August 11, 2026

Genworth leans on mortgage unit, CareScout to offset Q2 LTC liabilities

Genworth Financial reported steady progress Thursday as it continues to rely on a strong mortgage insurance business and its emerging CareScout aging care platform to offset long-term care insurance liabilities.

The insurer reported second-quarter net income of $47 million as Interim President and Chief Executive Officer Jerome T. Upton leads the company during CEO Tom McInerney’s medical leave.

Upton, who also continues to serve as chief financial officer, acknowledged McInerney’s absence in a call with Wall Street analysts, saying the board remains confident in the company’s strategy and leadership team.

“We continue to wish Tom well,” Upton said, adding that the company will provide updates on McInerney’s status “as and when appropriate.”

Genworth continues to invest in CareScout, its long-term strategy to build an aging-care platform combining care navigation, provider networks and long-term care insurance.

The CareScout network now includes more than 1,100 home care locations and is expanding into senior living communities, Upton said. The company said it expects to have at least 2,000 senior living communities in its network by year-end.

CareScout also doubled its number of local care advisors during the first half of the year and now has advisors in 26 states.

“We’ve also made strong progress expanding CareScout match footprint beyond our existing policyholder base, bolstered by senior living matches,” Upton explained. “As the network continues to scale and brand awareness grows, we expect to drive increased traction across the platform.”

The company facilitated about 1,450 matches between consumers and care providers during the second quarter, bringing first-half matches to roughly 2,950, more than double the number completed during the first half of 2025.

Despite the growth, executives acknowledged CareScout’s match volumes are running below the pace needed to reach the company’s full-year goal of approximately 7,500 matches. The company nevertheless maintained its expectation of about $25 million in CareScout Services revenue this year.

LTC block remains under pressure

Genworth’s closed block of legacy long-term care insurance reported an adjusted operating loss of $110 million, primarily because of a $127 million pretax liability remeasurement loss tied to adverse actual-versus-expected experience.

Upton said actual-versus-expected losses during the first half of the year have exceeded the level implied by the company’s previous expectation of about $300 million for all of 2026.

He emphasized, however, that accounting fluctuations do not affect cash flow or the company’s approach to managing the business.

The company continued to pursue premium increases and policy modifications designed to improve the long-term sustainability of the block.

“We continue to work with regulators to finalize pending rate increase requests, but the timing of approvals can be difficult to predict,” Upton said. “We expect full-year 2026 premium approvals and benefit reductions to be broadly in line with 2025 levels, contributing approximately $1 billion of value on a net present value basis.”

During the quarter, regulators approved $46 million in additional annualized premium increases, compared with $41 million a year earlier. Another $27 million of approvals were received in July.

Since 2012, the company said it has achieved approximately $34.8 billion in cumulative benefit reductions and premium increases on a net present value basis.

Enact continued to post strong operating results during the quarter. New insurance written reached $15 billion, while primary insurance in force increased 2% from a year earlier to $274 billion.

Genworth’s stake in Enact was valued at $4.4 billion at quarter-end.

Based on Enact’s updated guidance, Genworth now expects to receive between $445 million and $485 million in capital returns from the mortgage insurer during 2026.

AXA appeal pending

Genworth also updated investors on its long-running litigation with AXA. An appeal hearing has concluded and a decision from the court is expected within three to six months. Genworth executives first began discussing the windfall one year ago.

If Genworth ultimately prevails through all appeals, executives said the company expects to recover approximately $750 million, subject to exchange rates, and does not expect to owe taxes on the proceeds.

The lawsuit involves liabilities associated with the misselling of Payment Protection Insurance policies, Genworth has said in a news release. At issue were losses incurred from misselling complaints for PPI underwritten by two companies that AXA acquired from Genworth in 2015. The policies were sold by a company acquired by Santander in 2009.

Upton said any recovery would not alter Genworth’s capital allocation philosophy. If received, proceeds would be directed toward CareScout investments, shareholder returns and debt reduction.

“We’re pleased with the progress we made against our priorities and with our financial performance in the second quarter,” Upton said. “Enact continues to deliver strong performance and capital returns. CareScout is expanding its network, products and distribution capabilities as we build a competitive aging care platform.”

Quarterly Highlights

Enact remains the primary source of cash flow to Genworth, returning $103 million during the quarter.
The Care Assurance Worksite long-term care product is ready for a third quarter launch. CAW gained approval in 34 states as of June 30.
Legacy insurance companies’ RBC ratio of 286%.
Genworth holding company cash and liquid assets of $215M at quarter-end

By The Numbers

Total Revenue: $1.9 billion ($1.8 billion in Q2 2025)
Net Income: $47 million ($51 million in Q2 2025)
Earnings Per Share: Adjusted income per diluted share of 12 cents (12 cents in Q2 2025)
Share Repurchases: $62 million in Q2 2026
Dividend Declared: Enact Holdings paid a quarterly dividend of $0.24 per share
Stock Price Movement: Shares were flat Tuesday morning at $9.80