Genworth Financial Inc

Good morning, ladies and gentlemen, and welcome to Genworth Financial's first quarter 2022 earnings conference call. My name is Kevin and I will be your coordinator today. At this time, all participants are in a listen-only mode. We will facilitate a question and answer session towards the end of this conference call. As a reminder, the conference is being recorded for replay purposes. Also, we ask that you refrain from using cell phones, speaker phones or headsets during the Q&A portion of today's call. I would now like to turn the presentation over to Sarah Cruz, Director of Investor Relations. Please go ahead.

Thank you, Operator. Good morning and welcome to Genworth's first quarter 2022 earnings call. Today, you will hear from our President and Chief Executive Officer, Tom McInerney, followed by Dan Sheehan, our Chief Financial Officer and Chief Investment Officer. The slide presentation that accompanies this call is available in the Investor Relations section, of the Genworth website, investor.genworth.com. Our earnings release and financial supplement can also be found there, and we encourage you to review these materials. Following our prepared remarks, we will open the call up for a question and answer period. In addition to our speakers, Brian Hendegas, President of our U.S. Life Insurance segment, and Jerome Upton, Deputy Chief Financial Officer and Controller, will also be available to take your questions. During the call this morning, we may make various forward-looking statements. Our actual results may differ materially from such statements. We advise you read the cautionary notes regarding forward-looking statements in our earnings release and related presentations, as well as the risk factors of our most recent annual report on Form 10-K as filed with the SEC. This morning's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors. In our financial supplement, earnings release and investor materials, non-GAAP measures have been reconciled to GAAP where required in accordance with the SEC rules. Also, references to statutory results or estimates due to the timing of the filing of the statutory statement. And now, I'll turn the call over to our President and CEO, Tom McInerney.

Thank you, Sarah. Good morning, everyone, and thank you for joining our first quarter earnings call. Denworth had a very good start to the year with solid results in the first quarter and important progress against our strategic priorities, strengthening our ability to drive value for shareholders. This progress has been delivered in a period marked by significant market volatility driven by geopolitical and economic challenges as we enter the post-pandemic era. I am proud of our team's ability to deliver these results in this environment while serving our almost 3 million policyholders. I'm also proud of the performance Enact, our mortgage insurance subsidiary, has delivered thus far in its first year as a public company. As recently announced by Enact, the company has initiated a quarterly dividend program, which has been approved by Enact's board of directors. Enact will issue its first quarterly dividend of 14 cents per share in the second quarter. Genwith will receive approximately 19 million as majority shareholders. In addition to its quarterly dividend program, an act is planning to return additional capital to shareholders later in 2022. Based on projected cash flow from an act and Genworth's improved financial condition, Genworth's board authorized a new share buyback program that was announced on Monday. Now I want to briefly review our first quarter results. U.S. GAAP net income was $149 million for the first quarter, while adjusted operating income was $131 million or 25 cents per share. These results were led by an act which reported 135 million in adjusted operating income. U.S. Life reported an adjusted operating loss of 4 million for the quarter, driven by an operating loss of 79 million in life insurance, mostly offset by strong performance in LTC insurance and annuities. The life insurance loss included a number of one-time items that Dan will discuss in more detail. As a reminder, we are providing information on our statutory results on a quarter lag with results as of year end 2021 available on pages 10 and 13 of our investor presentation. While the first quarter statutory results are still being finalized, we expect strong pre-tax statutory income of approximately $210 million for the first quarter. As shown on slide 13, the consolidated balance sheet of General Life Insurance Company, or GLIC, remains very strong with capital in surplus of approximately $2.9 billion as of year-end 2021, up from $2.1 billion at the end of 2020. Similarly, Blix unassigned surplus improved to negative $985 million at the end of 2021 from negative $1.8 billion at year-end 2020. Blix RBC ratio is estimated to be 296% as of March 31, 2022, an increase of seven points from 289%, at year end 2021. Our final statutory results will be available with our Q1 statutory filings later this month.