Genworth Financial Inc Q3 FY2024 Earnings Call

Good morning, ladies and gentlemen, and welcome to the Genworth Financial's Third Quarter 2024 Earnings Conference Call. My name is Lisa, and I'll be your coordinator today. At this time, all participants are in listen-only mode. We will facilitate a question-and-answer session towards the end of this conference call. As a reminder, this conference is being recorded for replay purposes. Also, we ask that you refrain from using cellphones, speakerphones, or headsets during the Q&A portion of today's call. I'll now turn the call over to Brian Johnson, Senior Vice President of Financial Planning and Analysis. Please go ahead, sir.

Thank you and good morning. Welcome to Genworth's third 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 the call up for a question-and-answer period. In addition to our speakers, Jamala Arland, President and CEO of our U.S. Life Insurance business; and Kelly Saltzgaber, Chief Investment Officer, 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 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 filing 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 attending our third quarter earnings call. During this quarter, we continued to implement our strategy aimed at long-term growth and enhancing shareholder value. Before discussing our strategic progress, I'll begin with our financial performance. Genworth reported a net income of $85 million, or $0.19 per share, and adjusted operating income of $48 million, or $0.11 per share, with strong contributions from our performance, particularly $148 million from NAC. We are pleased with NAC's robust operational strength, capital status, and consistent shareholder distributions. On a statutory accounting basis, our U.S. life insurance companies reflected an estimated pre-tax loss of $18 million due to unfavorable mortality trends, increased new claims, and lower benefits from legal settlements. Complete statutory results will be shared when we release our third quarter statutory statements later this month. Our liquidity remains solid, ending the quarter with $369 million in cash and liquid assets, including roughly $162 million in advanced cash payments. Jerome will provide a detailed segment-by-segment analysis of our financial performance shortly. Throughout the quarter, we made progress on Genworth's three strategic priorities. Our first priority focuses on creating shareholder value via Inc's increasing market presence and returns. We are content with our approximately 81% stake in Enact, which has contributed around $819 million in capital to Genworth since its IPO, including $81 million this quarter. Since its IPO, Enact has achieved a total shareholder return of 95%, significantly outperforming the S&P 500's total return of 34% during the same timeframe, highlighting the substantial value Enact has generated for Genworth shareholders. Consistent cash flows from Enact have supported our shareholder return initiatives; year-to-date through October, we have repurchased about $144 million in shares, totaling $503 million in repurchases since May 2022. We are also channeling cash flows from Enact into critical long-term growth projects, including a $35 million investment in CareScout Services for 2024, which will allow us to expand the CareScout quality Network throughout the U.S. Our second strategic priority is to sustain our self-sufficient, customer-focused legacy businesses in LTC life and annuities. Our multiyear rate action plan, or MYRAP, remains an effective strategy to align our legacy LTC insurance portfolio more closely to breakeven. In the third quarter, we secured $124 million in gross premium approvals with an average premium increase of 53%, bringing our total estimated progress to around $30 billion on a net present value basis since 2012. The advancement of MYRAP in the third quarter included progress on older products and in traditionally challenging states for rate actions, demonstrating the increasing recognition of their vital role in supporting LTC insurers to meet policyholder needs. Our success with MYRAP, as well as our LTC legal settlements and ongoing management of our LTC business, have significantly diminished and will continue to mitigate the risk associated with our legacy LTC block. This management approach allows our U.S. life insurance companies to function as a closed system, utilizing existing reserves and capital to address future claims and obligations. Our third strategic priority is to spur future growth through CareScout, focusing on innovative, consumer-oriented agent care services and funding solutions. CareScout's quality network has expanded rapidly across the nation, reaching coverage in 49 states as of October 31st. The network now comprises 422 high-quality, person-centered home care providers, all undergoing a thorough credentialing process across more than 20 criteria. Currently, over 90% of providers offer hourly rates below general market costs, with many providing discounts of up to 20% off their standard rates. We aim to achieve nearly 85% geographic coverage of the U.S. population aged 65 and older by year-end. As we continue to grow the business, we plan to broaden our customer base and service offerings. While the CareScout quality network currently consists solely of home care providers, we intend to incorporate assisted living communities in major metropolitan areas next year and expand to other care types over time. In 2025, we will extend CareScout services to policyholders of other LTC insurers and launch a direct-to-consumer offering to assist families without long-term care insurance in finding quality care at preferred prices. For our policyholders, we aim to achieve savings of at least $1 billion to $1.5 billion on LTC claims in net present value over time, further reducing the risks associated with our legacy LTC block. Beyond agent care services, we are creating new funding solutions for millions of older Americans who are unprepared for the costs associated with long-term care. Our upcoming individual product is designed with conservative assumptions and capped coverage limits to minimize the need for LTC premium hikes in the future. It will provide access to our CareScout quality network, assisting policyholders in maximizing their claims. We are collaborating with the Interstate Insurance Product Regulation Commission to secure multi-state approval prior to launch and have completed our initial product filing. There is a notable demand for new and enhanced LTC funding products in the market, and we are enthusiastic about re-entering the market in 2025, aiming to obtain the necessary approvals in at least 25 to 35 states. Our ability to initiate this new growth strategy through CareScout is due to the financial flexibility we've cultivated over the past decade, reducing debt from $4.2 billion in early 2013 to $821 million today. These major accomplishments, coupled with our unmatched industry experience, position us well to capture the rising market demand for agent care services while delivering long-term value for our shareholders. I look forward to providing further updates on our progress in future quarters. Before I hand the call to Jerome, I want to highlight the increasing national dialogue about addressing long-term care challenges in our country. Our 2023 cost of care survey shows that the median annual cost for a home health aide exceeds $75,000, while a semi-private room in a skilled nursing facility costs over $100,000 annually. These figures are likely to rise significantly as the baby boomer generation ages and the shortage of skilled workers continues to create challenges. I firmly believe in the necessity of public-private partnerships to tackle rising LTC expenses and the impact these costs have on our workforce, as many Americans leave their jobs to care for loved ones, often to offset high care costs. In recent years, several states have explored various funding solutions for long-term care needs. At the federal level, legislation advocated by Representative Tom is seeking to establish a federal LTC program funded by payroll taxes to support Americans in managing long-term care expenses. Recently, both U.S. presidential candidates have included long-term care-related policy proposals in their agendas. While each proposal presents unique benefits and challenges, their emergence signals an encouraging recognition of the long-term care crisis. We remain dedicated to collaborating with states, Congress, and the forthcoming administration to promote responsible and effective solutions. In conclusion, I am proud of our continued progress in our strategic priorities and the solid performance we see from Enact. Now, I'll turn the call over to Jerome for a more detailed discussion of our financial results.

Thank you, Tom, and good morning, everyone. I'm pleased with Enact's continued strong operating performance, the progress on our MYRAP, our debt optimization, and the capital returns we delivered in the quarter. I'll first discuss Genworth's financial results and drivers in more detail. Then I'll provide a preview of our U.S. Life fourth quarter assumption review process, followed by an update on our investment portfolio and holding company liquidity before we open the call for Q&A. As shown on Slide 6, third quarter adjusted operating income was $48 million, driven primarily by Enact. Our long-term care insurance segment reported an adjusted operating loss of $46 million. This was driven by a liability remeasurement loss from actual to expected experience, partially offset by favorable cash flow assumption updates related to IFA approval amounts. As a reminder, actual to expected experience drives GAAP results in LTC and fluctuates quarterly, including from seasonal mortality trends. For the full year, we continue to expect the liability remeasurement loss from actual to expected experience. Going forward, we expect continued GAAP earnings volatility in LTC as short-term results deviate from long-term assumptions. The strong results from Enact were also partially offset by adjusted operating losses of $27 million in life and annuities and $27 million in corporate and other. Within life and annuities, life insurance posted an adjusted operating loss of $40 million, driven by unfavorable mortality. This was partially offset by adjusted operating income of $6 million from fixed annuities and $7 million from variable annuities. Corporate and other reported a $27 million loss driven by interest expense on holding company debt and growth investments in CareScout. Sequentially, Corporate and other was primarily impacted by the timing of tax-related items. Now, taking a closer look at Enact's performance on Slide 7. Enact delivered another strong quarter with $148 million in adjusted operating income, a 10% year-over-year increase, reflecting reserve releases, driven by continued favorable cure performance alongside strong net investment income. Primary insurance in force grew 2% year-over-year to $268 billion, supported by new insurance written and continued elevated persistency. As shown on Slide 8, Enact's favorable $65 million pre-tax reserve release drove a loss ratio of 5%. Enact's PMIERs sufficiency ratio remained strong at 173% and is approximately $2.2 billion above requirements. Genworth's share of Enact's book value, including AOCI, has increased to $4.1 billion at the end of the third quarter of 2024 and up from $3.8 billion at year-end 2023, while at the same time, Enact has delivered significant capital returns to Genworth. The combination of Enact's quarterly dividend and its share repurchase program generated a total of $81 million in proceeds to Genworth in the third quarter. We now expect total capital returns from Enact to be in the upper end of our $245 million to $285 million guidance range for the full year, further supporting our capital allocation priorities, which I will detail shortly. On Slide 9, we highlight the significant progress made on our MYRAP. As Tom mentioned, this includes successful rate actions on our oldest products and in states historically slow to approve increases. As we work to stabilize the legacy LTC block and protect our claims-paying ability, the premium rate increases and associated benefit reductions from MYRAP, as well as legal settlements, have significantly reduced tail risk. As of the end of the third quarter, we have achieved approximately $30 billion in in-force rate actions on a net present value basis with a cumulative policyholder response rate of nearly 57% choosing to reduce benefits. Slide 10 shows that we secured $124 million in IFA approvals on a gross incremental basis in the third quarter, bringing the year-to-date total to $303 million. We also submitted $172 million in in-force premium filings in the quarter, bringing the year-to-date total to $276 million. Based on strong approvals in prior years, we expect that total in-force premium filings submitted this year will be lower compared to prior years. We are pleased with the continued success of MYRAP, which remains our most effective tool for ensuring the long-term self-sustainability of our legacy life insurance companies. As we've said before, we believe statutory results better represent the underlying economics of the LTC business as they reflect the positive impacts of our in-force rate actions and legal settlements. As shown on Slide 11, in-force rate actions and legal settlements had a $1.3 billion pre-tax benefit to LTC statutory income year-to-date, which is $199 million higher than the same period last year. The increase is primarily driven by the net favorable impacts from the third and final legal settlement, which began in the second quarter of 2023. The favorable impact is expected to continue to trend downward into the fourth quarter as the final settlement activities come to a conclusion. Slide 12 shows our pre-tax statutory results for the U.S. life insurance companies. On a year-to-date basis, we generated pre-tax income of $411 million. In the third quarter, we had a loss of $18 million, down from income in the prior quarter due to a smaller benefit from LTC legal settlements, higher LTC claims, and unfavorable mortality in the life and annuity products. Statutory earnings drove a consolidated risk-based capital ratio for Genworth Life Insurance Company, or GLIC, of 317% at the end of September compared to 319% at the end of June and 303% at the end of 2023, reflecting our strong statutory earnings year-to-date. The quarter-over-quarter change was driven by a slight increase in required capital as we continue to grow our limited partnership portfolio. GLIC's consolidated balance sheet remains sound with capital and surplus of $3.7 billion as of the end of September. Our final statutory results will be available on our investor website with our third quarter filings later this month. As we look ahead, I'd like to discuss our approach to this year's annual assumption review, which will be completed in the fourth quarter. While our review is still ongoing, we have been monitoring key trends and can provide some preliminary perspectives. In LTC, our review is focused on short-term trends and key assumptions such as benefit utilization, incidents, mortality, and in-force rate actions. For our life and annuity products, we are reviewing mortality, lapse rates, and the potential impacts of the recent decline in interest rates. As a reminder, our assumption updates for our LTC, life, and annuity products in the aggregate in fourth quarter 2023 resulted in a negative impact to pre-tax GAAP earnings of approximately $300 million. While our review is not yet complete, our preliminary view is the impacts from the assumption updates in the aggregate would be in a similar range for GAAP as the prior year. In parallel with the assumption review, we are conducting statutory cash flow testing for our life insurance companies. While this process is not yet complete, our initial assessment indicates that GLIC margins should remain positive. Additionally, certain of our universal life secondary guarantee products require additional statutory reserve testing using the regulatory prescribed reinvestment rate for the period from July 2023 to June 2024. Given that interest rates were higher during this period compared to the prior year, we expect a favorable impact from the reinvestment rate. From a statutory income perspective, we believe the reinvestment rate benefit will help offset any potential negative impacts from the assumption updates. The prior year impact was materially favorable given the significant increase in the prescribed reinvestment rate. We will discuss the results of our assumption reviews and statutory cash flow testing on our fourth quarter earnings call. As we've said before, we manage the U.S. life insurance companies on a stand-alone basis. They operate as a closed system using existing reserves and capital to meet future claims and obligations. We will not put capital into the legacy life insurance companies, and given the long-tail nature of our LTC insurance policies with peak claim years still at least a decade away, we do not expect capital returns from these companies. Turning to Slide 13. Our investment portfolio remains strong. The majority of our assets are in investment-grade fixed maturities, held to support our long-duration liabilities. New investments during the quarter achieved yields of 5.8%, and our alternative assets program continues to generate strong returns, targeting approximately 12%. We maintain confidence in our commercial real estate exposure, which accounts for approximately 15% of the portfolio and is concentrated in high-quality investment-grade assets with less than 20% office exposure. Next, turning to the holding company on Slide 14. We received $81 million in capital from Enact and ended the quarter with $369 million of cash and liquid assets. Included in our cash and liquid assets, we hold approximately $162 million of advanced cash payments from our subsidiaries for future obligations. We do not consider this cash when evaluating holding company liquidity for purposes of capital allocation or calculating the buffer to our debt service target. Tom reviewed our capital allocation strategy, and I'll reiterate that our top priorities shown on Slide 15 are to invest in long-term growth through CareScout, return cash to shareholders through our share repurchase program when our share price is below intrinsic value, and opportunistically pay down debt when attractive to us. We continue to return capital to shareholders through share repurchases in the third quarter, repurchasing $36 million of shares at an average price of $6.38 per share, and another $10 million through the end of October. We have $197 million remaining under our current authorization as of the end of October and now expect to allocate between $160 million to $180 million to share repurchases in 2024. Our final amount for the full year may vary depending on our share price and market conditions. And as a reminder, the amount will be lower than we repurchased in 2023 given that we have fully utilized our holding company tax assets. Since the initial authorization in May of 2022, we have reduced outstanding shares by 16%, from approximately 511 million shares to 427 million shares outstanding as of the end of October. We're very pleased with the value created for shareholders through our share repurchase program. We also retired $17 million of principal debt in the third quarter for $15 million in cash. Year-to-date, we have retired $35 million of principal debt, bringing our total holding company debt to $821 million. Our debt-to-capital ratio is well below 25%, attributing no equity value to LTC, life, and annuities. Additionally, we executed a $100 million interest rate swap on our subordinated floating-rate debt, locking in an approximate 5.5% yield to manage interest rate risk more effectively. We are pleased with our financial flexibility given our liquidity level, sustainable cash flows from Enact, and manageable debt level. In closing, we are delivering on our strategic priorities while proactively managing our liabilities and risk. The multiyear rate action plan and the additional benefit from the three LTC legal settlements are further stabilizing the legacy LTC block. Enact is a key driver of shareholder value as evidenced by its strong earnings, increasing book value, and increased capital returns. Looking ahead, we will continue to focus on delivering sustainable long-term growth through Enact and CareScout while returning meaningful value to shareholders through share repurchases and opportunistically repurchasing holding company debt. Now, let's open up the line for questions.

Ladies and gentlemen, we will now begin the Q&A portion of the call. Our first question comes from Brett Osetec with KBW.

Hey good morning. My first one is on the AXA Santander lawsuit. I think the case is still set for March of next year, but if there is a positive ruling for you guys there, could you just comment on the potential use of proceeds?

Thank you very much for the question, Brett. Yes, the trial date is still scheduled for March 2025. There is a possibility of a settlement before then, but that's our current timeline. If we win the case, as we have consistently stated, we are optimistic about our position in the lawsuit. Any proceeds would likely be used to continue what we’ve been doing, which is returning capital to shareholders through the share repurchase program. We plan to increase that as appropriate. We will also continue to take advantage of good opportunities to buy back debt when the pricing is favorable. Additionally, we want to invest in the CareScout services business, which is performing well and gaining significant momentum, along with launching the new CareScout Insurance business next year. Jerome, do you want to add anything to that?

I think you covered it well, Tom.

Okay, great. Thanks. And then for my follow-up, I was just hoping you guys could give a little more color on how the CareScout revenue model will work beyond potential savings on LTC claims?

Yes. So basically, maybe just to simplify, Brett, that's a good question. But as I noted in my remarks, the annual cost for Home Care is about $75,000 a year, so, let's say, roughly a little over $6,000 a month. Our results are performing very well on the discounts; I think 90% are in the 20% range. So, if you say the savings through the discount on a good policy, so $1,000 a month, $250 of that goes to CareScout services because they've built and maintained the network, and then $750 of the $1,000 a month savings is retained by terms of lower claim costs. So, that's the basic model.

Okay, great.

Hello. Good morning. Thank you for taking the time. I have two questions regarding CareScout. The first is a clarification: how do you define coverage percentage in your presentation material? Is it simply having at least one care provider in the ZIP code where individuals aged 65 and older reside? Additionally, how do insurers or policyholders learn about the availability of services at potentially lower prices, particularly for those who are not general policyholders?

Those are great questions, Josh. So the first one, in terms of CareScout, we look at the coverage by ZIP code. Depending on the area, you would expect in those ZIP codes in bigger cities to have several providers in the network in that area. As you get to the more rural areas, I mentioned we were in 49 states. The one state we're not fully in yet is Wyoming. Obviously, it's a more rural state. So, there are ZIP codes where they're less populated, and therefore, there are fewer 65-plus-year-olds and fewer Genworth policyholders. In those ZIP codes, it would be more typical to have maybe only one or two providers. So, that's basically how it works. The second part of the question was about touchpoints with insurers and policyholders. For our policyholders, we obviously communicate with them regularly, and we have been since we started the journey with CareScout services. We have been informing them about the network. When someone files a claim, we work to assess the claim to determine if coverage applies, and during that process, which takes an average of 20 to 30 days, we'll discuss who the providers in the network are and the discounts they provide. The last several months were with the policyholders; we've been doing more than 100 per month of matches between the policyholder going on claim and the network. For the direct-to-consumer aspect, from a broader perspective, we'll be marketing that this network is available in these states where most of the providers are below the median cost of care in the state or the ZIP code. We credential for quality on 20 different dimensions. Our value proposition is that we're taking all of the time and effort to find a provider away from the person needing care or typically their family. And at the same time, whatever the rate would be per hour for Home Care, we're generally getting significant discounts of 20%. For consumers without insurance, the savings are very significant since they're paying. So, we're very optimistic going forward. We've got to first complete the network; we aim to achieve 85% coverage by the end of the year. Practically speaking, that represents pretty full coverage. There will always be areas, whether it's Wyoming, Montana, Idaho, or other states where it takes time to fill in the gaps. We believe that at 85%, that will be effectively nationwide coverage, and once we achieve that, we'll accelerate our marketing plans to let consumers generally know that the network is available.

Appreciate that. Thanks.

Good morning. I'd also like to focus on CareScout for a moment from understanding better how the entity impacts the parent company rather than what's going on in the ring-fenced insurance entities. I assume all the expenses of CareScout are incurred at the parent company level, and I'm trying to understand what the offsetting revenue might be, and kind of what the P&L looks like, if you will, on a standalone basis?

So, Jerome, do you want to speak on that?

So, Doug, thanks for your question. I would start out by saying, as Tom highlighted in his prepared remarks, that we are investing $35 million in the CareScout services business. That is all contained in the corporate and other segment at this point in time. So that you will see coming through, and that's why we've highlighted the $35 million for you, for your understanding of the investment we're making. We are going after a very large market, as Tom highlighted. So we're optimistic about what we're doing there. Expenses are in corporate and other. On the revenue side, CareScout services, when they’re saving our GLIC policyholders money because the providers are signing up for 90% and are in the 20% discount range, CareScout services would get a share of that, and that would come in corporate and other as well. So it's mostly contained in the corporate and other segment.

And are there material revenues in corporate other offsetting a significant portion of that expense run rate?

So, there are revenues coming through on the assessment side, which is a service that is provided to GLIC. However, when you have those assessments and they come through from GLIC, we eliminate that revenue. There are some matches that are being made where there's a fee stream coming through from the GLIC policyholders. But at this point in time, given the newness of the business, those revenue streams are pretty small.

And the $35 million run rate would be net of whatever that offsetting revenue might be.

And then if CareScout did initiate an insurance product, would that be inside or outside of the ring-fenced insurance entities?

Another good question. That will be outside. So basically, think of you have the parent holding company, and it owns Enact and the legacy life companies. And then separately, a sister entity would be CareScout Inc., which you can consider the holding company of CareScout. Underneath that holding company will be CareScout services. That's the service business, and it's a fee business, not very capital intensive. As you mentioned, Doug, the revenues will come from our share of the discounts, whether it's a Genworth policyholder or other insurers’ policyholders. We're also talking to several other closed block LTC players about allowing their policyholders to use the network and benefit from the discounts. When we go to consumers, it'll be the same type of model where whatever that monthly savings is for home care, as I said, around $1,000 a month, we'll negotiate a fee for CareScout services. A significant part of that savings will accrue to the benefit of the policyholder if they have insurance, or if they don't, then they're just paying the cost, and they’ll receive the majority part of the discount. The goal is to match as many policyholders and consumers with providers as we can so that 25% goes to CareScout Services. To give you a sense, if we're saving $250 a month out of the $1,000, our claims typically are a couple of years plus or minus, so usually about $3,000 a year from the CareScout services share of that. You can calculate how many matches you need, whether they're our policyholders, other insurance policyholders, or consumers, to cover that $35 million investment. So it's a scale business. We're still completing the network. It usually takes about 90 days after you have a state or ZIP code covered before you begin to see batches. We're very optimistic that this will ultimately be a very good business for us, given that we've got 70 million baby boomers, and the oldest will be turning 78 this year, with nearly 10,000 turning 80 each day. The peak claim years are when they reach their early 80s.

Doug, can I just add one thing? The one thing implied in both my comments and Tom's comments about CareScout Services is that we are saving claims; there's claim savings coming through for the GLIC policyholders. We expect that to be meaningful over time, at least $1 billion to $1.5 billion. So, while we're building scale, we're also saving the GLIC policyholders' money, which will have a significant impact.

Okay. Thank you.

Hey guys. Thank you again for taking another one for me. In your prepared remarks on the fourth quarter LTC reserve review, you mentioned that you expect GLIC reserve margin to remain positive. Can you please remind us either where that margin is currently or where it was the last time you provided an update?

Yes. Thank you for your question, Joshua. When we did our cash flow testing, our statutory review of margin at year-end 2023 indicated we were in the $0.5 billion to $1 billion range for that margin, and we do expect to maintain our statutory margin for GLIC in that same range this year.

Understood. Thank you.

And ladies and gentlemen, it appears that there are no further questions at this time. I will now turn the call back over to Mr. McInerney for closing comments.

Thank you very much, Lisa. I want to again thank Brett, Josh, and Doug for their questions. I think many of our investors have had similar questions, so it was a good opportunity for us to elaborate a little bit more on that. We're very pleased with where we are, and Enact continues to perform extremely well, showing solid earnings and a good return on capital through their regular dividends to us as well as through share buybacks. We're pleased with that. The three priorities we've discussed are making good progress, which is in addition to expanding the value of Enact for our shareholders. We're also making good progress with our legacy LTC business in terms of the MYRAP, with very good results. Finally, as we talked about and had some questions on, we're scaling up the CareScout business. We're optimistic about significant growth in that business in 2025 and beyond. With that, Lisa, I'll turn the call back to you to end the call.

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