computer systems, and the occurrence of natural or man-made disasters or a pandemic disease; • Risks relating to our International segment, including political and economic instability, foreign exchange rate fluctuations, unexpected changes in unemployment rates, deterioration in economic conditions or decline in home price appreciation, unexpected increases in mortgage insurance default rates or severity of defaults, decreases in the volume of high loan-to-value international mortgage originations, increased competition with government-owned and government-sponsored entities offering mortgage insurance, changes in regulations, and growth in the global mortgage insurance market that is lower than we expect; • Other risks, including the possibility that in certain circumstances we will be obligated to make payments to GE under our tax matters agreement even if our corresponding tax savings are never realized and payments could be accelerated in the event of certain changes in control, and provisions of our certificate of incorporation and by-laws and our tax matters agreement with GE may discourage takeover attempts and business combinations that stockholders might consider in their best interests. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise. 12
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