I'm sure some morons will dump shares at the opening because the company did not blow through estimates. By the way, MetLife beat estimates by a fair amount, a sign that business for most life companies is getting back to normal.
Here's what UBS said in June and its reflected in today's earnings:
UBS Investment Research Genworth Financial Takeaways from Meeting with CEO ␣ Achieving a 10%+ operating ROE by 2012 (from 4% in 1Q10) We recently met with CEO Mike Fraizer, who reiterated his confidence in a 10%+ operating ROE by 2012, reflecting 10% ROE in U.S. Mortgage Insurance (MI), 10% in Retirement & Protection and ~15% in International operations. ␣ Key ROE drivers: higher-return new business + loss mitigation programs (a) Genworth has re-priced Lifestyle Protection Insurance (LPI) products by 30- 100%, U.S. MI by ~35%, and Australia MI by ~40%; new pricing bakes in high- teens ROE for LPI and Australia MI, and 20%+ for U.S. MI. (b) Loss mitigation efforts to result in ~$850M savings U.S. MI in ’10, and lower claims in LPI. (c) Expect incremental liquidity deployment to add ~$8M/qtr to earnings run rate. ␣ Improved U.S. MI revenue and loss ratio outlooks Expect U.S. MI rev growth due to market share shift from FHA to GSEs/private MI, higher pricing, and lower ceded premium to lender captive reinsurance. Combined with loss mitigation, firmer underwriting standards, and cyclical trends, we estimate for full-year 2010 loss ratio at 143%, and falling to <100% by 2H11. ␣ Valuation—price target unchanged; and minimal regulatory impacts (a) Our $22 price target reflects (20)% discount to target life group P/B on 1Q11E BVPS (ex-aoci and adjusted for est. future inv. losses) due to lower near-term ROE prospects. (b) Most of the financial reform bill and new healthcare legislation will likely have minimal impact on Genworth and other life cos. And, stiffer capital requirements could benefit MI and LPI as banks seek to reduce risk held on balance sheet.