Genworth's Q2 2025: Navigating Contradictions in Dividend Strategy and CareScout Funding

Dividend strategy, CareScout capital contributions, long-term care insurance separation and funding, CareScout Insurance Company's status and funding are the key contradictions discussed in Genworth Financial's latest 2025Q2 earnings call.



Financial Performance and Enact Capital Returns:
- Genworth Financial reported net income of $51 million for Q2, with adjusted operating income at $68 million or $0.16 per share.
- Enact contributed $141 million to adjusted operating income, and Enact now expects to return approximately $400 million of capital to shareholders.
- These results are primarily driven by Enact's strong operational performance and the strategic value it continues to provide to Genworth shareholders.

Long-Term Care and Rate Action Plan:
- The Long-Term Care Insurance segment reported an adjusted operating loss of $37 million due to a remeasurement loss, primarily related to unfavorable actual variances from expected experience.
- Genworth secured $41 million in gross incremental premium approvals, with an average premium increase of 36%, as part of its multiyear rate action plan (MYRAP).
- The rate action plan helps maintain self-sustainability and reduces exposure to certain high-cost benefit features, supporting long-term risk management.

CareScout Expansion and Insurance Initiatives:
- CareScout expanded its product offerings with the launch of care plans and expanded network access to all 50 states, contributing to fee-based revenue growth.
- CareScout Quality Network now comprises nearly 650 home care providers, covering over 90% of the age 65-plus census population in the U.S.
- These initiatives aim to drive long-term growth and capitalize on the growing demand for long-term care services and navigation assistance.

AXA Litigation and Capital Allocation:
- The U.K. High Court awarded damages worth approximately GBP 680 million in the AXA and Santander litigation, with Genworth expecting to receive $750 million based on exchange rates, subject to appeals.
- Proceeds, if received, are expected to be used for long-term growth through CareScout, returning cash to shareholders, and potentially debt retirement.
- The ruling validates Genworth's long-standing belief that Santander bears responsibility for legacy liabilities and supports future capital allocation priorities.