Genworth Posts Q3 Loss as Closed Block Weakness Offsets Enact

Genworth Financial reported a third-quarter net loss as worsening results in its legacy insurance operations outweighed continued profitability at mortgage insurer Enact Holdings. The company recorded a net loss available to common stockholders of $41 million, or $0.11 per diluted share, compared with net income of $116 million, or $0.28 per diluted share, a year earlier.

Adjusted operating income excluding the Closed Block was $102 million, or $0.27 per diluted share, down from $113 million, or $0.28 per share, in the third quarter of 2025. The non-GAAP measure excludes the results of the Closed Block, which Genworth manages on a standalone basis using its existing capital, reserves and in-force policy actions.

Closed Block weighs on quarterly results

The Closed Block posted an adjusted operating loss of $146 million, widening from losses of $110 million in the second quarter and $96 million a year earlier. Results included a $111 million pre-tax loss from differences between actual and expected experience, driven primarily by lower policy terminations from mortality and higher long-term care benefit utilization. Lower net investment income also pressured results compared with both periods.

On a statutory basis, Genworth’s principal legacy insurance companies reported a combined pre-tax loss of $143 million, compared with income of $6 million in the previous quarter and a $12 million loss a year earlier. Long-term care insurance accounted for a $151 million loss, while life insurance lost $31 million and annuities generated $39 million of income.

The estimated risk-based capital ratio for Genworth Life Insurance Co. and its consolidated subsidiaries fell to 274% at September 30 from 286% three months earlier and 303% a year earlier. The company attributed the sequential decline primarily to the statutory long-term care loss. Capital and surplus stood at an estimated $3.3 billion.

Genworth continued to pursue premium increases and benefit reductions intended to reduce the Closed Block’s long-term exposure. It received approvals for $44 million of gross incremental long-term care premiums during the quarter, bringing year-to-date approvals to $95 million. Since 2012, those actions have produced an estimated net present value benefit of $35 billion, while the cumulative benefit-reduction rate reached 62.1%.

The proportion of individual long-term care policies with 5% compound inflation protection has declined to 35.0% from 57.2% at the start of 2014, while lifetime-benefit exposure has fallen to 10.9% from 24.3%. Genworth said paid long-term care claims are expected to continue rising as the insured population ages, with peak claim years still more than a decade away. The company has no plan to contribute holding-company capital to the Closed Block or receive capital from it.

Enact remains the main earnings contributor

Enact generated $132 million of adjusted operating income attributable to Genworth, compared with $134 million a year earlier. Results included a $37 million pre-tax reserve release reflecting favorable cure performance and loss-mitigation activity, below the $45 million release in the prior-year quarter.

Enact’s primary insurance in force rose 1% year over year to $275 billion as new insurance written exceeded lapses and cancellations. Earned premiums were $242 million, down modestly from $245 million a year earlier, partly because of higher ceded premiums. New insurance written declined 7% from the second quarter as mortgage rates increased.

Benefits and changes in policy reserves rose to $48 million from $33 million in the preceding quarter and $36 million a year earlier. Enact said the sequential increase in its loss ratio reflected the normal seasonal rise in new delinquencies, while the year-over-year comparison was affected by the smaller reserve release.

The primary delinquency rate was 2.8%, which the company described as consistent with pre-pandemic levels. Enact’s estimated Private Mortgage Insurer Eligibility Requirements sufficiency ratio was 158%, representing $1.83 billion of assets above required levels. Enact also entered into a quota-share reinsurance agreement covering its 2028 book year.

CareScout investment continues

Corporate and Other recorded a $30 million adjusted operating loss, compared with $21 million a year earlier. Genworth said the loss primarily reflected continued investment in CareScout’s services platform and holding-company debt service. The prior-year period also included a $7 million tax benefit.

CareScout reported 1,532 matches between care seekers and providers during the quarter. Year-to-date matches reached 4,477, approximately double the prior-year total, supported by expansion into senior living communities and growth in direct-to-consumer activity. The network had 1,227 active home-care locations and coverage across all 50 states, with Genworth working toward integrating more than 2,000 senior living communities by the end of 2026.

The company launched Care Assurance Worksite during the quarter, extending distribution of its care-funding product through employers. The offering had been approved in 40 states as of September 30. Genworth plans to continue funding CareScout Services’ technology platform, product additions and consumer and business-to-business distribution. Its $85 million investment in CareScout Insurance during 2025 is expected to support that business through 2026, with no additional investment anticipated this year.

Capital returns and liquidity

Enact returned $122 million to Genworth during the quarter, consisting of a $27 million quarterly dividend and $95 million in share-repurchase proceeds. Genworth used $80 million for its own share repurchases during the period and spent another $40 million in October. Total repurchases since the program began reached $998 million, reducing shares outstanding by 27% to 370 million as of quarter-end. The company also announced a $500 million expansion of the program.

Genworth repurchased $21 million of debt principal at a $3 million discount, leaving $747 million of holding-company debt. It said its capital-allocation priorities include investing in CareScout, returning capital to shareholders and opportunistically reducing debt while maintaining a debt-to-capital ratio of no more than 25%, with no equity value attributed to the Closed Block.

Holding-company cash and liquid assets totaled $320 million at September 30, including about $200 million held for future obligations. Genworth’s $58.5 billion investment portfolio included $42.5 billion of fixed-maturity securities, 97% of which were rated BBB or higher. The portfolio’s unrealized loss increased to $5.4 billion from $2.9 billion at the end of June.

Genworth identified several uncertainties that could affect its outlook, including adverse long-term care claims experience, delays in obtaining premium increases and benefit reductions, reserve-estimation changes, reduced capital returns from Enact, mortgage-market deterioration, higher care costs, interest-rate movements and investment losses. The company also noted that unfavorable differences between actual and expected Closed Block experience could persist and produce future remeasurement losses.