Q4 2023 Genworth Financial Inc Earnings Call

Participants

Brian Johnson; SVP, Financial Planning & Analysis; Genworth Financial Inc

Thomas McInerney; President & CEO; Genworth Holdings Inc

Jerome Upton; EVP & CFO; Genworth Holdings Inc

Presentation

Operator

Good morning, ladies and gentlemen. Welcome to the Genworth Financial's fourth-quarter 2023 earnings conference call. My name is Jenny, and I will be your coordinator today. (Operator instructions) As a reminder, the conference is being recorded for replay. (Operator Instructions)
I would now like to turn the presentation over toBrian Johnson, Senior Vice President of Financial Planning and Analysis. Please go ahead, sir.

Brian Johnson

Thank you and good morning, and welcome to Genworth Fourth Quarter 2023 earnings call. The slide presentation that accompanies this call is available on the Investor Relations section of the Genworth website, investor dot genworth.com. Our earnings release and financial supplement can be found there and we encourage you to review these materials. Speaking today will be Tom McInerney, President and Chief Executive Officer; and Jerome Upton, Chief Financial Officer. Following our prepared remarks, we will open the call up for a question and answer period. In addition to our speakers, Jamelah Arlon, President and CEO. of our US life insurance business, and Kelly Solidscape, our Chief Investment Officer will be available to take your questions.
During the call this morning, we may make various forward-looking statements. Our actual results may differ materially from such statements. We advise you to read the cautionary note regarding forward-looking statements in our earnings release and related presentation, as well as the risk factors of our most recent annual report on Form 10 K as filed with the SEC. This morning's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors in our investor materials. Non-gaap measures have been reconciled to GAAP where required in accordance with SEC rules. Also, references to statutory results are estimates due to the timing of the filing of the statutory statements.
And now I'll turn the call over to our President and CEO, Tom McInerney.

Thomas McInerney

Thank you very much, Brian, and good morning, everyone, and thank you for joining our fourth quarter earnings call. Before I get to the quarter, I want to welcome Jim Arlon to our first earnings call in her official capacity as the new President and CEO of our US life insurance business. Tomorrow, I has been with Genworth for 18 years. So he's one of the top actuaries in the LTC insurance industry. And she has been an integral leader in both the development and execution of our multiyear rate action plan. I'm very excited to work with her in her new and broader role. I also want to thank Brian Hanna guests for his tremendous contributions and accomplishments at Genworth. As you know, Brian recently retired in 2023, Genworth made outstanding progress against our three strategic priorities, which enabled us to return significant value to our shareholders.
Before I discuss these accomplishments I'll quickly review our financial performance for the full year. Net income was $76 million or $6.16 per diluted share, and adjusted operating income was $41 million or $0.09 per diluted share. These results were led by an ACT which had an outstanding year, delivering adjusted operating income of $552 million for GenMark, and that continues to execute, execute on its strategy of maintaining a strong balance sheet and high-quality books of insurance in force. And that also expanded its platform in 2023 with the launch of an actuary to pursue opportunities in the mortgage insurance market.
In the fourth quarter, channels reported a net loss of $212 million or $0.4 per diluted share and an adjusted operating loss of $200,000 or $0.51 per diluted share. These results were driven by losses in both life and annuities and in LTC, primarily due to the impact of our annual assumption reviews as well as quarterly actual to expected experience on their new LDTI. GAAP accounting standards and to which Jerome will discuss in more details.
On a statutory accounting basis, pretax income for the US life insurance companies was $148 million for the fourth quarter and $433 million for the full year, driven by a net benefit in variable annuities from better equity markets and higher interest rates and a net favorable impact of assumption updates, 1.6 billion in earnings, pretax earnings benefits in 2023 from LTC in-force rate actions and settlements were offset by higher claims as the block. Sage complete statutory results for our US life insurance companies will be available when we file our fourth quarter statutory statements later this month and that got a very strong fourth quarter with adjusted operating income of one or $29 million to Genworth. We're pleased with and ags continued strong operating performance and capital levels since an ex IPO. Genworth has received approximately $615 million in capital from an Act, including $128 million in the fourth quarter. Cash flows from Anadarko fueled our share repurchase program and our growth in Carrasco.
Moving to our strategic progress, we continue to further strengthen the financial and operational capabilities of our legacy LTC insurance business. We're achieving this primarily through our multiyear rate action plan or my wrap the most effective tool we have to bring our legacy LTC insurance portfolio to economic breakeven on a go forward basis and ensure the sustainability of the life company's 2023 was a very successful year for our my wrap on a few different fronts. First, we achieved a total of $354 million in premium rate increase approvals in 2023, well above our forecast of $275 million in the fourth quarter from rate increases totaled $127 million from 13 states with an average percentage increase of 75%, which is one of the strongest quarterly percentage increases we've ever achieved. We also saw significant approvals on our PCS two policies as a result of the new National Association of Insurance Commissioners or NRC's process to develop a multi-state actuarial review to address state inequalities. Perhaps most importantly, in 2023, the value of our mirror progress achieved to date increased by $4.5 billion, which reduces the remaining amount currently left to be achieved to be achieved by $1.5 billion. And the past two years, we've reduced the remaining account amount left to be achieved by almost $4 billion, while Jerome will discuss our 2023 efforts in more detail. I wanted to note our significant progress and continued momentum on this important strategic priority. As we've said before, we manage the US life insurance companies on a stand-alone basis. They operate as a closed system, leveraging existing reserves and capital current premiums as well as future new premiums on the under the LTCMIRAP. plan to cover future claims and other obligations. We will we will not put capital into life insurance companies and given the long-tail nature of our long-term care insurance policies with peak claim years still well over a decade away. We also wouldn't do not expect capital returns from this segment.
Our second strategic priority is to leverage Genworth's LTC expertise, developed new innovative aging services and solutions.
On this front here, Scott achieves several key milestones in 2023 after our initial launch in Texas, the Carrasco quality network is now available in 20 states. We continue to add providers to the network that meet our quality credentialing standards and that agreed new negotiated discount rates at the end of 2023, we had 125 providers in the network. And by the end of 2024, we anticipate we will have Carrasco quality network home care coverage for approximately 6% from approximately 600 providers. That will cover two thirds of the aged 65 plus centers population in the U.S. and also approximately two thirds over $1 million LTC policies. With the discount rates negotiated, we will bend the future LTC claim curve and reduce future LTC claim costs. General policies will also be able to extend their available benefits, particularly where they have limited benefits. We continue to forecast claim savings engine with LTC claim cost overtime of between $1 billion to $1.5 billion on a net present value basis, driving further risk mitigation for the legacy LTC blocks.
In addition, we have been focused on building the foundation necessary to reenter the long-term care insurance business with new funding solutions in 2024 through our new subsidiary care Scout insurance, we are focused on product development and pricing identification and identification of highly of a highly rated reinsurance partner, regulatory engagement and operational readiness as we prepare to launch new LTC insurance products later in 2024.
Moving to our third strategic priority. We continue to allocate excess cash from enact to drive Genworth's long-term shareholder value. We returned significant capital to shareholders via share repurchases in 2023, and we remain committed to the execution of our buyback program in July of last year, the Genworth Board authorized an additional $350 million in share repurchases, significantly expanding our original share repurchase authorization, which we first announced in May of 2022. This step was reflective of the transformative progress we've made as a Company in recent years. Our strong progress on buybacks and the Board's confidence in our strategy and in our future. Since the initial authorization in May 2022, we have repurchased a total of approximately $384 million worth of shares at an average price of five 33 per share as of February 13th, and reduced outstanding shares by 13% from approximately five on our $11 million shares to four or $43 million shares outstanding. We also invested approximately $30 million in Carrasco services in 2023. In line with our guide guidance, we plan to invest an additional approximately $35 million in 2024. As we build out the Carrasco quality network, we will continue to prudently scale and diversify care Scout services in a way that we leverage our intellectual property successfully successfully drive claim savings for Genworth Life Insurance Company and eliminate and introduce new offerings, insurance offerings to the market and drive long-term growth.
Our 2023 achievements have improved Genworth's financial strength financed by our ratings upgrades from both Moody's and S&P and allowed us to enter 2024 with greater financial flexibility and continued confidence in our long-term strategy to invest in growth, primarily through Carrasco and continue returning capital to our shareholders.
And with that, I'll turn the call over to Jerome.

Jerome Upton

Thank you, Tom, and good morning, everyone. We completed our annual LTC and life insurance assumption reviews in the fourth quarter under the new U.S. GAAP accounting standard LDTI., while our US GAAP earnings were pressured by these assumption updates.
I'm very pleased with January's strategic progress in 2023, the ongoing value creation delivered by enact and our strong momentum on LTC in-force rate actions, which helped drive positive statutory income in our US life companies for the year. I'll discuss January results and drivers in more detail, including an X performance and the results of our assumption reviews, then I'll provide an update on our investment portfolio and capital position. Before we open the call for Q&A. Tom covered our consolidated financial results. So I'll start with the next performance on slide 6, and that delivered very strong fourth quarter and full year results, including high-quality growth in its insured portfolio, increasing investment income and strong profitability and tax adjusted operating income of $129 million was up 8% versus the prior year. Primary insurance in force increased 6% year over year to a record $263 billion, driven by new insurance written and continued elevated persistency. January share of annex book value, including AOCI, has increased from $3.4 billion at the end of 2022 to $3.8 billion at the end of 2023. While at the same time, an act has delivered significant dividends to Genworth. The business continues to operate from a position of strength and has had strong loss performance, which has allowed it to release excess reserves as shown on slide 7 and act had a favorable $53 million reserve release in the fourth quarter, which drove a loss ratio of 10%. The reserve release primarily reflects favorable care performance on 2022 and earlier delinquencies both in the prior quarter and prior year results included favorable net reserve releases as well totaling $55 million and $42 million respectively. And ACT has a strong estimated PMIERs sufficiency ratio of 161%, approximately $1.9 billion above PMIERs requirements, and that continues to deliver strong cash flows to Genworth. The combination of the next quarterly dividend. Special dividend and share repurchase program generated a total of $128 million in proceeds to Genworth in the fourth quarter. For the full year 2023, Genworth received $245 million from enact, which enabled us to advance generally our strategic initiatives and capital return program in 2020 for an active stated that it expects its total capital return will be similar to what it delivered in 2023.
Turning to long-term care insurance, starting on Slide 8. We continue to significantly reduce the tail risk on our legacy LTC block with progress on our multiyear rate action plan or my wrap and legal settlements as of the end of 2023 we have achieved in-force rate actions worth approximately $28 billion on a net present value basis since 2012 and has seen a cumulative policyholder response rate of 51% to reduce benefits. As Tom mentioned, the year-over-year increase in the economic value of our rate actions achieved to date is significant. As shown on slide 9, this $28 billion reflects $4.5 billion in growth from last year. $2 billion of the increase is attributable to our 2023 rate action approvals and settlement implementations, benefit reductions associated with these actions not only provide stability to our financials in the period implemented, but also continue to provide risk resiliency going forward as the blocks reach peak claim years, helping to protect against any potential deterioration in the future. As such, the value of the benefit reductions connected with our previously achieved rate actions and settlements also increased by an additional $2.5 billion in 2023 from the impact of our assumption updates and ongoing risk reduction measures. The remaining amount we currently have left to achieve is approximately $5 billion, which has decreased approximately $1.5 billion from this time last year. Our achieved value reflects progress with 84% toward our latest estimate of approximately $33 billion for the total net present value of premium increases and benefit reductions contemplated in our MIRAP.
Slides 10 and 11 show more details on the filings approved in recent quarters.
As well as the positive trend we've seen in policyholder benefit reduction elections, both of which demonstrate the progress we're making on our strategy.
In addition to the my wrap recent legal settlements have further reduced risk associated with our legacy LTC book. In connection with these settlements, many policy holders have elected to reduce their benefits in order to reduce or eliminate their premiums which allows us to maintain meaningful coverage while reducing Genworth tail risk on these policies and further protecting our ability to pay claims.
The PCS one and two settlement was materially completed as of the end of the quarter.
Third and final settlement on our large Choice two block will continue throughout most of 2024, and we'll further reduce risk through benefit reduction options.
Long-term care insurance GAAP results are covered on Slide 12. Our LTC segment reported an adjusted operating loss of $151 million in the fourth quarter compared to an adjusted operating loss of $71 million in the prior quarter and adjusted operating income of $204 million in the prior year. In the fourth quarter, LTC had a liability remeasurement pretax loss of $188 million, including a $127 million loss on actual to expected experience, principally on our CAP cohorts. The experienced during the quarter was related to higher claims and unfavorable timing impacts of the PCS one and two legal settlement. Despite the quarterly variation in experience, as I noted the settlement is now materially complete and has been very favorable to Genworth on a cumulative basis. For the full year 2023, the total liability remeasurement loss from actual to expected experience was $269 million with a quarterly average of about $65 million. Though this quarterly average represented less than 0.5% of our total liability for future policy benefits of approximately $42 billion. We expect volatility at this average level could continue, particularly for our CAP cohorts and believe this could be a main driver of our quarterly earnings pressure for LTC in 2024. This potential impact will vary based on actual experience and seasonal trends. Importantly, the quarterly US GAAP fluctuations do not impact cash flows, our long-term economics or the way we manage the LTC business. We continue to primarily manage the LTC business by seeking to maximize net present value economics under the MIRAP. We believe statutory pretax results better reflect our execution and fully reflect the performance of all books of business as the concept of cap VERSUS uncapped cohorts does not exist. As I mentioned, this is the first quarter that we are reporting long-term assumption updates for US GAAP under the new LDTI. accounting standard as a reminder, we no longer perform loss recognition testing for our LTC active life reserves. Ltc assumptions are now reflected at best estimate with any changes recorded through our income statement. Ltc assumption updates in the fourth quarter resulted in an additional $61 million pretax remeasurement loss in LTC, as shown on slide 13, compared to a $303 million remeasurement gain in the fourth quarter of 2022, again, in 2022 was largely related to the PCS one and two legal settlement, which primarily impacted CAP cohorts we made a similar assumption update to reflect the positive impact of the choice to legal settlement in the fourth quarter. However, the P&L impact was muted because the settlement primarily impacted uncapped cohorts. The assumption changes implemented better align near-term projections with our recent experience for cost of care, mortality incidents and lapses for our healthy lives, which had a net unfavorable impact in the fourth quarter. We also updated our disabled life mortality assumption to reflect continued favorable expectations over the next few years as we emerge from COVID based on favorable recent rate increase approval experience and feedback from regulators, we have updated our assumption for future approvals and benefit reductions to reflect additional future value. This assumption update demonstrates our confidence and expectation have continued success in achieving actuarially justified LTC rate increases. Unlike the GAAP earnings impact resulting from LDTI. updates to best estimate assumptions for LTC healthy lives are reflected in cash flow testing margin on a statutory basis. However, assumption updates for disabled life reserves are reflected in statutory income. Similar to GAAP, the assumption updates and cash flow testing resulted in a net $58 million increase in statutory reserves.
I will now turn to our Life and Annuity segment GAAP results on Slide 14. The segment reported an adjusted operating loss of $183 million, driven by an adjusted operating loss in life insurance of $206 million, partially offset by adjusted operating income of $9 million from fixed annuities and $14 million from variable annuities in life insurance results were primarily driven by unfavorable long-term assumption updates, which had a pretax impact of $226 million mortality was also unfavorable compared to the prior quarter and prior year. Dac amortization expense was slightly lower than the prior year due to lower lapses and block runoff, unlike LTC, which is split approximately 50 50 between cap and uncapped cohorts. Currently, the term life insurance business is primarily in uncapped cohorts, which mutes the impact of the actual to expected experience. Fixed annuities results were down versus the prior quarter due to less favorable fixed payout annuity mortality and down versus the prior year from lower net spreads. Variable annuities were up versus the prior quarter and prior year due to the favorable impact from assumption updates in the fourth quarter.
As shown on slide 15, the $226 million life assumption impact primarily reflected unfavorable updates to persistency assumptions for certain universal life products with secondary guarantees or ULSG and unfavorable mortality updates, including more modest mortality improvement in term and UL products. These updates are similar to those made by other insurers. However, at approximately $4 billion, our ULSG block is relatively small compared to others in the industry and as a closed block, it has not issued new business since 2016, leading to a smaller relative impact. The impact also reflects an expectation that mortality across all of our life products will remain elevated in the short term as we emerge from the pandemic, similar to the adjustment made to LTC disabled life mortality assumptions for universal life and term universal life were always on a best estimate basis with changes recorded through income, as was the case under the old accounting guidance and now under LDTI. assumption updates to our term life insurance business also impact INCOME instead of loss recognition testing margin under GAAP accounting. These liability assumption updates were only partially offset by favorable update in our UL products for the current interest rate environment. However, statutory updates in Life were net favorable due to a significant increase in the regulatory prescribed reinvestment rate in our ULSG products, which more than offset the other liability assumption changes. Note that for both life and LTC, our assumptions do not reflect any potential long-term impacts from COVID as we continue to monitor emerging experience.
Rounding out the fourth quarter GAAP results, Corporate & Other reported and an adjusted operating loss of $25 million, up from $18 million in the prior quarter, reflecting growth investments in care, Scout and taxes.
Turning now to our statutory results for our US life insurance companies, which we believe better represents their underlying performance and our primary focus in managing these companies Slide 16 illustrates the continued benefit. The in-force rate actions and legal settlements have on our LTC business. As shown through the $1.6 billion benefit the statutory income on a pretax basis recognized year to date. Overall, statutory earnings in LTC. were $79 million in 2023, down from the $257 million during 2022, primarily due to higher claims as the block ages and block runoff, which is partially offset by larger impacts from in-force rate actions and legal settlements.
Slide 17 shows that paid claims are increasing as the blocks age and pandemic trends subside. Paid claims will continue to increase as peak claim years on our largest blocks choice one and Choice two are over a decade away. This trend is expected and incorporated in our long-term assumptions and reserve methodology. We will continue to monitor new claims growth and benefit utilization trends.
Slide 18 shows our fourth quarter total pretax statutory income for the US life insurance companies of $148 million. This was driven primarily by variable annuities from the net favorable impact of equity market and interest rate movements in the quarter, as well as net favorable impacts from assumption updates in the quarter, primarily in life insurance, LTC had a $467 million pretax benefit from in-force rate actions and legal settlements, but this was largely offset by higher claims as the block ages.
Consolidated risk-based capital ratio for Genworth Life Insurance Company, or Greg was 303% at the end of the year compared to 291% in the prior year. Helix consolidated balance sheet remains sound with capital and surplus as of the end of the year of $3.4 billion. Cash flow testing margin in our life insurance companies remain positive at the end of the year with Calix margin ending within the $0.5 billion to $1 billion range. After the assumption updates, our final statutory results will be available on our investor website with our annual statement filings later this month.
Moving to our investment portfolio, which is summarized on Slide 19. We remain confident in our positioning and believe we have the right strategy, given the products in our portfolio and the duration of our liabilities. As a reminder, the majority of our assets are in investment grade fixed maturities that we generally buy and hold to support the US Life Insurance Company's liabilities with unrealized gains and losses impacting equity through changes in other comprehensive income. Because the liabilities are very long duration, especially for LTC, we have very limited liquidity risk. The portfolio continues to benefit from the high interest rate environment. New money is currently being invested between 5.75% and 6%, excluding alternative investments, which have targeted returns of approximately 12%. The current attractive new money rates will benefit the portfolio over time.
Our net investment income reflects both solid base portfolio performance and strong returns in our alternative assets program, which is comprised mainly of diversified private equity. Our commercial real estate exposure is approximately 16% of our total portfolio and is concentrated in higher quality investment grade assets with office exposure of approximately 19% of our real estate investments.
Next, turning to the holding company on Slide 20. We continued to return capital to shareholders via share repurchases in the fourth quarter, repurchasing $35 million at an average price of $5.90 per share and another $25 million through February 13th, we received $128 million of capital from enact and$ 64 million from inter-company tax payments in the fourth quarter. We ended the year with $350 million of cash and liquid assets. For the full year, we received a total of $234 million of net inter-company tax payments. We have now fully utilized our available tax assets, meaning we will have less net cash inflows during 2024 to deploy.
Tom reviewed our capital allocation strategy, and I'll reiterate that our top priorities remain to invest in long-term growth through care, Scout's services, return cash to shareholders through our share repurchase program when our share price is below intrinsic value and opportunistically pay down debt when attractive to us. We're very pleased with the value created for shareholders through our share repurchase program. In 2023, we fully completed the initial $350 million program that began in May 2022. We have an additional $316 million remaining under our current authorization as of February 13th and in 2024, we expect to allocate roughly $125 million to $150 million to share repurchases. This range could be higher or lower, depending on our cash position, share price and market conditions and is lower than the amount we've repurchased in 2023, given that we have fully utilized our tax assets also in 2023, we completed a successful consent solicitation from bondholders, representing the majority in principal amount of our senior notes due in 2034. This transaction amended a restrictive covenant that limited our ability to repurchase our 2066 subordinated notes. We now have greater optionality to opportunistically buyback holding company debt when it's attractive relative to our other uses of capital in the fourth quarter, we repurchased $21 million of debt, reducing our total holding company debt to $856 million after achieving our target debt level in 2022, we strive to maintain a debt-to-capital ratio of 25% or below attributing no equity value to LTC life and annuities. As of year end, our debt to capital ratio was strong and below this target, we are pleased with our financial flexibility given our liquidity level, sustainable cash flows from enact and manageable debt level.
In closing, we are delivering on our strategic priorities while proactively managing our liabilities and risk. The multiyear rate action plan and the additional benefit from the three LTC legal settlements are enhancing our ability to honor policyholder commitments and further stabilize the legacy LTC block and act as a strong driver of shareholder value as evidenced by its stable earnings, increasing book value and capital returns.
Looking ahead, we will continue to focus on delivering sustainable long-term growth through care Scout while returning meaningful value to shareholders through share repurchases.
Now let's open up the line for questions.

Question and Answer Session

Operator

Thank you, with you Al by pressing star one on your telephone. You are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment again, press star one to ask the question. Our first question is going to come from Ryan from KBW.

No, hey, good morning. I had a few questions on long-term care. First one was on Carrasco. I believe you said you expected 1 to 1.5 billion of some value of claims savings related to Carrasco overtime. I guess first, I just wanted to understand, did you already assume that in your reserve projections or is that something that you would view and a possibility that you haven't reflected yet?

Thomas McInerney

So Ryan, great. Question, and it's the latter. So we we assume the savings will be in that range one to $1.5 billion. But we're we're just rolling out the network. We've had some matches probably about 30 so far since we're just starting up. So as we get more more information on how many are using the quality network versus another provider and how big the discounts are. And our goals are to be the discounts between 10% and 20% so far where we're able to achieve discounts at the higher end of that range. So as we gain more experience at some point, we'll view it as statistically significant. And at that point, you'll you'll see us assume that and that would reduce the amount of premium increases that we need in the future by that amount. So to your question, it's what we project, but it's we haven't factored it into and assumed in our projections the value of it.

Yes.

Understood. And then secondly, I guess wanted to understand if you go to a point of economic breakeven on long-term care, obviously that's if you want you want to be in that place? Is that what are the broader implications for for January once once you get to that?

Thomas McInerney

So that plays well, yes. Great question. So it's been a but a long-term effort. And we've achieved I mean, we're very pleased with the results of adding at 28 billion into the economics of the business. We think by the end of 2026, that will be largely breakeven sales sustainability. And at that point, I would say in most states, so let's say 35, 40 states will be done with premium increases. As we've said before, over over the quarters, Ryan, as you know, there are a number of states who are well below average. I do think in those states even beyond 2026, we'll continue to pursue rate increases until we get that those stays to the average of all the states.

Thanks. And then just one last one, you've obviously made a lot of progress on achieving great actions. But I think if you look back over time, your your either your loss recognition testing margin or your cash flow testing margin, it remained about the same despite a very high level, have achieved rate increases and benefit reductions, which implies a similar level of adverse reserve development from assumption updates over that same period. I guess what gives you the confidence that this time once you achieve these rate increases, you won't have further offsets from some negative reserve?

Yes.

Thomas McInerney

Another great question. And there's a lot embedded in that. I would say that we've now paid 360,000 claims and 26 billion of value of claims. And if you look at that one slide. It shows the claims we've actually paid in the last so many years. So and every year we look at the new claims get added to the total claims and based on those, we determine whether there are any of our long-term assumptions and EBIT change. So my view is we're getting near the end. I think if you look at that there's another slide that shows what the net present value total that we're looking to achieve to get to that breakeven is 33.3 billion, and we have achieved 28 billion today that 33.3 could go up potentially could go down over time. And so I think while there they're there are likely are some assumptions that will based on new claims, we might change, I think based on 10 or 11 years of looking at it, I think we're we're getting near the end. So I don't think there's a lot left. The other way we sort of look at things. We think we're 85% of the way to being at breakeven or sustainability.

Jerome Upton

Tom, could I just add one comment for Ryan to consider, and that is our block has gone through measurable settlement activity and it provides risk resiliency to the block overall through the actions that have been taken the selections that have been made by the policyholder. So as should we see adverse development there, those reductions that have occurred through the settlement will add meaningful value to us and really cuts off tail risk for the block. I agree with that the reality that you have or is it that they're doing, but thank you for the introduction at the beginning, Tom, and thank you for the good questions, Ryan.

Operator

I reiterate what drove added in terms of the resiliency of the benefit reductions and some elements of adding additional support as we think about how on the development of adverse assumptions in the future.

Jerome Upton

Thank you.

Thomas McInerney

First of all, thank you and they outline it.

I think that was there. And I appreciate the answers.

Thomas McInerney

Thanks so much.
Thanks for your questions.

Operator

Once again, if you'd like to ask a question, please press star one. Our next question is going to come from Christopher Bowden, private investor.
Go ahead.
What did you ask to have a question per your line is there?
Well, thank you for listening to the call. You mentioned that our risk-based capital ratio was 300 and sorry, 303%. Did you give a risk-based capital ratio for ClearAg?

Thomas McInerney

We did. We did not, but Joe Mahler, Jeremy, we have that number if you want to go?

Jerome Upton

Yes, I'll let Chris, Chris. We have not provided that number, but it's north of 400% and it's gone up throughout the course of 2023. We've had particularly good results on the variable annuity block given equity market conditions. So it's north of 400%.

Thomas McInerney

And generally for us just to follow up on that in general life insurance and annuity company or a lag there. And there's very little very little of any LTC policies. It's mostly a life and annuity company. So it's RBC is significantly better because it hasn't had that the statutory losses of the past that we had in the LTC companies.

Jerome Upton

Chris, I want to add I want to add one thing, all of our statutory filings will be coming soon. So you will be able to access and see the metrics in specific detail, but I'm glad Mike, while I have one more question.

Operator

Yes, you are going to act and nucleic strong risk-based capital ratio. And I would say 400% of it could be characterized as strong up when you think why do you feel that A.M. Best is still only giving Gleevec a affair, best training?
Yes.

Thomas McInerney

Look, I would say we don't always agree with the rating agencies. I think go act as a very strong company. I think any RBC ratio really about three 50 as usually deem to be strong investment grade. But I think, Christopher, the rating agencies so AM Best and probably S&P and Moody's because we've said that we're not going to put anymore shareholder capital into the life companies. And that's all three that they're a close system. They operate on their own, I think, and therefore, I will rely on premium rate increases. I think the rating agencies have based a rating on that. And so yes, we're disappointed we think they should be higher, but now that's where they are. But it's a good question.

Operator

Good morning. Thank you for the information. I appreciate.

Jerome Upton

Thank you.

Operator

And once again, if you have a question, please.
Sorry And ladies and gentlemen, I have time for one final.

Correct?

Operator

Yes, sorry. Again, we'll pause for a moment. While I never we have one more question mark, sir Sebastian from Cantor Fitzgerald. Please go ahead.

Thomas McInerney

Good morning. Thank you very much for the call. My question refers to the bottom of slide number 20 of your presentation. You talk about the share repurchases as well as the repurchase, the 21 million of principal of 2034 and your 2066 final maturity subs. I'm wondering if you can share any plans to continue to repurchase both of these bonds going forward? And if you could also provide some detail in terms of proportionality of that $21 million bought back broken down between the 2034 and 2066 notes. Thank you so much.
Thanks, Arthur. I'll start out and then turn it over to Jerome, our CFO, to give you more details, but we negotiated in 2023 a very good adjustment to the bond offering. So prior to a consent from bondholders, we couldn't really repurchased the 2060 sixes, which have traded well below par in the last several years. So we we agreed with them in exchange for repurchasing some of the 30 fours going forward for every dollar of 2030 for debt that we repurchased, we can buy $2 of the 2066 debt and because both are trading below par, but particularly the 2060 sixes, we have then opportunistically repurchasing debt. Our priority is still to focus more on repurchasing shares because that's a better economic return for us, our stakeholders, shareholders in particular, but we'll continue to do up opportunistic debt. So we did a reasonable amount in 23. And Jerome, I'll ask Rob to give you the specific numbers. But going forward, I think you can expect repurchases sort of in that range going forward. But John, you want to give an update on the specifics?

Jerome Upton

Arthur, thank you for the question. We're pleased with the modification of the replacement capital covenant. And I would say in the 21 million that you highlight on slide 20, that the majority of that was a 2030 fours that was part of what we agreed to as part of the consent. And there was a smaller piece of the 2060 sixes. And I would just say, as you think about adding shareholder value.
I agree with Tom. Our focus is going to be on share buybacks. As you think about economic value, we just feel very good about where we're buying. I think you've seen the ever today results on our share repurchase program, which is a just a little above five, and we're very pleased with that. So we'll continue to allocate and focus on share buybacks at pricing levels that we've highlighted will continue to be opportunistic. But proportionately, we're at a good place from a leverage perspective. We're well below our target right now and you'll see the preponderance of our capital allocation going to share buybacks.
Got to.

Thomas McInerney

Thank you. So very much for clarifying. Much appreciated. Thank you.
Yes, thanks, Arthur.
Thanks for your questions. So Jamie, back to you, I think I think it looks like that's all the questions we have. But if you can confirm that, and then I'll just wrap up helping space.

Operator

And gentlemen, as there are no further questions, I will now turn the call back over you, Mr. McInerney, please closing.

Thomas McInerney

Thank you very much, Jenny, and thanks to everybody on the call.
Thanks to Ryan, Christopher and Arthur for your great questions. I think there are very good ones, and hopefully we gave you a good responses. But in closing, just to sum up, we're very pleased with and a strong performance. We're very pleased with the progress there as we move forward we've made with our myAir app getting to 28 billion of net present value achieved. We're pleased with the progress in carrier Scout, particularly with building the quality care network it up now to 125 providers that are credentialed have been approved for quality and are bending the cost curve by negotiating the discounts. And no other LTC insurers have really tried to do that. So we're the first one the health insurers that have had a lot of success at that over time. So we're pleased with that. As I said, we hope by the end of the year to have 600 providers that are credentialed in our network. And if we get to that level, we'll have two thirds of our policyholders and two thirds of cross the country have 65 year olds covered by a quality care network provider homecare provider in their in their ZIP code. And then finally, we'll continue to focus on share repurchases. As we said, as we said to Arthur opportunistically, we'll look to buy back a little bit of debt, but we've had we've we've added value. Hopefully, shareholders are pleased with the improvement in our share price over the last couple of years, and we look to continue to do that. And in the end, you know, through care, Scott, our goal is to long-term increases, increased value by expanding our long-term care services and insurance business through care Scout and helping many more families navigate the very challenging aging journey that they face with confidence.
So thank you all of the investors and others for your interest and support of Genworth and your investment in our company. And we'll see you next quarter.

Operator

And with that, Jenny, we'll end the call Ladies and gentlemen, this concludes Genworth Financial quarter conference call. Thank you for your participation time. The call will yes.