Genworth Financial Q1 2025 10-Q: Derivatives and Life Insurance Details

Ticker: GNW · Form: 10-Q · Filed: 2025-05-02T00:00:00.000Z

Sentiment: neutral

Topics: derivatives, insurance, financial-reporting

TL;DR

Genworth's Q1 10-Q shows zero value in settled futures, details embedded derivatives in life products, and notes tax impacts on fair value changes.

AI Summary

Genworth Financial Inc. filed its 10-Q for the period ending March 31, 2025. The filing details financial futures with zero period-end valuations due to daily margin settlements. It also addresses embedded derivatives in indexed universal life and fixed indexed annuity liabilities, noting that these do not include amounts as of March 31, 2025, and December 31, 2024. The company reported net deferred tax impacts on fair value changes for its universal and term universal life products.

Why It Matters

This filing provides insight into Genworth's management of financial derivatives and liabilities related to its life insurance products, which can impact its financial stability and future profitability.

Risk Assessment

Risk Level: medium — The filing discusses complex financial instruments like embedded derivatives and their tax implications, which can introduce financial risk.

Key Numbers

Key Players & Entities

FAQ

What is the reason for the zero valuation of financial futures at the period end?

The period-end valuations of financial futures were zero as a result of settling the margins on these contracts on a daily basis.

What types of liabilities are associated with the embedded derivatives mentioned?

The embedded derivatives are associated with Genworth's indexed universal life liabilities and fixed indexed annuity liabilities.

Do the reported embedded derivative amounts include figures as of March 31, 2025, and December 31, 2024?

No, the reported amounts do not include amounts related to embedded derivatives as of March 31, 2025, and December 31, 2024.

How are derivative assets and liabilities presented on the balance sheet when held with the same counterparty under a master netting arrangement?

Derivative assets and/or liabilities are presented gross within the balance sheet but are held with the same counterparty where we have a master netting arrangement, resulting in the presentation of net asset and net liability positions for each counterparty.

What was the net impact of deferred taxes on fair value changes for universal and term universal life products in the three months ended March 31, 2025?

During the three months ended March 31, 2025, current period increases (decreases) in fair value were net of deferred taxes of $(21) million.

From the Filing

0001193125-25-110536.txt : 20250502 0001193125-25-110536.hdr.sgml : 20250502 20250502063111 ACCESSION NUMBER: 0001193125-25-110536 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 130 CONFORMED PERIOD OF REPORT: 20250331 FILED AS OF DATE: 20250502 DATE AS OF CHANGE: 20250502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENWORTH FINANCIAL INC CENTRAL INDEX KEY: 0001276520 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] ORGANIZATION NAME: 02 Finance EIN: 800873306 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-32195 FILM NUMBER: 25905409 BUSINESS ADDRESS: STREET 1: 11011 WEST BROAD STREET CITY: GLEN ALLEN STATE: VA ZIP: 23060 BUSINESS PHONE: 804-281-6000 MAIL ADDRESS: STREET 1: 11011 WEST BROAD STREET CITY: GLEN ALLEN STATE: VA ZIP: 23060 10-Q 1 d948833d10q.htm FORM 10-Q Form 10-Q Table of Contents false Q1 0001276520 --12-31 414456966 The period end valuations of financial futures were zero as a result of settling the margins on these contracts on a daily basis. Represents the embedded derivatives associated with our indexed universal life liabilities. Represents the embedded derivatives associated with our fixed indexed annuity liabilities. Does not include amounts related to embedded derivatives as of March 31, 2025 and December 31, 2024. Amounts represent derivative assets and/or liabilities that are presented gross within the balance sheet but are held with the same counterparty where we have a master netting arrangement. This adjustment results in presenting the net asset and net liability position for each counterparty. Primarily includes balances related to our universal and term universal life insurance products. During the three months ended March 31, 2025 and 2024, current period increases (decreases) in fair value were net of deferred taxes of $(21) million and $33 million, respectively, and amounts reclassified to net (income) were net of deferred taxes of $18 million and $20 million, respectively. Limited partnerships that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The transfers into and out of Level 3 for fixed maturity securities were related to changes in the primary pricing source and changes in the observability of external information used in determining the fair value, such as external ratings or credit spreads, as well as changes in the industry sectors assigned to specific securities. Represents the net reinsured portion of our variable annuity MRBs. Unobservable inputs weighted by the relative fair value of the associated instrument for fixed maturity securities, notional for derivative assets and the policyholder account balances associated with the instrument for the net reinsured portion of our variable annuity MRBs. See note 5 for additional information. Unobservable inputs weighted by the policyholder account balances associated with the instrument and notional for derivative liabilities. Refer to note 11 for additional details related to MRBs. Significant expense category and amounts, which align with segment-level information, as applicable, that is regularly provided to the CODM. Other segment items not considered a significant expense category. This class invests in real estate in North America, Europe and Asia via direct property ownership, joint ventures, mortgages and investments in debt and equity instruments. This class employs various investment strategies such as leveraged buyout, growth equity, venture capital and mezzanine financing, generally investing in debt or equity positions directly in companies or assets of various sizes across diverse industries globally, primarily concentrated in North America. This class invests in the debt or equity of cash flow generating assets diversified across a variety of industries, including transportation, energy infrastructure, renewable power, social infrastruc

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