2016 INVESTOR DAY Smarter M.I. December 7 th , 2016 2016 Investor - PowerPoint PPT Presentation

2016 INVESTOR DAY Smarter M.I. December 7 th , 2016 2016 Investor Day Genworth MI Canada Inc. 1

Forward-looking and non-IFRS statements Public communications, including oral or written communications such as this document, relating to Genworth MI Canada Inc. (the “Company”, “ Genworth Canada” or “MIC”) often contain certain forward-looking statements. These forward-looking statements include, but are not limited to, statements with respect to the implementation of the changes introduced by the Government and the potential impact on new insurance written, as well as the Company’s future operating and financial results, sales expectations regarding premiums written, capital expenditure plans, dividend policy and the ability to execute on its future operating, investing and financial strategies, the Canadian housing market, and other statements that are not historical facts. These forward-looking statements may be identified by their use of words such as “may”, “would”, “could”, “will,” “intend”, “plan”, “anticipate”, “believe”, “seek”, “propose”, “estimate”, “expect”, and similar expressions. These statements are based on the Company’s current assumptions, including assumptions regarding economic, global, political, business, competitive, market and regulatory matters. These forward-looking statements are inherently subject to significant risks, uncertainties and changes in circumstances, many of which are beyond the ability of the Company to control or predict. The Company’s actual results may differ materially from those expressed or implied by such forward-looking statements, including as a result of changes in the facts underlying the Company’s assumptions, and the other risks described in the Company’s Annual Information Form dated March 16, 2016, its Short Form Base Shelf Prospectus dated August 9, 2016, its most recently issued Management’s Discussion and Analysis and all documents incorporated by reference in such documents. Management’s current views regarding the Company’s financial outlook are stated as of the date hereof and may not be appropriate for other purposes. Other than as required by applicable laws, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. To supplement its financial statements, the Company uses select non-IFRS financial measures. Such non-IFRS financial measures include net operating income, operating earnings per common share (diluted), operating return on equity, insurance in-force, new insurance written, loss ratio, delinquency ratio, investment yield, credit score, gross debt service ratio, ordinary dividend payout ratio, and book value per Common Share (diluted) including accumulated other comprehensive income (“AOCI”) . The Company believes that these non-IFRS 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-IFRS measures do not have standardized meanings and are unlikely to be comparable to any similar measures presented by other companies. These measures are defined in the Company’s glossary, which is posted on the Company’s website at http://investor.genworthmicanada.ca. A reconciliation from non-IFRS financial measures to the most readily DRIVING VALUE THROUGH CUSTOMIZED SERVICE EXPERIENCE comparable measures calculated in accordance with IFRS, where applicable, can be found in the Company’s most recent Management’s Discussion and Analysis, which is posted on the Company’s website and is also available at www.sedar.com. 2016 Investor Day Genworth MI Canada Inc. 2

Agenda and key themes Strategic outlook Dynamic risk management Smarter M.I. Financial strategy and insights Question and answer session 2016 Investor Day Genworth MI Canada Inc. 3

Stuart Levings President and Chief Executive Officer Strategic outlook 2016 Investor Day Genworth MI Canada Inc. 4

Genworth Canada overview MARKET FACTS (Q3 2016) WHO WE ARE LARGEST private residential $6.6 billion $3.6 billion mortgage insurer in Canada Shareholders’ equity Total assets Helped ~1M+ families achieve homeownership $3.0 billion* 92 million Supported 250+ Market capitalization Shares outstanding Canadian lenders WHAT WE DO 1 • Mandatory for less than 20% down payment Mortgage Insurance 1 2 Mortgage Application • Covers 100% of loan, secured by property Application and Premium • Upfront non-refundable premium • Lender receives protection against loss from Homebuyer Mortgage lender Mortgage mortgage default (originates mortgage) insurer • Capital relief for lenders 4 3 Mortgage Loan Insurance Contract Note: Company sources 2016 Investor Day Genworth MI Canada Inc. 5 1. Denotes transactional mortgage insurance. * As at December 2 nd , 2016.

Conservative first-time homebuyer profile Single- detached residential median prices well below market…. Genworth Canada $1.4M Market $466k $778k $579k $585k $442k Greater Toronto Greater Vancouver Greater Calgary ….with similar household median incomes Genworth Canada $93k Market $98k $133k $90k $92k $97k Greater Toronto Greater Vancouver Greater Calgary Greater Toronto Greater Vancouver Greater Calgary % of loans with multiple 70% 72% 70% borrowers % of borrowers 21% 31% 12% buying condos Source: Genworth internal data, market data median price (CREA); market income (calculated using Stats Canada national income and regional population) 2016 Investor Day Genworth MI Canada Inc. 6 Note: % of multiple borrowers and % of borrowers buying condos based on transactional NIW data as at Q3 ’16 YTD.

2016 key accomplishments Risk well-distributed ; High quality and diversified Portfolio insurance market portfolio re-balancing in insurance portfolio 1 leader with approximately response to tougher 50% market share in 2016 economic environment CREDIT SCORE 752 2016 loss ratio trending Proactive engagement Strong financial towards lower half of range with regulator to influence performance; 5% increase new capital framework in quarterly dividend 25 % to 35 % range DRIVING VALUE THROUGH MORTGAGE INSURANCE THOUGHT LEADERSHIP Note: Company sources. Portfolio insurance market share based on Q215-Q216. 2016 Investor Day Genworth MI Canada Inc. 7 1. Credit score references the Q3 2016 YTD timeframe.

Our environment today Key takeaways Risk Assessment  GDP growth projection supportive in 2017 (Canada 2.0%; US 2.1%) 1 Economic  Oil prices stabilizing  Housing risk in Toronto and Vancouver remains elevated Housing  Government changes contributing to soft landing  NIW quality & mix remains strong Insurance  Mortgage reg. changes to have positive long-term impact Portfolio on portfolio quality  Mortgage reg. changes impacting market size, but driving safety and soundness Regulatory  New capital framework driving higher capital requirements  Private MI PRMHIA limit increasing to $350 billion STABLE TO IMPROVING MACROECONOMIC ENVIRONMENT 1. Source: GDP projections sourced from Bank of Canada Monetary Policy Report October 2016. 2016 Investor Day Genworth MI Canada Inc. 8

Regulatory changes Regulatory change Business implications Performance implications Smaller portfolio Portfolio insurance insurance market size; ‘Purpose Test’ rules  Moderately lower net opportunity for private premiums written in mortgage insurance the near term Portfolio insurance product restrictions Improved portfolio quality Mortgage rate stress test  Reduced loss ratio Short-term reduction volatility due to in transactional higher premium rates market size Risk sharing proposal Premium rate increases required to Targeting pricing New capital framework address higher capital ROE of ~13% 2016 Investor Day Genworth MI Canada Inc. 9

Impact of rate ‘stress test’ Q3 YTD transactional NIW 1 GDS & TDS breach drill-down 2 Eligible NIW (within debt servicing limits) Both GDS and TDS breach Within 200 bps of limit TDS > 44% limit Ineligible products >200 above limit GDS > 39% limit 4% 7% 5% 50% 17% 50% 66% Borrowers within 200 bps of GDS breach Large proportion impacted by TDS breach only, can reduce target house price by ~10% which is within borrowers’ control to change and qualify to make a purchase BORROWER BEHAVIOUR EXPECTED TO EVOLVE….REDUCING THE IMPACT OF CHANGES TO 15%-25% OF 2017 TRANSACTIONAL NEW INSURANCE WRITTEN 1. Product exclusions include: refinances, rentals, credit score <600, property value >$1MM excluded. 2. GDS/TDS re-calculated to determine eligibility under 4.64% interest rate 2016 Investor Day Genworth MI Canada Inc. 10