Share Price Catalysts, page-33

Hey Ponting,

In addition to your point about how GMA stands to benefit from higher yields, it is also well positioned to benefit from inflation.

A bout of price inflation will feed into wage inflation and ultimately house prices. Sure, we are facing short-term house price falls, but given that Genworth uses a 12-year earning pattern, a longer-term view is more appropriate. Inflation will be brought back under control, but we won’t see deflation – prices and wages will remain at elevated levels., reducing the risk of claims actually materialising from the $2bn in liabilities held on the balance sheet from policies written over the past 12 years.