Good morning, ladies and gentlemen, and welcome to Genworth Financials First Quarter 2022 Earnings Conference Call. My name is Kevin, and I will be your coordinator today. At this time, all participants are in a listen-only mode. We will facilitate a question-and-answer session towards the end of the conference call. As a reminder, this conference is being recorded for replay purposes. [Operator Instructions] Also, we ask that you refrain from using cell phones, speaker phones or headsets during the Q&A portion of today’s call. I would now like to turn the presentation over to Sarah Crews, Director of Investor Relations. Please go ahead.

Thank you, operator. Good morning, and welcome to Genworth's first quarter 2022 earnings call. Today you will hear from our President and Chief Executive Officer, Tom McInerney; followed by Dan Sheehan, our Chief Financial Officer and Chief Investment Officer. The slide presentation that accompanies this call is available in the investor relations section on the Genworth website, investor.genworth.com. Our earnings release and financial supplement can also be found there and we encourage you to review these material. Following our prepared remarks, we will open the call up for a question-and-answer period. In addition to our speakers, Brian Haendiges, President of our U.S. Life Insurance Segment, and Jerome Upton, Deputy Chief Financial Officer and Controller will also be available to take your questions. During the call this morning, we may make various forward-looking statements. Our actual results may differ materially from such statements. We advise you to read the cautionary notes regarding forward-looking statements in our earnings release and related presentations as well as the risk factors of our most recent annual report on Form 10-K as filed with the SEC. This morning's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors. In our financial supplement, earnings release and investor materials non-GAAP measures have been reconciled to GAAP where required in accordance with SEC rules. Also references to statutory results are estimates due to the timing of the filing of the statutory statements. And now, I'll turn the call over to our President and CEO, Tom McInerney.

Thank you Sarah. Good morning everyone and thank you for joining our first quarter earnings call. Genworth had a very good start to the year with solid results in the first quarter, and important progress against our strategic priorities, strengthening our ability to drive value for shareholders. This progress has been delivered in a period marked by significant market volatility driven by geopolitical and economic challenges as we enter the post academic era. I am proud of our team's ability to deliver these results in this environment, while serving our almost 3 million policyholders. I'm also proud of the performance of Enact; our mortgage insurance subsidiary has delivered thus far in his first year as a public company. As recently announced by Enact, the company has initiated a quarterly dividend program, which has been approved by Enact's board of directors. Enact will issue its first quarterly dividend of $0.14 per share in the second quarter. Genworth will receive approximately $90 million as majority shareholder. In addition to its quarterly dividend program, Enact is planning to return additional capital to shareholders later in 2022. Based on projected cash flow from Enact and Genworth improved financial condition, Genworth’s board authorized a new share buyback program that was announced on Monday. Now I want to briefly review our first quarter results. U.S. GAAP net income was $149 million for the first quarter, while adjusted operating income was $131 million or $0.25 per share. These results were led by Enact which reported $135 million and adjusted operating income. U.S. Life reported an adjusted operating loss of $4 million for the quarter, driven by an operating loss of $79 million and life insurance, mostly offset by strong performance and LTC insurance and annuities. Life Insurance loss included a number of one-time items that Dan will…

Thank you, Tom. Good morning, everyone. In the first quarter we continue to build on the strong foundation we created in 2021 and enhanced our financial flexibility. We had solid earnings in the quarter and positive cash flows that enabled us to repurchase a portion of our 2024 debt maturities, bringing us closer to our $1 billion debt target. In recognition of our significant debt reduction over the past year, and improve risk profile, we received three ratings upgrades with the most recent March from S&P Global ratings. Our businesses are well capitalized with an estimated PMIER sufficiency ratio for Enact of 176% and estimated RBC ratio for the life companies of 296% at March 31. Holding Company cash was more than $100 million above our cash target of two times annual debt service at the end of the quarter. I'm tremendously pleased with our progress and how we transformed and reposition the business following the announcement of our five strategic priorities last year. Now that we have a clear path to achieving our debt target, and generating meaningful excess cash flows, we're well positioned to return capital to shareholders, an important priority for Genworth. I will discuss our capital allocation strategy, after reviewing our first quarter financial results and drivers. As Tom indicated earlier, the first quarter served as a strong start to the year as shown on slide four of the investor presentation with net income of $149 million and adjusted operating income was $131 million or $0.25 per share. In the prior quarter, we had net income of $163 million and adjusted operating income of $164 million or $0.32 per share. Results in the current quarter reflect adjusted operating income of $135 million from Enact, and $9 million from our runoff segments partially offset by adjusted operating…

Ladies and gentlemen, we will now begin the Q&A portion of the call. [Operator Instructions] And our first question today comes from Ryan Gilbert of BTIG.

Hi, thanks good morning, guys. On the LTC advice and service offerings, I'm wondering if you could frame up the addressable market and competition for that type of product and as well as the I guess return potential relative to LTC insurance.

Great question, Ryan. So we're still reviewing the -- a broad range of LTC services and LTC products. As I said in my remarks, based on conversations with third parties, the rating agencies and others, we think their traditional full LTC risk bearing products are very capital intensive. And so I think we're focused more now in terms of initially the initial path forward on services, that would be more advice and counsel to individuals that may or may not have insurance with us or anyone else, but helping them navigate the very complex caregiving market. We've, if you look at the baby boomers, there are 76 million less than 10% actually own LTC products, so that means 90% down, but they're two thirds of them will need long term care at some point. So two thirds of that amount would make the general size of the market about 50 million people that need help. And we've paid over 330,000 claims overtime, have a lot of experience, have a nurse network that works with individuals to develop care plans. And then we have a very broad provider network, I think relationships with about 90,000 providers. And so we really look to help families and individuals with disabilities to navigate the system on a fee basis. We'd hope to negotiate arrangements with providers that provides discounts so that we would do the work for the policyholder -- for the individuals needing the care and at an all-in cost lower than what they would do on their own. So that's the direction we're heading in. We'll have more to say, I think we've made good progress. I think in the second or third quarter we'll probably be able to be more definitive on the exact service offerings that we look to do. We'll continue to work on LTC products. As we said before we've been talking to reinsurance or number of reinsurers that want to participate with us. But we do think the returns given the capital requirements are not as good as the returns on the fee advice business.

Okay, got it. Second question on holding company cash, it looks like Holdco other expenses were ahead of ahead of my estimate. Anything to call out there in that line? And how should we think about how holding company other expenses will trend through the rest of the year?

Yes, thanks, Ryan. Good question. So I covered most of the items in my script. The one thing I did not touch on, every first quarter, if you if you look back through history, we have employee benefit payments that go out and then we get reimbursed for those throughout the next three quarters. And the net cost at the corporate level is deminimis. And so you're going to see that every first quarter that we have an outflow, and then get paid back over the rest of the year. So I would just exclude that if you will, from the way that you project sort of the overall cash payments. I would also note that we did increase the forecast from $200 million to $200 million to $250 million this quarter, because we feel very good about the path that we're currently on.

Okay, got it. Thanks.

[Operator Instructions] And as there are no further questions, I will turn the call back to Mr. McInerney for closing comments.

Thank you very much, Kevin. So I want to thank all the investors and others for being on the call today. I think we're very proud of the significant progress we made in 2021, moving into 2022 looking to return capital to shareholders. As Dan and I mentioned, we're making progress on our priorities. And we also will have more to say in the future about where we're going on our new global care solution business, gave you some sense today that it's likely to be more focused on advice and services, because those businesses would be much less capital intensive. Look forward to the upcoming May 19 annual stockholders meeting. Looking forward to seeing many of you there. And thanks again for joining the call. You're supported Genworth and being an investor. Back to you, Kevin.

Thank you. Ladies and gentlemen, this concludes Genworth financials first quarter conference call. Thank you for your participation. At this time, the call will end.