Genworth Q2 2026 Earnings: Enact Stability Offset by Closed Block Losses

Genworth Financial (NYSE: GNW) reported Q2 2026 GAAP net income of $47 million, down from $51 million a year earlier, while diluted EPS was unchanged at $0.12. Adjusted operating income excluding Closed Block held at $112 million, as stable earnings from Enact and favorable investment results were offset by a substantially wider Closed Block loss.

Core earnings data

Net income declined by about 8% year over year, but the per-share result remained flat because weighted-average diluted shares fell by about 7.5%. On the company’s non-GAAP measure, adjusted operating income excluding Closed Block was unchanged, while the corresponding per-share amount rose by about 7%.

GAAP results also benefited from $29 million of after-tax net investment gains, compared with a $22 million loss a year earlier—a $51 million positive swing. After-tax net investment income increased by about 4%, primarily due to higher income from limited partnerships and U.S. Treasury Inflation-Protected Securities.

Adjusted operating income excluding Closed Block is a non-GAAP measure intended to reflect Genworth’s ongoing operations. The Closed Block operates on a standalone basis using its existing capital, reserves and in-force management actions.

Business and segment performance

Enact remained the main earnings contributor

Enact generated $143 million of adjusted operating income, compared with $141 million a year earlier. Its results included a $37 million pre-tax reserve release resulting from favorable cure performance and loss-mitigation activity, down from a $48 million release in Q2 2025.

Primary new insurance written rose 15% year over year to $15.20 billion, primarily because of a larger estimated mortgage insurance market. Primary insurance in force increased 2% to $274.0 billion, supported by new business and elevated policy persistency.

Enact’s loss ratio increased to 14% from 10%, while its estimated PMIERs sufficiency ratio declined to 161% from 165%. The ratio nevertheless remained $1.89 billion above regulatory requirements. Enact returned $103 million of capital to Genworth during the quarter.

Closed Block losses widened as the long-term care portfolio aged

The Closed Block recorded a $110 million adjusted operating loss, compared with a $44 million loss a year earlier. The current quarter included a $127 million pre-tax adverse actual-to-expected experience loss, up from $52 million in Q2 2025.

The deterioration reflected lower long-term care policy terminations, including seasonally lower mortality, and continued claims growth as the portfolio ages. The year-over-year comparison also benefited from a $26 million pre-tax reinsurance recapture gain in the prior-year quarter.

Genworth continued to obtain premium increases and benefit reductions through in-force management actions. The company estimated that these actions have produced $34.8 billion of net present value since 2012, but they did not prevent statutory long-term care results from falling to a loss of $82 million from a $26 million loss a year earlier.

CareScout investment continued

Corporate and Other reported a $31 million adjusted operating loss, compared with a $29 million loss in Q2 2025. Genworth attributed the current loss primarily to continued investment in CareScout and debt-service costs.

CareScout delivered 1,459 care matches during the quarter while expanding its home-care and senior-living network. Care Assurance Worksite was approved in 34 states as of June 30, 2026, ahead of its planned third-quarter launch.

Profitability, liquidity and regulatory capital

Combined statutory pre-tax income from the legacy insurance companies fell to $6 million from $81 million a year earlier. Long-term care and life insurance recorded losses of $82 million and $22 million, respectively, while annuities generated $110 million of statutory pre-tax income. Annuity results included $97 million of favorable equity-market and interest-rate effects.

The estimated consolidated risk-based capital ratio for Genworth Life Insurance Company declined to 286% from 289% in the prior quarter and 304% a year earlier. Management attributed the sequential decrease mainly to long-term care losses and higher required capital associated with claims.

Holding-company cash and liquid assets ended the quarter at $215 million, up from $166 million at the end of Q1 but below $248 million a year earlier. The quarter-end total included approximately $81 million held for future obligations.

Share repurchases lifted per-share results while using Enact cash returns

Adjusted operating income excluding Closed Block was unchanged at $112 million, but the corresponding per-share result increased from $0.27 to $0.29. The main arithmetic driver was the reduction in weighted-average diluted shares to 386.3 million from 417.5 million.

Genworth repurchased $62 million of shares during the quarter at an average price of $8.74. Since the program began, the company has repurchased $918 million of shares at an average price of $6.47 through June 30, 2026.

The quarter’s $103 million of cash inflows from Enact helped fund these repurchases. Other holding-company outflows included $17 million of debt-servicing costs and the repurchase of $10 million in debt principal at a discount.

Risks investors need to watch

• Continued Closed Block volatility: The $127 million adverse actual-to-expected loss reflected lower terminations and rising long-term care claims. Further adverse experience could pressure both earnings and required regulatory capital.
• Declining legacy capital ratios: The GLIC consolidated RBC ratio fell to 286% from 304% a year earlier. In-force premium increases and benefit reductions are providing support, but higher claims are still consuming capital.
• Potential normalization at Enact: Enact’s reserve release decreased to $37 million from $48 million, while its loss ratio rose to 14% from 10%. Because Enact is Genworth’s largest operating earnings contributor and an important source of holding-company cash, weaker mortgage insurance results could affect both profitability and liquidity.
• Reliance on Enact capital returns: Genworth received $103 million from Enact during the quarter while spending $62 million on share repurchases and additional amounts on debt. Lower future capital returns from Enact could reduce holding-company flexibility.

Summary

Genworth’s Q2 2026 results showed stable ongoing earnings outside the Closed Block, supported by Enact, investment income and a lower share count. The principal weakness remained the aging long-term care portfolio, where higher claims and lower terminations widened losses and reduced regulatory capital. Investors should focus on future Closed Block experience, Enact’s loss trends and reserve releases, and the balance between capital returns, repurchases and holding-company liquidity.