Forward-looking statements and non-IFRSs financial measures
This site contains forward-looking statements that involve certain risks. Genworth MI Canada Inc.’s actual results could differ materially from these forward-looking statements. To supplement the Company’s consolidated financial statements, which are prepared in accordance with IFRSs, the Company uses non-IFRSs financial measures to analyze performance. For more information on forward-looking statements and non-IFRSs financial measures please click the following link.
Special note regarding forward-looking statements
Certain statements made in this site, including documents posted herein, contain forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). When used herein, the words “may,” “would,” “could,” “will,” “intend,” “plan,” “anticipate,” “believe,” “seek,” “propose,” “estimate,” “expect,” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. Specific forward-looking statements include, but are not limited to, statements with respect to the Company’s expectations regarding any Canadian government changes to the guarantee regime regarding residential mortgages, any changes to the government guarantee mortgage eligibility rules, the Company’s beliefs as to housing demand and home price appreciation, unemployment rates, future operating and financial results, expectations regarding premiums written, capital expenditure plans, dividend policy and the ability to execute on its future operating, investing and financial strategies.
The forward-looking statements contained herein are based on certain factors and assumptions, certain of which appear proximate to the applicable forward-looking statements, including any economic assumptions. Inherent in the forward-looking statements are known and unknown risks, uncertainties and other factors beyond the Company’s ability to control or predict that may cause actual results, performance or achievements of the Company, or developments in the Company’s business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Actual results or developments may differ materially from those contemplated by the forward-looking statements.
The Company’s actual results and performance could differ materially from those anticipated in these forward-looking statements as a result of both known and unknown risks, including risks related to changes in government regulation; competition from other providers of mortgage insurance in Canada; a downturn in the global or Canadian economies; a decline in the Company’s regulatory capital or an increase in its regulatory capital requirements; changes to laws mandating mortgage insurance; a decrease in the volume of high or low loan-to-value mortgage originations; ineffective or unsuccessfully implemented risk management standards by the Company; a downgrade or potential downgrade in the Company’s financial strength ratings; interest rate fluctuations; the loss of members of the Company’s senior management team; potential legal, tax and regulatory investigations and actions; the failure of the Company’s computer systems; and potential conflicts of interest between the Company and its majority shareholder.
This is not an exhaustive list of the factors that may affect any of the Company’s forward-looking statements. Some of these and other factors are discussed in more detail in the Company’s most recent annual information form (“AIF”). Investors and others should carefully consider these and other factors and not place undue reliance on the forward-looking statements. Further information regarding these and other risk factors is included in the Company’s public filings with provincial and territorial securities regulatory authorities and can be found on the SEDAR website at www.sedar.com, including the AIF. The forward-looking statements contained herein represent the Company’s views only as of the date of such statements. Forward-looking statements are based on management’s then present plans, estimates, projections, beliefs and opinions, and the assumptions related to those plans, estimates, projections, beliefs and opinions may change; therefore, they are presented for the purpose of assisting the Company’s security holders in understanding management’s views at such time regarding those future outcomes and may not be appropriate for other purposes. While the Company anticipates that subsequent events and developments may cause the Company’s views to change, the Company does not undertake to update any forward-looking statements, except to the extent required by applicable securities laws.
Non-IFRSs financial measures
To supplement the Company’s consolidated financial statements, which are prepared in accordance with IFRSs, the Company uses non-IFRSs financial measures to analyze performance. Such non-IFRSs financial measures used by the Company to analyze performance may include net operating income, operating earnings per common share (basic), operating earnings per common share (diluted), shareholders’ equity excluding AOCI, operating return on equity and underwriting ratios such as loss ratio, expense ratio and combined ratio. Other non-IFRSs financial measures used by the Company to analyze performance, may include insurance in force, new insurance written, MCT ratio, delinquency ratio, severity on claims paid, book value per common share (basic) including AOCI, book value per common share (basic) excluding AOCI, book value per common share (diluted) including AOCI, book value per common share (diluted) excluding AOCI, and dividends paid per common share. The Company believes that these non-IFRSs financial measures provide meaningful supplemental information regarding its performance and may be useful to investors because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Non-IFRSs financial measures do not have standardized meaning and are unlikely to be comparable to any similar measure presented by other companies.
Glossary for non-IFRSs financial measures
- “book value per share including AOCI (basic)” means the ratio of shareholders’ equity to number of basic common shares outstanding at a specified date.
- “book value per share excluding AOCI (basic)” means the ratio of shareholders’ equity excluding AOCI to number of basic common shares outstanding at a specified date.
- “book value per share including AOCI (diluted)” means the ratio of shareholders’ equity including AOCI to number of diluted common shares outstanding at a specified date. Diluted common shares outstanding takes into account all of the outstanding dilutive securities that could potentially be exercised.
- “book value per share excluding AOCI (diluted)” means the ratio of shareholders’ equity excluding AOCI to number of diluted common shares outstanding at a specified date. Diluted common shares outstanding takes into account all of the outstanding dilutive securities that could potentially be exercised.
- “combined ratio” means the sum of the loss ratio and the expense ratio. The combined ratio provides a measure of the Company’s ability to generate profits from its insurance underwriting activities.
- “delinquency ratio” means the ratio (expressed as a percentage) of the total number of delinquent loans to the total number of policies in-force at a specified date.
- “dividends paid per common share” means the portion of the Company’s profits distributed to shareholders during a specified period.
- “expense ratio” means the ratio (expressed as a percentage) of sales, underwriting and administrative expenses to net premiums earned for a specified period.
- “insurance in-force” means the amount of all mortgage insurance policies in effect at a specified date, based on the original principal balance of mortgages covered by such insurance policies, including any capitalized premiums.
- “loss ratio” means the ratio (expressed as a percentage) of the total amount of losses on claims associated with insurance policies incurred during a specified period to net premiums earned during such period.
- “Minimum Capital Test” or “MCT” means the minimum capital test for certain federally regulated insurance companies established by OSFI (as defined herein). Under MCT, companies calculate a ratio of capital available to capital required using a defined methodology prescribed by OSFI in monitoring the adequacy of a company’s capital.
- “net operating income” means net income excluding after-tax net realized gains (losses) on sale of investments and unrealized gains (losses) on held for trading securities.
- “new insurance written” means the original principal balance of mortgages, including any capitalized premiums, insured during a specified period.
- “operating return on equity” means the net operating income for a period divided by the average of the beginning and ending shareholders’ equity, excluding AOCI, for such period. For quarterly results, the operating return is the annualized operating return on equity using the average of beginning and ending shareholders’ equity, excluding AOCI, for such quarter.
- “severity on claims paid” means the ratio (expressed as a percentage) of the dollar amount of paid claims during a specified period on insured loans to the original insured mortgage amount relating to such loans. The main determinants of the severity ratio are the loan-to-value (original balance of a mortgage loan divided by the original value of the mortgaged property), age of the mortgage loan, the value of the underlying property, accrued interest on the loan, expenses advanced by the insured and foreclosure expenses.
The Company’s full glossary is posted at http://investor.genworthmicanada.ca.