Genworth Financial Inc

Good morning, ladies and gentlemen, and welcome to Genworth Financial's fourth quarter 2025 earnings conference call. My name is Lisa, and I'll 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 call over to our Christine Jewell, head of investor relations. Please go ahead.

Thank you and good morning. Welcome to Genworth's fourth quarter 2025 earnings call. The slide presentation that accompanies this call is available on 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. Speaking today will be Tom McInerney, President and Chief Executive Officer, and Jerome Upton, Chief Financial Officer. Following our prepared remarks, we will open the call for questions. In addition to our speakers, Jamala Arlen, President and CEO of our Closed Block Insurance Business, Greg Carawan, General Counsel, Kelly Saltzgeber, Chief Investment Officer, and Samir Shah, CEO of CareScout Services, will also be available to take your questions. During this morning's call, we may make various forward-looking statements. Our actual results may differ materially from such statements. We advise you to read the cautionary notes regarding forward-looking statements in our earnings release and related presentation, as well as the risk factors of our most recent annual report on Form 10-K as filed with the SEC. Today's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors. In our investor materials, non-GAAP measures have been reconciled to GAAP where required in accordance with SEC rules. Additionally, references to statutory results are estimates due to the timing of the statutory filing. And now, I'll turn the call over to our President and CEO, Tom McInerney.

Tom McInerney Thank you, Christine. And thank you for taking the time to join our fourth quarter earnings call this morning. Genworth reported net income of $2 million with adjusted operating income of $8 million. This quarter's results were driven primarily by strong performance from an act which contributed $146 million to Genworth's adjusted operating income, partially offset by a loss of $114 million in our closed block, primarily from LTC. Our estimated pre-tax statutory income for our U.S. life insurance companies was approximately $71 million for the full year, including the net favorable impacts to annuities from equity market and interest rate movements. We will provide full statutory results in our annual filings later this month. Genworth ended the quarter with a healthy liquidity position, holding $234 million of cash and liquid assets. We also continue to advance our strategic priorities in 2025. First, we continue to create shareholder value through NAC's growing market value and capital returns. Our approximately 81% ownership stake in NAC remains a key source of cash to Genworth, with $407 million received in 2025, fueling our share repurchases and investments in CareScout. Supported by these strong cash flows, we continue to execute our share repurchase strategy throughout the fourth quarter, making progress on our $350 million authorization announced in September. In 2025, we repurchased 245 million of shares. Since May 2022, we have repurchased approximately 828 million of stock as of February 20th, reducing shares outstanding by about 24%, from 511 million to 388 million. These share repurchases create meaningful long-term value for shareholders by deploying capital at prices we believe represent a discount to generous intrinsic value. Turning to our second strategic priority, CareScout represents our long-term growth strategy and our vision for how aging care should work in the future. We are building an innovative consumer-focused platform It helps people understand, find, and fund the quality long-term care they need while creating a capital-light, scalable, data-driven business for the future. CareScout is designed to engage families across the aging journey, from navigating care decisions today to preparing for future needs. Our services business often begins with adult children helping their parents find care, many of whom will become the next generation of long-term care insurance customers. Our insurance products are being built with that in mind, combining financial protection with access to personalized services when customers and their family members need them the most. This integrated approach allows us to support families in moments of urgency while building long-term relationships and recurring revenue streams. Underpinning it all is continued investment in technology and AI. We are leveraging and plan to continue exploring additional capabilities for AI-enabled tools and automation to improve human-centered customer service at scale in order to strengthen underlying risk management and enable more efficient capital deployment and product development and marketing. Together, these and other capabilities will position CareScout to lead in a large and growing addressable market and to redefine how long-term care is delivered over time. Let's begin with a closer look at CareScout services where we made significant progress in 2025, maintaining a rapid pace of network expansion. The CareScout Quality Network now includes roughly 790 home care providers with more than 1,000 locations nationwide, covering 97% of the U.S. population age 65 and older. Each provider in the network must meet CareScout's rigorous credentialing standards, ensuring quality and consistency for people who rely on our services. The team executed well in the fourth quarter, facilitating 925 matches between LTC policyholders and home care providers in our network. We ended the year with 3,255 matches nationwide, well above our original target of 2,500 and our updated estimate of 3,000 and representing a three times increase versus 2024. In the fourth quarter, we closed the acquisition of Senior League a leading platform with a large network of senior living communities that helps families with care planning and placement. Integration is progressing well and is expanding our reach into the direct-to-consumer market. Senior Leave's team has brought deep industry and consumer experience, accelerating our efforts to scale beyond Genoa's pre-existing policyholder base and add senior living options to our network. Credentialing of major national senior living providers is underway and is expected to be complete by the end of 2026. In care plans, a fee-for-service offering that delivers personalized guidance, we continue to see momentum with consumers and B2B audiences. Notably, we now have the ability to deliver care plans both in person and virtually on a nationwide basis. Care plans are built on a proven and growing assessment capability, enabling faster and more consistent care recommendations at scale. We continue to expand partnerships with employee assistance programs and carriers with referral volumes exceeding our expectations in 2025. Assessment volumes continue to grow and are expected to scale over time, supported by strong operational execution and cost discipline. Care plans and assessments enable recurring fee-for-service revenue opportunities supported by increased capabilities due to expanded distribution across carrier, employer, and EAP partnerships. In 2026, we will continue to expand the range of services CareScout offers and the number of customers we serve. As the CareScout quality network continues to expand and brand awareness grows, we will drive increased traction with consumers. We also expect more of General's long-term care claimants to choose CQM providers, stretching policyholders' dollars further while generating claim savings for Genworth over time. Turning to the insurance business, we successfully launched Care Assurance, CareScout's inaugural standalone LTC insurance product, in the fourth quarter. Care Assurance is now live in 40 states with four more pending approval. The launch of Care Assurance reestablishes our presence in the long-term care insurance market and lays the foundation for disciplined, scalable growth. We are actively engaging with partners to broaden our distribution channels and plan to launch worksite and association group offerings later this year. Importantly, Care Assurance has been designed and priced for the long term, reflecting the evolution of the market and a more conservative and durable product structure aligned with today's LTC environment. Care Assurance will be differentiated through a variety of additional services, which create a holistic care experience for our customers and their families. such as access to the CQM, wellness support tools, and care planning services. This is a unique offering in today's market, blending coverage and services in a way others don't. To support sales, we're actively educating and equipping distributors to position care assurance effectively with our clients. While we expect adoption to build gradually, we are confident this product will create significant value for consumers and distribution partners alike. From services to insurance, CareScout is building a human-centered, tech-enabled platform to simplify and dignify the aging journey. Our approach combines AI and digital technology with a human touch and reflects our deep expertise in delivering high-quality, personalized support for long-term care decisions. As we expand into new care settings, products, and customer segments, will continue to grow organically while evaluating select inorganic add-on opportunities like Seniorly. Turning to our third strategic priority, we continue to actively manage our self-sustaining, customer-centric LTC life and annuity legacy business. Notably, this business is now focused exclusively on serving existing policyholders with no new sales and is being managed as a closed block. Our priorities here are clear. We aim to deliver a high-quality policyholder experience, maintain capital discipline, and ensure long-term sustainable risk management. We are also leveraging AI and digital technology to drive more efficient and lower cost processes around customer service and operating performance. Jerome will provide additional detail on the resegmentation of our closed block later in the call. Gemma secured $100 million of gross incremental LTC premium approvals in the fourth quarter and $209 million for the full year in 2025, with average premium increases of 35.6% and 38%, respectively. We are in the 13th year of a multi-year rate action plan, which has achieved $34.5 billion in net present value since 2012, driven primarily by benefit reductions and premium increases. The MIREP continues to be our most effective lever for stabilizing our closed block of business. Next, I'll provide a brief update on the acts of litigation. As shared on our second quarter earnings call, the UK High Court issued a favorable judgment in July. Sendendera was granted permission in October to appeal the claim on which AXA prevailed. And AXA was recently granted permission to cross appeal with respect to one of the claims, which was denied. The hearing on the appeal has now been set for July 21st through 23rd of this year. and we expect the Court of Appeal to reach a decision within approximately three to six months of the hearing. If the ruling is upheld, we expect our total recoveries to be approximately $750 million, subject to exchange rates at the time. We do not expect to pay taxes on this recovery. Any recoveries are not factored into our capital allocation plans, but if and when received, will be deployed in line with our priorities, investing in CareScout, returning capital to shareholders, and reducing debt. Before I turn it over to Jerome, I'd like to briefly reflect on the broader LTC environment. Recent federal budget debates have underscored a growing bipartisan focus on healthcare affordability and the long-term sustainability of public programs like Medicaid, particularly as the U.S. population ages. The very high LTC-related costs continue to be a meaningful part of that conversation. As demand continues to rise much faster than available resources, families are being asked to navigate an increasingly complex care landscape for their loved ones. This dynamic reinforces our conviction that the future of LTC will require not only flexible insurance and financing options, but also greater transparency, coordination, accessibility, and support services for policyholders and their families. We are designing CareScout to help aging Americans and their families understand find and fund the long-term care they need. As the nearly 70 million baby boomers continue to age, CareScout will serve as a complete solution in a very fragmented market built for the realities of today and in the future. Now let me turn the call over to Jerome to walk you through our financials and business trends in more detail.