Good morning, ladies and gentlemen, and welcome to Genworth Financial's Fourth Quarter 2024 Earnings Conference Call. My name is Katie, and I will be your coordinator today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. [Operator Instructions] I would now like to turn the presentation over to Brian Johnson, Senior Vice President of Financial Planning and Analysis. Please go ahead.

Thank you, and good morning. Welcome to Genworth's fourth quarter 2024 earnings call. The slide presentation that accompanies this call is available on the Investor Relations section of the Genworth website, investor.genworth.com. Our earnings release and financial supplement can also be found there, and we encourage you to review these materials. Speaking today will be Tom McInerney, President and Chief Executive Officer; and Jerome Upton, Chief Financial Officer. Following our prepared remarks, we will open up the call for a question-and-answer period. In addition to our speakers, Jamala Arland, President and CEO of our U.S. Life Insurance business; Kelly Saltzgaber, Chief Investment Officer; and Samir Shah, CEO of CareScout Services, will 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 presentation 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 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 filings of the statutory statements. And now, I'll turn the call over to our President and CEO, Tom McInerney.

Thank you, Brian. Good morning, everyone, and thank you for joining Genworth's earnings call for the fourth quarter. Before I address our fourth quarter and full year earnings performance, I'd like to reflect on our achievements in the past year. In 2024, we commemorated the 20th anniversary of Genworth's initial public offering. It was an opportunity to celebrate our team members who work each day to help families navigate the aging journey with confidence, along with the contributions of our subsidiary and app, as they help more Americans achieve their dream of homeownership. Looking back at Genworth's beginnings and the challenges we faced, I'm very proud of the progress we've made and the momentum we're building as we look ahead. You can see that momentum in the milestones we achieved in 2024. It was the 12th year of our multiyear rate action, or MYRAP, which is helping us maintain the self-sustainability of our legacy LTC book of business. Approved in-force rate actions under the MYRAP have contributed a total of $31.2 billion and net present value to our legacy business since 2012. We've achieved 87% of the MYRAP's total projected value as of December 31, reducing our future realliance on rate increases. We continued our impressive debt reduction journey in 2024 as well, ending the year with $790 million in holding company debt, down from $4.2 billion at the beginning of 2013 and from $856 million at the end of 2023. As of February 14, Genworth has spent a total of $565 million on our share repurchase program since our initial authorization in May 2022. Since then, we have reduced our outstanding shares by 18% from approximately 511 million to 490 million shares. 2024 was also a year of progress in the build-out of CareScout, which will drive our long-term…

Thank you, Tom, and good morning, everyone. I'm pleased with the ongoing strong performance and value creation delivered by Enact, the progress on our multiyear rate action plan, or MYRAP, continued build-out of our CareScout business as well as the effectiveness of our share repurchase program and debt optimization in 2024. I'll first discuss our fourth quarter and full year results in more detail, followed by the results of our annual U.S. life assumption reviews. Then I will provide an update on our investment portfolio and holding company liquidity before we open the call for Q&A. As shown on Slide 6, fourth quarter adjusted operating income was $15 million, driven by Enact. Our long-term care insurance segment reported an adjusted operating loss of $104 million, driven by a liability remeasurement loss related to the actual variances from expected experience, or A to E, as well as the net unfavorable impact of assumption updates. To date, the volatility related to the A to E and assumption updates has been primarily from our unprofitable policy cohorts, where the net premium ratio was capped at 100%. Experience in the more profitable or uncapped cohorts primarily impacts the net premium ratio and, therefore, flows more gradually through the P&L over time. As we move further from the January 2021 transition date of the LDTI accounting standard for U.S. GAAP, we may see increased volatility from the uncapped cohorts, with more of the impact related to the A to E and assumption updates recognized immediately in the P&L. Since the implementation of LDTI in 2023, we have seen an average quarterly loss from the A to E of about $65 million and expect we could continue to see losses at this level in 2025. Life and Annuities reported adjusted operating income of $5 million in…

[Operator Instructions] We'll take our first question from Ryan Krueger with KBW.

My first question was on CareScout Services. Can you give us a little more color on how you expect the revenue to emerge? I guess, do you expect to start generating revenues in 2025? And then maybe can you give us some thoughts on how that could ramp up over the next several years?

Ryan, I'll just start to say that we already have revenues in CareScout Services because of the assessment business. We've been -- as I mentioned, we've been in that business for quite a while. The new revenues from the matches where we have a match between Genworth at this point, a Genworth policyholder and a CareScout Quality Network, our revenue from that is we share in part of the discount. Samir is here, and I introduced him on the call. And so Samir is running that business, so I'll ask Samir Shah if he has any additional comments on that.

Ryan, thank you for question. Yes, as Tom shared, look, we're very energized and enthusiastic about the progress that we had with the network in '24, and we plan to grow our products and our customer base in 2025. As we've shared before, the way CareScout makes revenue from the CareScout Quality Network is straightforward. We negotiate discounts with providers who join the network. And then we share in that discounted rate reduction with the insurer and their policyholder. So as an example, if home care costs between $5,000 and $6,000 a month, a 20% discount for us would amount to $1,000 in rate reduction and savings. We keep $250 of that every month for building and maintaining the network, and we pass the rest of it to the insurer and their policyholder. We cover that over the length of the claim. Obviously, the actual revenue differs based on the type of claim, the type of care and the length of the claim that the person receives.

Ryan, do you have any follow-ups on that?

Separate question. I guess -- actually 2 quick ones. One, do you have an update on the timing of the U.K. court case? I'll start with that first.

Yes. So Ryan, great question. That's the court case between AXA and Santander, which we will participate, and that is scheduled for a few weeks from now, in March. And I think it's always hard to predict how long it would go. But my understanding is a court case like this, if it ends up going to trial and there's no settlement, would be about 6 weeks. But it starts in the early March.

Okay. And then will you fund the $75 million capital contribution into the new CareScout Insurance entity from holding -- existing holding company resources?

Yes. Jerome, do you want to add anything to that?

I would just say, Ryan, we have a strong base operating plan from a cash flow perspective, and that is included in that base plan. And given what Tom highlighted about AXA and the fact that the court case is going to be started in early March and the timing and the dollar amount is unknown, that is not in our base plan. So we are funding our growth initiatives out of the holding company base plan.

[Operator Instructions] Ladies and gentlemen, I will now turn the call back over to Mr. McInerney for closing remarks.

Thank you, Katie, and thanks to all of you for joining the call today. To close, we're very proud of Genworth's strong operational and financial performance in 2024 and the growth in the CareScout businesses. And we'll continue to execute on our 3 key priorities. I also want to thank all of you for your continued support and interest in Genworth. And with that, Katie, I'll turn the call back over to you.

Ladies and gentlemen, this concludes Genworth Financial's fourth quarter conference call. Thank you for your participation. At this time, the call will end.