Merrill Lynch Conference

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1 Merrill Lynch Conference Michael Fraizer Chairman and CEO February 12, Genworth Financial, Inc. All rights reserved.

2 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Forward-looking statements may be identified by words such as expects, anticipates, intends, plans, believes, seeks, estimates, will, or words of similar meaning and include, but are not limited to, statements regarding the outlook for the company s future business and financial performance. Forward-looking statements are based on management s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors, including those discussed in the Appendix and in the risk factors section of the company s Form 10-K filed with the SEC on February 28, 2007, the company s Form 8-K filed with the SEC on April 16, 2007 and the company s Form 10-Q filed with the SEC on October 26, The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise. Non-GAAP and Selected Operating Performance Measures All references to EPS, income, and ROE refer to net operating earnings per diluted share, net operating income and operating return on equity. All references to ROE in the business segments are levered, assuming 25% debt to total capital at the product line level. All financial data as of 12/31/07 unless otherwise noted. For additional information, please see Genworth s Fourth Quarter of 2007 earnings release and financial supplement, as well investor materials dated February 8, 2008 regarding Genworth s U.S. Mortgage Insurance business, posted at For important information regarding the use of non-gaap measures and selected operating performance measures, see the Appendix. This presentation should be used in conjunction with the accompanying audio or call transcript. 1

3 2007 Performance Operating EPS Operating ROE $3.07 Retirement & Retirement & Protection Protection 50% 50% 9.5% 11.0% 13-14% International 39% U.S. Mortgage Ins. 11% 2007 Percentages Exclude Corporate And Other Target 1 Pro Forma - See Genworth s Q Earnings Release (Dated 1/26/06) For Reconciliation. Adjusted For Earnings From Discontinued Operations Of $36MM 2

4 Genworth Strategy Your Financial Security Company Homeownership Life Security Mortgage Insurance Retirement Security Income LTC Liquidity Age Protection Wellness & Care Services Wealth Management Accumulation Managed Accounts Delivering Financial Security 3

5 Positioning For The Future Operating Income Mix Driving Growth/ROE Expansion Sales CAGR New Business ROE Int l MI 34% High Teens Int l PPI 23% High Teens ~85%+ Fee Based 84% High Teens New Life 33% Low Teens Growth Engines ~80% ~90% New LTC 17% Mid Teens Opportunistic Spread (13%) Low Teens Repositioning Redeployment E 2010/11E U.S. MI 61% Mid Teens Old Life/Spread Extract Capital Old LTC Improve ROE/Extract Capital Fee Based Includes Fee Based Retirement Income & Managed Money. Spread Includes Spread Based Retirement Income & Institutional 4

6 Today s Updates Priority Growth Opportunities International Fee Based Wealth Management & Retirement U.S. Mortgage Insurance Investment Portfolio Capital Optimization & Deployment 5

7 Strong International Platform Operating Income ($MM) Retirement Products PPI Canada Australia Europe & Other ~50% GNW Op Income E 25+ Countries 600+ Distribution Relationships 1,900+ Associates Global Risk Management Double Digit Growth 22% 2007 Operating ROE $3.4B Mortgage Insurance Unearned Premium Reserve (12/31/2007) 6

8 Payment Protection Overview 2007 Sales By Obligation Coverage 52% 16% 13% 11% 8% Personal Loan Mortgage Auto Credit Card Other Mix Sickness/Accident ~50% Life ~25% Unemployment ~25% 3-5 Year Average Life 200+ Financial Institutions Globally Distributor Branded Direct or Reinsurance Protected By: Waiting & Exclusion Periods Capitated Claim Payment Period Maximum Limits 7

9 Payment Protection Opportunity Sales By Region Established Markets ($B) 2.8 Penetrate Significant Customer Base New Products & Customers Continental Europe 1.4 Lender Structured Transactions U.K. & Ireland New Markets Structured New Markets Transfer Product/Risk Expertise Leverage Global Client Base Mexico, Poland, South Korea, Others 8

10 Global Mortgage Insurance Environment Demand Drivers: Homeownership Initiatives, Capital Regulation, Economic Environment Economies Generally Healthy Slowing Global Housing Finance & Appreciation Trends Most Pronounced in Spain, Ireland & U.K. Some Liquidity Impact On Global Housing Finance Significant Structural Differences vs. U.S. New Markets Develop Gradually 9

11 Comparing Mortgage Markets Risk Management U.S. Canada Australia Europe Credit Scoring External Yes Yes No U.K. Only Internal Yes Yes Yes U.K. Only Borrower Underwriting Yes Yes Yes Yes Property Appraisals Yes Yes Yes Yes Sub-Prime Products ~20% Limited Limited Limited Reduced Documents ~13% Self Self Limited Employed Employed Second Liens ~14% Limited Limited Limited Premium Payment Monthly Single Single Single Sub-Prime, Reduced Doc And Second Liens Based On Company Estimates 10

12 International Mortgage Insurance Strategy Primary Risk In Force ($B) 151 Canada Australia Europe / Other 12/31/2007 See Appendix For Details Regarding Global MI Risk In Force Canada & Australia Customer Penetration Underwriting & Pricing Discipline Ensure Exposure Management Expand Support Services Europe & Other Slowed Expansion Selective Geographies / Lenders Build Gradually For The Future 11

13 Expanding U.S. Wealth Management Assets Under Management ($B) AssetMark Acquisition Existing Platforms Yr CAGR ~ 34% ~ 33% ~ 36% Strong Organic & Acquisition Performance Advisor Expansion & Penetration Leveraging Practice Management Services Total Market AUM Outlook ($T) 3 Yr CAGR ~ 12% Independent Other Channels.7 ~ 17% ~ 11% Expect Future Growth Ahead of Market Product Innovation/Income Guarantees Expanded Services Offerings Acquisitions 1 Cerulli & Management Estimates 2010E 12

14 Positioned For Income Guarantee Market Individual VA (Retail + Rollover) 401(k) / 403(b) Managed Money Mutual Funds Market Size 1 ~ Market 9% 15%+ Growth 1 5-8% 15%+ Genworth Position Established Early Mover Established In Process ~$10 Trillion Opportunity for Income Guarantees 1 Company And 3 rd Party Estimates. Market Size In Trillions 13

15 U.S. Mortgage Insurance Overview Risk Mix Of Book An Important Differentiator Captive Reinsurance Protects Downside Product, Price & Guideline Actions In 2007/2008 Quality Revenue Dynamics 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% Primary Delinquency Rates Industry Genworth Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Industry Represents MGIC, PMI, UGI, ORI, and Triad Based on MICA Reports. Delinquency Rate Represents Number of Lender Reported Delinquencies Divided by Number of Remaining Policies Consistent with Industry Practices 14

16 U.S. Mortgage Insurance Portfolio Performing Under- Performing Risk In Force 70-75% 25-30% Portfolio Mix 91% Prime Book Avoided Sub-Prime Bulk & Second Liens Worked to Minimize Stacked Risk Factors Moved Actively On Risk & Pricing Guidelines With Market Shifts 2004 & Prior Books Appreciation Benefit Books Blended Performance & Reinsurance Protection Under-Performing Refers To Selected Product, Geographical and Book Year Combinations Where Ever-To-Date Actual Loss Ratio Performance Exceeds Ever-To-Date Pricing Expectations. Select Geographies Include CA, FL, AZ, NV and Great Lakes, Select Products Include Alt-A, A Minus and Sub-Prime. 15

17 Lender Captive Reinsurance Protection 63% GNW Flow Portfolio Has Lender Captive Reinsurance Coverage Protects Downside Risk Written on a Book Year Basis By Lender Attachment Points Are % of a Book Year s Original Risk In Force Reinsurance Premiums Deposited in 3rd Party Trust 40% Cede Excess of Loss Example 25% Cede Excess of Loss Example Premiums Losses Premiums Losses Lender 40% GNW Remaining Losses Lender 25% GNW Remaining Losses GNW 60% Lender GNW 2 nd Loss (4-14 Claims Layer) 1 st Loss (0-4 Claims Layer) GNW 75% Lender GNW 2 nd Loss (5-10 Claims Layer) 1 st Loss (0-5 Claims Layer) Captive Reinsurance Liability Limited to Funds in Trust, Not Subject to Lender Bankruptcy. Trust Balance Impacted by Future Premiums Received, Payment of Claims and Dividends. Percentage of GNW Portfolio in Captive Reinsurance Arrangements As of 12/31/07. 16

18 Lender Captive Attachment Progression 2006 Book Year Example $4.3B Original Risk In Force With Captive Reinsurance Coverage $173MM Losses = Sum of All Attachment Points 46 Lender Captives Comprise Total Actual Attachment Will Vary By Lender 2006 Attachment Trend As Of 4Q07 % Progression to Specific Lender Attachment Point RIF Remaining ($B) Ever to Date Incurred Losses ($MM) 0 50% % % %+ (Captive Benefit) $101 58% Progression to Aggregate Attachment Point Includes ~$1MM of Captive Reinsurance Benefit Aggregate Book Year Analysis Provided To Illustrate Directional Progression Toward Attachment. Data Presented in Aggregate For All Trusts. Actual Trust Attachment Will Vary By Individual Lender Contract. Additional Book Years Included in Appendix. Incurred Losses = Change in Reserves + Paid Claims. Information Excludes Quota Share Captive Arrangement Data. 17

19 Product Actions Taken For 2008 Products Not Insured By Genworth Sub-Prime Bulk Product Exits Alt-A >95% LTV Alt-A > 90% LTV, < 660 FICO A Minus Above 95% LTV, < 575 FICO 100 LTV < 620 FICO And Interest Only Flow New Insurance Written Sub-Prime A-Minus Alt-A Prime > 95% LTV 100% 5% 12% 2% 1% Guideline Restrictions Alt-A Primary & 2 nd, Purch. & Rate Term A Minus Primary Only 100 LTV 95% LTV In 85 Declining Markets Prime 95% LTV 80% Price Increases Alt-A ~43% In FICO Bucket A Minus ~18% Price Increase 100 LTV ~50% Increase For 56% of NIW 2008E Genworth Alt-A Consists Of Loans With Reduced Documentation Or Verification Of Income Or Assets And A Higher Historical And Expected Default Rate Than Standard Documentation Loans. 18

20 U. S. Mortgage Insurance Looking Ahead Market Returns To MI ($B) % 287 Book Value Supported Investor Briefing Scenario 100% Loss Severity $2.6 $0.5 Existing Business Underwriting Margin $0.7 Invest. Income New Business 12/31/07 12/31/12E 2008E Book Value $2.5 to $2.6B $ U.S. MI Flow NIW Market 1 1 Inside Mortgage Finance As Of January 31, 2008 Quality New Business $3B Investment Portfolio Captive Reinsurance Coverage See February 8, 2008 Investor Update In Its Entirety For Scenario Details 19

21 Investment Portfolio ($B) Investment Grade Public & Private Bonds Commercial Mortgages CMBS & ABS RMBS Cash & ST Non-Inv Grade Municipal 3% Sec Lending 3% Equity & LPs 2% Policy Loans 2% LTC Hedges/Others 2% $74 49% 12% 12% 7% 4% 4% 12/31/07 Quality Assessment ~50% Investment Grade Bonds Commercial Mortgages LTV ~52% Commercial MBS 98% Investment Grade Original Average LTV ~69% Avoided RMBS CDOs Securities Lending A-1/P-1 Municipals Underwritten to Underlying Credit Risk Considerations $2.9B Remaining Sub-Prime / Alt-A RMBS Substantial Markdowns Taken Below Investment Grade Under 4% Equities Less Than 1% 20

22 Sub-Prime Securities Update Sub-Prime RMBS ($MM) AAA AA A BBB/BB/B 1,486 Market Value 12/31/07 95% Level 2 Pricing Regular Performance Monitoring $71MM After-Tax Impairments 4Q 07 Primarily 2006 Vintage 75% < BBB 25% Single A ($284) Change In Market Value Since 9/30/07 21

23 Five Levers to Drive Shareholder Value Core Growth & Improving Returns Impact E 2009/10E International/Retirement & Protection U.S. Mortgage Insurance Capital Management & Redeployment Cost Efficiencies Neutral/ Investment Performance Neutral + + Smart Use Of Capital Markets

24 Focus On Redeploying Low Return Capital Select Blocks Targeted ($B) 2.8 Life / Annuities Reassessed Blocks Under Integrated Retirement & Protection Organization Assessing Reinsurance, Capital Markets and Closed Block Options Old LTC 8 to 12 Percent Pricing Action Pursuing Extraction Options Individual Or Blended Blocks 12/31/

25 The Case For Genworth Shifting Mix For Growth & Returns Expanding International & Wealth/Retirement Platforms Capital & Risk Management Discipline ROE Expansion Path Manageable Disruption In %-14% 10.7% 11.0% 11.0% Target 1 See Genworth s 4Q 05 income press release (dated 1/26/06) for reconciliation 24

26 Appendix 2008 Genworth Financial, Inc. All rights reserved.

27 Captive Reinsurance - Disclosure Captive Disclosure Q Original Book Sum of Loss Attachment Points ($MM) Progression to Attachment Point Ever to Date Incurred Losses ($MM) Additional Losses to Reach Aggregate Attachment ($MM) Aggregate % to Attachment Book Year RIF ($B) Current RIF ($B) 2005 Total % 0-50% % % Attached Total % 0-50% % % Attached Total % 0-50% % % Attached Q07 Captive Benefit in Quarter ($MM) 1 Aggregate Book Year Analysis Provided To Illustrate Directional Progression Toward Attachment. Data Presented in Aggregate For All Trusts. Actual Trust Attachment Will Vary By Individual Lender Contract. Incurred Losses = Change in Reserves + Paid Claims Information excludes Quota Share Captive Arrangement Data. 26

28 A 5-Year View Key Assumptions Existing Portfolio Claim Frequency Expectation for Every 100 Loans Claim Frequency Captives Portfolio Ever-To-Date Lifetime Attach? 04 & Prior No Yes 08 & Forward - 4 No Performing Well 5 Under-Performing 13 Book Value Profile 100% Severity $2.6 $0.5 $0.7 Invest. Income New Business Existing Business Underwriting Margin 12/31/07 12/31/12E % Severity: $.1B Additional Losses By 2012 Book Value Progression 100% Severity $3.9+ $3.9+ Company Estimates; Captive Attachment Based on Aggregate Analysis Actual Results Will Vary By Lender Lifetime Loss Ratio Reflects Weighted Average Lifetime Expected Loss Ratio For Total Portfolio Existing Business and Investment Income Are Net of Income Taxes Existing Business Includes After Tax Premium From International Support Arrangements Projected Book Value Excludes Impact of Dividends From Our U.S. Mortgage Insurance Subsidiaries to Genworth $2.6 $ E 2009E 2010E 2011E 2012E 27

29 Scenarios: Exhaust Captives or Eliminate Book Value Exhaust Captive Coverage Claim Frequency Assumptions for Every 100 Loans Captives Claim Frequency Portfolio Attach? Ever-To-Date Lifetime U.S. Mortgage Ins. Book Value To 0 Claim Frequency Assumptions for Every 100 Loans Captives Claim Frequency Portfolio Attach? Ever-To-Date Lifetime 04 & Prior No & Prior No Yes Yes & Forward No & Forward No - 4 Performing 8 Under-Performing 25 Performing 10 Under-Performing 81 Book Value Profile 100% Severity $0.6 $2.6 $(0.3) Existing Business Underwriting Margin Invest. Income New Business $ /31/07 12/31/ % Severity: $.2B Additional Losses Incurred By 2012 Company Estimates; Captive Attachment Based on Aggregate Analysis Actual Results Will Vary By Lender Existing Business and Investment Income Are Net of Income Taxes Existing Business Includes After Tax Premium From International Support Arrangements Projected Book Value Excludes Impact of Dividends From U.S. Mortgage Insurance Subsidiaries to Genworth 28

30 U.S. MI Portfolio Delinquency Rates ($B) Total FICO > 660 FICO FICO < 620 Primary Risk In Force 3Q 07 4Q 07 3Q 07 4Q 07 3Q 07 4Q 07 3Q 07 4Q 07 Primary Risk In Force $28.1 $31.3 $19.7 $22.1 $5.9 Default Rate 3.4% 4.3% 1.9% 2.5% 6.3% 2007 Policy Year $8.1 $12.1 $5.5 $8.5 $1.7 Default Rate 1.4% 2.8% 0.9% 1.7% 1.7% 2006 Policy Year $6.0 $5.9 $4.2 $4.1 $1.2 $1.2 $0.6 Default Rate 3.8% 5.4% 2.2% 3.6% 6.0% 8.3% 12.6% 2005 Policy Year $4.4 $4.2 $3.1 $3.0 $0.9 $0.9 $0.4 Default Rate 4.0% 5.2% 2.4% 3.2% 6.6% 8.5% 12.2% 2004 & Prior Policy Years $9.6 $9.1 $6.8 $6.5 $2.1 Default Rate 4.3% 4.7% 2.2% 2.4% 8.8% Fixed Rate $26.2 $29.4 $18.2 $20.6 $5.6 $6.1 $2.4 Default Rate 3.3% 4.0% 1.7% 2.1% 6.2% 7.2% 10.3% ARMs $1.9 $1.9 $1.5 $1.5 $0.3 $0.3 $0.1 Default Rate 4.1% 7.2% 3.0% 5.9% 9.0% 12.0% 17.1% LTV > 95% $7.9 $8.8 $4.7 $5.4 $2.1 Default Rate 4.6% 5.8% 2.1% 2.6% 6.4% Alt-A $1.9 $1.9 $1.5 $1.6 $0.3 $0.3 $0.1 Default Rate 4.1% 6.2% 3.3% 5.1% 7.9% 11.7% 13.2% Interest Only & Option ARMs $3.6 $4.0 $2.9 $3.3 $0.5 $0.5 $0.2 Default Rate 3.1% 5.6% 2.6% 5.0% 5.7% 9.2% 9.9% $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % = Significant Increases in Delinquency Rates Loans With Unknown FICO Scores Are Included in the FICO Category Delinquency Rate Represents Number of Lender Reported Delinquencies Divided By Number of Remaining Policies Consistent With Mortgage Insurance Industry Practices GNW Alt-A Consists of Loans With Reduced Documentation or Verification of Income or Assets And a Higher Historical And Expected Default Rate Than Standard Documentation Loans. 29

31 Comparing Global MI Risk In Force ($B) Vintage & Prior Bulk U.S. Effective LTV 1 94% 93% 88% <80% ~75% Canada Effective LTV 86% 77% 71% ~60% 15 ~50% Australia Effective LTV 75% 71% 63% ~60% 10 ~50% Effective LTV 8 92% 87% ~70% Europe Canada and Australia Solid Embedded Home Price Appreciation 1 Book Year Risk In Force and Effective LTV Based on Flow; Total Bulk Shown Separately Primary Risk In Force as of 12/31/07 30

32 Sub-Prime RMBS Holdings ($MM) <BBB 6% A 21% AA 22% AAA 51% Total = $1, & Prior st Half nd Half 2007 Stress Test Prior To Investment Avoided Riskier Originators & 2nd Liens Underlying LTVs ~ 80% ~4 Year Average Life 2007 Impairments: $78MM; 77% BBB & Below Ratings Reflect Levels As Of 12/31/07 31

33 Alt-A RMBS Holdings ($MM) Total = $1,449 <BBB 2% A 19% AA 29% AAA 50% & Prior st Half nd Half ~85% Fixed Rate Mortgages (> 5 Year) Weighted Average FICO ~710 Underlying LTVs ~73% 2007 Impairments: $26MM; 73% BBB & Below Ratings Reflect Levels As Of 12/31/07 32

34 Capital Generation ($B) U.S. Stat Earnings And Capital Release 2007E 2008E Actions Retirement & Protection Growth U.S. Mortgage Insurance Decline International Increase Reflects Growing In Force Capital Markets Efficiency Life XXX and AXXX Securitizations Block Extraction Other Capital Mgmt Group Sale Selective Reinsurance Contingency Reserve Release 2007 Equity Unit Conversion Debt Capacity & Service 33

35 Capital Deployment ($B) 2007E 2008E Actions New Business Funding Statutory Strain Required Capital Bolt-On Acquisition Pipeline Repurchases/ Dividends International, Annuities & LTC Growth Pipeline Maintained Target Fee Based & International $1B Authorization Through 09: $100MM Repurchased Through January Ending Deployable Capital

36 Use Of Non-GAAP Measures This presentation includes the non-gaap financial measure entitled "net operating income." The chief operating decision maker evaluates segment performance and allocates resources on the basis of net operating income. The company defines net operating income (loss) as income (loss) from continuing operations excluding after-tax net investment gains (losses) and other adjustments and infrequent or unusual non-operating items. This metric excludes these items because the company does not consider them to be related to the operating performance of its segments and Corporate and Other activities. A significant component of the net investment gains (losses) is the result of credit-related impairments and credit-related gains and losses, the timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) are often subject to Genworth s discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Infrequent or unusual non-operating items are also excluded from net operating income if, in the company s opinion, they are not indicative of overall operating trends. While some of these items may be significant components of net income in accordance with GAAP, the company believes that net operating income, and measures that are derived from or incorporate net operating income, are appropriate measures that are useful to investors because they identify the income attributable to the ongoing operations of the business. However, net operating income should not be viewed as a substitute for GAAP net income. In addition, the company's definition of net operating income may differ from the definitions used by other companies. There were no infrequent or unusual non-operating items excluded from net operating income for the periods presented in this press release other than a $14 million after-tax expense recorded in the first quarter of 2007 related to reorganization costs. The tables in the appendix of this presentation reflect net operating income (loss) as determined in accordance with Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information, and a reconciliation of net operating income (loss) of the company s segments and Corporate and Other activities to net income. Due to the unpredictable nature of the items excluded from the company's definition of net operating income, the company is unable to reconcile its outlook for net operating income to net income presented in accordance with GAAP. In this presentation, the company also references the non-gaap financial measure entitled operating return on equity or operating ROE. The company defines operating ROE as net operating income divided by average ending stockholders equity, excluding accumulated other comprehensive income (AOCI) in average ending stockholders equity. Management believes that analysis of operating ROE enhances understanding of the efficiency with which the company deploys its capital. However, operating ROE as defined by the company should not be viewed as a substitute for GAAP net income divided by average ending stockholders equity. The tables in the appendix of this presentation include a reconciliation of operating ROE to GAAP net income divided by average ending stockholders equity. Due to the unpredictable nature of net income and average ending stockholders equity excluding AOCI, the company is unable to reconcile its outlook for operating ROE to GAAP net income divided by average ending stockholders equity. 35

37 Consolidated Net Income by Quarter (amounts in millions, except per share amounts) 36

38 37

39 Reconciliation of Operating ROE (amounts in millions) 38

40 Selected Operating Performance Measures This presentation also contains selected operating performance measures including sales, assets under management, insurance inforce or risk in-force which are commonly used in the insurance and investment industries as measures of operating performance. Management regularly monitors and reports sales metrics as a measure of volume of new and renewal business generated in a period. Sales refers to (1) annualized first-year premiums for term life insurance, long-term care insurance and Medicare supplement insurance; (2) new and additional premiums/deposits for universal life insurance, linked-benefits, spread-based and variable products; (3) gross flows and net flows, which represent gross flows less redemptions, for our managed money business; (4) written premiums and deposits, gross of ceded reinsurance and cancellations, and premium equivalents, where we earn a fee for administrative services only business, for payment protection insurance; (5) new insurance written for mortgage insurance, which in each case reflects the amount of business the company generated during each period presented; and (6) written premiums, net of cancellations, for our Mexican insurance operations. Sales do not include renewal premiums on policies or contracts written during prior periods. The company considers annualized first-year premiums, new premiums/deposits, gross and net flows, written premiums, premium equivalents and new insurance written to be a measure of the company s operating performance because they represent a measure of new sales of insurance policies or contracts during a specified period, rather than a measure of the company s revenues or profitability during that period. Management regularly monitors and reports assets under management for the company s managed money business, insurance in-force and risk in-force. Assets under management for the company s managed money business represent third-party assets under management that are not consolidated in our financial statements. Insurance in-force for the company s life insurance, international mortgage insurance and U.S. mortgage insurance businesses is a measure of the aggregate face value of outstanding insurance policies as of the respective reporting date. Risk in-force for the company s international mortgage insurance and U.S. mortgage insurance businesses is a measure that recognizes that the loss on any particular mortgage loan will be reduced by the net proceeds received upon sale of the underlying property. The company considers assets under management for the company s managed money business, insurance in-force and risk in-force to be a measure of the company s operating performance because they represent a measure of the size of the company s business at a specific date, rather than a measure of the company s revenues or profitability during that period. These operating measures enables the company to compare its operating performance across periods without regard to revenues or profitability related to policies or contracts sold in prior periods or from investments or other sources. 39

41 Cautionary note regarding forward-looking statements This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Forward-looking statements may be identified by words such as expects, intends, anticipates, plans, believes, seeks, estimates, will, or words of similar meaning and include, but are not limited to, statements regarding the outlook for our future business and financial performance. Forward-looking statements are based on management s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks, including the following: Risks relating to our businesses, including interest rate fluctuations, downturns and volatility in equity and credit markets, defaults in portfolio securities, downgrades in our financial strength and credit ratings, insufficiency of reserves, legal constraints on dividend distributions by subsidiaries, competition, availability and adequacy of reinsurance, defaults by counterparties, regulatory restrictions on our operations and changes in applicable laws and regulations, legal or regulatory investigations or actions, political or economic instability, the failure or any compromise of the security of our computer systems, and the occurrence of natural or man-made disasters or a pandemic disease; Risks relating to our Retirement and Protection segment, including unexpected changes in morbidity and mortality, accelerated amortization of deferred acquisition costs and present value of future profits, goodwill impairments, reputational risks as a result of our plans to file for an increase in the premiums on certain in-force long-term care insurance products, medical advances such as genetic mapping research, unexpected changes in persistency rates, increases in statutory reserve requirements, and the failure of demand for long-term care insurance to increase as we expect; Risks relating to our International segment, including political and economic instability, foreign exchange rate fluctuations, unexpected changes in unemployment rates, deterioration in economic conditions or decline in home price appreciation, unexpected increases in mortgage insurance default rates or severity of defaults, decreases in the volume of high loan-to-value international mortgage originations, increased competition with government-owned and government-sponsored entities offering mortgage insurance, changes in regulations, and growth in the global mortgage insurance market that is lower than we expect; Risks relating to our U.S. Mortgage Insurance segment, including the influence of Fannie Mae, Freddie Mac and a small number of large mortgage lenders and investors, decreases in the volume of high loan-to-value mortgage originations or increases in mortgage insurance cancellations, increases in the use of simultaneous second mortgages and other alternatives to private mortgage insurance and reductions by lenders in the level of coverage they select, unexpected increases in mortgage insurance default rates or severity of defaults, deterioration in economic conditions or a decline in home price appreciation, increases in the use of reinsurance with reinsurance companies affiliated with our mortgage lending customers, increased competition with government-owned and government-sponsored entities offering mortgage insurance, changes in regulations, legal actions under Real Estate Settlement Practices Act, and potential liabilities in connection with our U.S. contract underwriting services; and Other risks, including the possibility that in certain circumstances we will be obligated to make payments to GE under our tax matters agreement even if our corresponding tax savings are never realized and payments could be accelerated in the event of certain changes in control, and provisions of our certificate of incorporation and by-laws and our tax matters agreement with GE may discourage takeover attempts and business combinations that stockholders might consider in their best interests. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise. 40