Share Price Catalysts, page-3

I thought I'd share one of my favourite tables from the last annual report (page 79).


At the end of 2020, despite falling unemployment and accelerating house prices, the brains trust at Genworth forecast claim payments to increase from $121m in 2020 to $149m in 2021. Turns out they paid on $40m in claims ($24 H1, $16m H2), about 27% of their forecast. Not even close!

For 2022, they forecast $96m in claim payments, a dramatic 139% increase on the $40m paid last year, despite the fact that unemployment was still falling at December 2021 and house prices were still rising. I look forward to seeing how they are tracking at June this year.

In many respects (such as dividend yield, NTA discount, profitability, buybacks), Genworth is a compelling investment opportunity. And that is without the potential upside from conservative reserving. It seems there is a bit of hot air in that $480m reserve - some was released at Q1, but there is more to come.