Genworth Financial, Inc. (NYSE:GNW) Q2 2022 Earnings Conference Call August 2, 2022 9:00 AM ET
Company Participants
Sarah Crews – Director, Investor Relations
Tom McInerney – President & Chief Executive Officer
Dan Sheehan – Chief Financial Officer & Chief Investment Officer
Conference Call Participants
Ryan Krueger – KBW
Geoffrey Dunn – Dowling & Partners
Operator
Good morning, women and gents, and welcome to Genworth Financial’s Second Quarter 2022 Earnings Conference Call. My title is Katie, and I will probably be your coordinator as we speak. At this time, all members are in a hear-solely mode. We will facilitate a query-and-reply session in the direction of the top of as we speak’s convention. As a reminder, this convention is being recorded for replay functions. [Operator Instructions]
I’d now like to show the presentation over to Sarah Crews, Director of Investor Relations. Please go forward.
Sarah Crews
Thank you, operator. Good morning and welcome to Genworth’s second quarter 2022 earnings name. Today, you’ll hear from our President and Chief Executive Officer, Tom McInerney; adopted by Dan Sheehan, our Chief Financial Officer and Chief Investment Officer.
The slide presentation that accompanies this name is offered within the Investor Relations part of the Genworth web site investor.genworth.com. Our earnings launch and monetary complement will also be discovered there, and we encourage you to evaluation these supplies.
Following our ready remarks, we are going to open the decision up for a query-and-reply interval. In addition to our audio system, Brian Haendiges, President of our US Life Insurance phase; and Jerome Upton, Deputy Chief Financial Officer and Controller, may even be obtainable to take your questions.
During the decision this morning, we could make varied ahead-wanting statements. Our precise outcomes could differ materially from such statements. We advise you to learn the cautionary notes relating to ahead-wanting statements in our earnings launch and associated presentation in addition to the danger components of our most up-to-date annual report on Form 10-Ok as filed with the SEC.
This morning’s dialogue additionally consists of non-GAAP monetary measures that we imagine could also be significant to buyers. In our monetary complement, earnings launch and investor supplies, non-GAAP measures have been reconciled to GAAP the place required in accordance with SEC guidelines. Also, references to statutory outcomes are estimates because of the timing of the submitting of the statutory statements.
And now I’ll flip the decision over to our President and CEO, Tom McInerney.
Tom McInerney
Thank you, Sarah. Good morning, everybody, and thanks for becoming a member of our second quarter earnings name. Genworth delivered sturdy efficiency within the second quarter, making continued progress towards our technique to strengthen our monetary basis and create worth for our shareholders.
Our technique is designed to ship lengthy-time period progress whereas additionally defending shareholder worth in draw back situations, which is very vital in as we speak’s troublesome market setting.
This difficult macroeconomic backdrop is pushed by a confluence of competing components, together with excessive inflation, rising rates of interest, new COVID-19 variants, fairness market volatility, and a decent labor market, the mix of which has created financial uncertainty.
While we must always not examine this era to different market downturns, I imagine that the anticipated sharp enhance in rates of interest by the Federal Reserve to mitigate historic ranges of inflation will doubtless adversely impression the financial system within the close to to medium time period and proceed to create market volatility.
From the place we stand as we speak, nevertheless, I imagine Genworth is nicely positioned to climate this volatility and financial uncertainty due to sturdy ranges of capital in our companies, a conservatively positioned funding portfolio, a really low debt-to-capital ratio, and modest annual debt service obligations.
Our execution towards our strategic priorities reinforces that positioning as we proceed to ship sturdy efficiency from our Enact subsidiary, cut back holding firm debt and return worth to shareholders within the type of share buybacks.
First, let me evaluation our second quarter outcomes at a excessive degree. US GAAP web earnings was $181 million for the second quarter, whereas adjusted working earnings was $176 million or $0.34 per share. These outcomes had been led by an Enact, which reported $167 million in adjusted working earnings. US Life reported adjusted working earnings of $20 million for the quarter pushed by LTC insurance coverage and glued annuities, partially offset by losses in life insurance coverage.
Turning to statutory leads to Genworth Life Insurance Company, or GLIC, we had an estimated pre-tax statutory lack of roughly $60 million. The loss is primarily pushed by fairness market volatility, which required us to regulate reserves and capital in a detailed block variable annuity enterprise. Our estimated RBC ratio was 290% as of quarter finish. Our closing statutory outcomes will probably be obtainable with our second quarter statutory filings later this month.
Enact’s continued sturdy working efficiency in a slowing housing market has delivered shareholder returns together with inventory value appreciation and dividends of over 19% because the IPO in September of 2021 by way of Friday’s shut regardless of significant market volatility throughout that point. Since the IPO, Genworth has obtained $182 million in dividends from Enact, together with $19 million within the quarter. Genworth’s shareholders profit from our possession of Enact by way of its quarterly and particular dividends, which have enabled us to execute towards our strategic priorities, together with debt discount, share buybacks and the continued improvement of our lengthy-time period progress technique by way of international care options.
In addition, the market worth of the Enact has elevated over the past a number of months and an entry traded in keeping with comparable friends. Enact has continued to ship sturdy efficiency on account of its differentiated technique, stability sheet power, excellent administration crew and skill to mitigate danger, whereas constructing a excessive-high quality guide of insurance coverage in drive.
Enact’s stand-alone guide worth, excluding AOCI, has elevated from $3.9 billion on the finish of the second quarter of 2021 to $4.4 billion on the finish of the second quarter of 2022. The enterprise continues to function from a place of power writing significant ranges of NIW and benefiting from larger persistency. The firm has had sturdy loss efficiency, which has allowed it to launch reserves — extra reserves within the first and second quarters.
Enact additionally continues to keep up a robust stability sheet and powerful regulatory capital ratios and executed a $200 million revolving credit score facility, offering extra monetary flexibility going ahead. Both Enact’s and Genworth’s scores have steadily improved because the IPO on account of Enact’s sturdy working efficiency and capital ranges and the numerous deleveraging actions taken by Genworth. These components show our execution towards our strategic precedence to maximise the worth of Enact to Genworth shareholders.
Genworth’s deleveraging has improved our credit score profile, and we proceed to focus on lowering our debt and paying off the remaining 2024 debt by the top of the third quarter, which might deliver Genworth’s father or mother debt to $900 million. This would additionally deliver our debt-to-capital ratio right down to one of many lowest within the life insurance coverage business, which positions us nicely to climate the market uncertainty within the subsequent 12 to 18 months.
In the second quarter, we repurchased roughly $48 million of our 2024 debt leaving roughly $152 million in principal excellent. Given our holding firm money place, a quarterly dividend from Enact and the expectation of receiving a major particular dividend from Enact later this 12 months, we plan to retire the rest of the 2024 debt within the third quarter of 2022.
On July twenty first, we obtained one other scores improve from Moody’s, our fourth improve from the score businesses since September, which displays our a lot improved monetary and leverage place. Upon the retirement of our 2024 debt, our credit score profile will probably be enhanced even additional, and we imagine we will probably be nicely positioned for score businesses to proceed to mirror these enhancements.
As we introduced final quarter, given our optimistic free money circulate outlook, stability sheet enhancements and continued sturdy working efficiency, our Board approved a share repurchase program of as much as 350 million. In the second quarter, we repurchased 15 million value of excellent shares. And subsequent to quarter finish, we’ve accomplished an incremental 15 million. In complete, we’ve repurchased over 7.9 million shares at a median value of roughly $3.80 per share.
We stay opportunistic in relation to shopping for again shares and imagine it’s a very efficient instrument to return worth to shareholders within the close to time period. As beforehand talked about, we anticipate nearly all of our repurchase exercise to happen after we retire the remaining 2024 DAC within the third quarter. Beyond repurchases, as we proceed to construct important extra money, the Board intends to contemplate paying a quarterly dividend to Genworth shareholders in 2023.
With respect to our potential longer-time period money circulate, I wished to offer an replace relating to our settlement with AXA and potential recoveries in that case. Santander made a strike out utility within the UK Court, which is analogous to a movement dismissed in US courts. The court docket just lately dominated on that utility, principally Enact’s favor. This is a superb improvement, permitting the case to maneuver ahead. Based on the court docket schedule and the period of time it has taken to get so far, we imagine {that a} trial on this case shouldn’t be doubtless earlier than the primary quarter of 2024. We will proceed to speak with AXA searching for to maneuver the case forward as shortly as attainable.
With respect to the potential of recoveries within the AXA matter, as we have stated earlier than, it’s untimely to foretell the quantity of potential recoveries. What I can say is that with curiosity, AXA is presently searching for an extra of $800 million from Santander based mostly on the present grievance, and that quantity is more likely to be up to date in some unspecified time in the future. If AXA prevails in its claims, Genworth has important upside in recouping a good portion of the roughly $830 million it has paid in its settlement with AXA.
Longer time period, we’re targeted on creating worth by way of the event of our lengthy-time period care progress technique to change into a complete supplier of lengthy-time period care providers and options. We proceed to take a client-led strategy to this new enterprise and are primarily exploring alternatives in lengthy-time period care providers and care navigation.
As we search to shortly shift from technique improvement to testing and implementation, we made a crucial rent within the quarter. Dr. Tim Pack joined Global Care Solutions to guide our aged care providers enterprise within the U.S. Tim is a examined entrepreneur within the elder care house and a Harvard-trained emergency medication doctor. He based two expertise-enabled care providers companies, Call 9 and Curve Health.
Call 9 was a medical expertise startup dedicated to redesigning healthcare for seniors by lowering pointless hospitalizations by way of human heart design and scale. From there, Tim leverages learnings from Call 9 to construct his subsequent enterprise, Curve Health, which is a telemedicine and information excessive-progress begin-up connecting physicians to power care sufferers in lengthy-time period care and put up-acute settings, together with a nursing houses, assisted residing and residential care.
I’m happy to welcome Tim, who has hit the bottom working with a Global Care Solutions crew, as he focuses on implementing our technique, which is able to initially be targeted on care service navigation in choose take a look at markets subsequent 12 months. Shifting gears, I need to briefly contact on our precedence to additional stabilize our legacy lengthy-time period care portfolio by way of the continued execution of our multiyear charge motion plan or MYRAP. We have achieved $153 million in annual premium charge enhance approvals 12 months-to-date by way of the second quarter, bringing our cumulative progress towards the MYRAP program to $20.7 billion on a web current worth foundation since 2012.
In closing, I’m more than happy with our progress through the first half of the 12 months and imagine Genworth is nicely positioned to climate no matter comes at us within the second half. Genworth has a really sturdy stability sheet, expectations of continued sturdy money circulate from Enact and improved scores.
Further, I sit up for persevering with to develop our lengthy-time period progress technique in lengthy-time period care as we search to redefine the way forward for lengthy-time period care. With that, I’ll flip the decision over to Dan to offer extra particulars on our second quarter outcomes, our monetary place and our capital allocation technique going ahead.
Dan Sheehan
Thank you, Tom, and good morning, everybody. In the second quarter, we generated sturdy working outcomes and continued to boost our monetary place amid a difficult market backdrop. We’re particularly happy with the sturdy earnings and money circulate delivered by Enact, the return of capital to shareholders and the continued deleveraging of our stability sheet.
As Tom talked about, within the second quarter, we repurchased $48 million of our 2024 debt maturity, leaving a stability of $152 million which we plan to name later this month, enabling us to have it absolutely retired by the top of the third quarter. At that point, we could have $900 million of debt excellent, reaching our strategic precedence of lower than $1 billion of debt.
Moody’s Investors Service just lately acknowledged our enhanced monetary power with the two-notch improve to BA2, reflecting our improved liquidity place and monetary flexibility. We’re happy that our scores proceed to mirror the substantial progress we have made, which in flip have had favorable impacts to Genworth and Enact. We will proceed to work with the score businesses to make sure their views mirror our enhanced credit score profile by way of scores enhancements.
In phrases of returning capital to shareholders, we have repurchased $30 million of Genworth inventory thus far, representing roughly 8 million shares at a median value of roughly $3.80 per share. There’s roughly $320 million remaining on our authorization. Once we attain our debt goal and start to build up extra money, we’ll be able to extend the tempo of our share repurchase program.
Now I’ll flip to an in depth dialogue of the second quarter outcomes, starting on Slide 5. Second quarter web earnings was $181 million and adjusted working earnings was $176 million or $0.34 per diluted share. In the prior quarter, we had web earnings of $149 million and adjusted working earnings of $131 million or $0.25 per share. Results within the present quarter had been larger, reflecting adjusted working earnings of $167 million from Enact, $21 million from our US Life Insurance phase and $2 million from our runoff phase, partially offset by an adjusted working lack of $14 million from company and different actions.
Interest charges continued to rise within the present quarter. In the brief time period, larger charges will trigger slowing bond name and business mortgage mortgage prepayment volumes, however we are going to profit from our inflation-protected and floating charge securities, portfolio yields may even profit as we’re capable of reinvest new cash at larger charges.
In the second quarter, the acquisition yields for lengthy-time period care had been the best they have been in three years. For Enact, rising charges will assist a extra significant yield impression because of the shorter length of the portfolio.
Given that Enact hosted its earnings name earlier this morning and offered an intensive replace, I’ll focus on the important thing highlights. As proven on slide 5, Enact’s adjusted working earnings to Genworth was $167 million, a rise of 24% from the primary quarter.
Turning to slip six. Insurance in-drive elevated 9% 12 months-over-12 months to $238 billion, pushed by sturdy new insurance coverage written and better persistency, given rising mortgage charges, which principally diminished refinancing exercise.
Moving to slip seven. Current quarter outcomes mirrored a good $96 million pretax reserve launch, which drove a loss ratio of unfavorable 26%. The reserve launch was pushed predominantly by elevated treatment exercise associated to COVID-19 delinquencies.
The estimated PMIER sufficiency ratio of 166%, or roughly $2 billion above printed necessities, remained sturdy and was down barely versus the prior quarter, primarily from Enact’s working firm distribution to its holding firm.
We’re more than happy with Enact’s continued sturdy efficiency within the second quarter, which additionally marked their first quarterly dividend fee of $0.14 per share that generated roughly $19 million to Genworth. The quarterly dividend, together with the potential for added return of capital from Enact later this 12 months, will proceed to strengthen our holding firm stability sheet.
I’ll now cowl our US Life Insurance phase outcomes beginning on slide eight. Segment reported adjusted working earnings of $21 million, reflecting working earnings of $34 million from LTC and $21 million from mounted annuities, partially offset by an working lack of $34 million in life.
In our LTC enterprise, adjusted working earnings was $34 million, in comparison with $59 million within the prior quarter and $98 million within the prior quarter. Current quarter mirrored decrease terminations in each our declare and wholesome life populations and mortality declined.
In the primary quarter, we typically see larger seasonal mortality, it is decreased within the second quarter. In addition, the elevated mortality we have seen because the second quarter of 2020 with the onset of the pandemic was decrease within the present quarter, which is per nationwide COVID-19 mortality traits.
The sequential lower in lively declare mortality counts may be seen on slide 9. During the quarter, we diminished our beforehand established COVID-19 mortality reserve by $15 million pretax, bringing the remaining stability to $110 million. We did see a better degree of pending new claims within the first half of the 12 months in comparison with 2021, a sign that new declare incidents, whereas nonetheless under 2019 ranges, as proven on slide 9, may develop and development again to its historic ranges.
New declare severity continued to extend within the present quarter, primarily reflecting the anticipated getting older of our newer blocks of enterprise, which are inclined to have larger inflation protection and each day profit quantities than the older blocks. In addition, through the pandemic, a bigger share of our claimants sought residence care as an alternative of facility-based mostly care and in latest quarters, we have seen that development reverse.
We proceed to make important progress in addressing danger in our legacy LTC portfolio by way of the multiyear charge motion plan, as you possibly can see on slides 10 and 11. During the primary half of 2022, we obtained LTC in-drive charge motion approvals impacting $487 million of premiums, with a weighted common approval charge of 31%.
The ensuing $153 million in annual premium charge will increase brings the full web current worth from achieved LTC charge actions to $20.7 billion since 2012, up roughly $1.1 billion since 12 months-finish.
Reserve releases ensuing from profit reductions decreased from the prior quarter and prior 12 months because the implementation of the Choice 1 authorized settlement was materially accomplished within the first quarter. The pending settlement associated to PCS 1 and a couple of insurance policies, which mixed symbolize roughly 15% of our LTC block, turned closing on July twenty ninth. We anticipate to start implementation of the settlement within the third quarter, however given the 90-day policyholder election window, we might anticipate monetary impacts starting within the fourth quarter.
Because the mailings happen within the policyholder anniversary date, nearly all of the impacts will probably be in 2023. We’ve additionally obtained preliminary approval from the court docket on the pending settlement associated to our Choice 2 insurance policies, which represents roughly 35% of our LTC block.
The closing court docket listening to to approve that settlement is scheduled for November. Should we obtain closing approval and don’t have any appeals, we may anticipate to start implementing the settlement 2023. The two new settlement agreements are much like the Choice 1 settlement and relying on policyholder election charges and the varieties of elections chosen, we might anticipate total favorable impacts.
Turning to slip 12 and our Life Insurance product. We to working losses of $34 million in comparison with working losses of $79 million within the prior quarter and $40 million within the prior 12 months. The key driver of the development seen within the present quarter was decrease mortality. COVID-19 claims accounted for under $3 million of the loss, which was considerably decrease than the prior quarter.
In the present quarter, complete time period deferred acquisition price, or DAC amortization, was $22 million after-tax, which was larger than the prior quarter and prior 12 months, primarily from a rise in lapses as our 20-12 months time period block issued in 2002 skilled larger lapses because it exited the extent premium interval.
We recorded a $12 million after-tax cost for DAC recoverability testing in our common life insurance coverage merchandise associated to proceed block runoff and mortality expertise in comparison with $19 million within the prior quarter and $13 million within the prior 12 months.
Regarding mounted annuities, adjusted working earnings was $21 million in comparison with $16 million within the prior quarter and $13 million within the prior 12 months, reflecting larger mortality in our single premium quick annuity product and decrease DAC amortization within the mounted index annuity product because of the rise in rates of interest.
In the runoff phase, our adjusted working earnings was $2 million for the present quarter in comparison with $9 million within the prior quarter and $15 million within the prior 12 months. Our runoff phase is made up primarily of variable annuity and variable life insurance coverage merchandise with $3.9 billion in property beneath administration and is 22% smaller than on the finish of 2020. Current quarter outcomes had been adversely impacted by the unfavorable fairness market efficiency.
As indicated on slide 14, we’re estimating the consolidated danger-based mostly capital ratio for Genworth Life Insurance Company, or GLIC, to be 290% at June thirtieth, a slight decline from 296% at March thirty first, and in keeping with 2021 12 months-finish outcomes. The lower displays the impression of unfavorable fairness market efficiency on our variable annuity merchandise, which is extra pronounced in our statutory outcomes than GAAP adjusted working earnings.
You will see on slide 14 that the statutory stability sheet of the US life corporations has strengthened materially over the previous few years, with important enhancements within the capital and surplus quantities and unassigned surplus.
As a reminder, the life insurance coverage business will probably be implementing a brand new accounting commonplace in January 2023, the lengthy length focused enhancements or LDTI, which would require us to symbolize our GAAP financials from January 2021 ahead. This change impacts our US Life Insurance and runoff segments however not the Enact phase or company and different, and it’ll not impression our financial worth, money flows, statutory accounting or how we handle the enterprise. We are on observe to implement this main accounting change, and we are going to present an replace on our progress and anticipated transition impacts later this 12 months.
Turning to the Holding Company on slide 15. We ended the quarter with $228 million of money and liquid property. Key money exercise included an influx of $58 million from web intercompany tax funds and the $19 million dividend from Enact in addition to a $49 million outflow, reflecting debt discount.
As I famous earlier, we anticipate to attain our debt goal of $900 million within the third quarter. Once we accomplish that milestone, our subsequent debt maturity shouldn’t be till 2034. In addition, the continuing quarterly dividends from Enact will greater than cowl our debt service prices of roughly $50 million per 12 months.
We additionally anticipate to obtain a further return of capital from Enact within the fourth quarter of 2022 based mostly on Enact’s expectation to return roughly $250 million to its shareholders in 2022 and adjusting for our majority possession of 81.6%, we might anticipate to obtain roughly $150 million of extra return of capital to Genworth on high of the quarterly dividend funds from Enact.
Further, we proceed to anticipate the holding firm will obtain roughly $200 million to $250 million from web intercompany tax funds this 12 months. This expectation is topic to the taxable earnings generated by our subsidiary companies and given the potential for macroeconomic headwinds, it may change.
For the primary half of the 12 months, the holding firm has obtained $122 million in web intercompany tax funds. We anticipate our holding firm tax attributes to be exhausted in 2023.
Our capital priorities, which information our capital allocation choices, stay constant. Upon reaching our debt goal on the finish of the third quarter, we are going to deploy our extra money in the direction of our progress initiatives and shareholder return initiatives. Our first precedence will probably be investments in progress, specifically our Global Care Solutions enterprise, the place our preliminary focus will probably be on lengthy-time period care recommendation and repair choices, that are much less capital intensive and insurance coverage choices. We may even keep our dedication to returning capital to shareholders by way of share repurchases. We proceed to imagine our inventory value is buying and selling under intrinsic worth and that repurchases are an efficient solution to capitalize on that disconnect or returning worth to Genworth shareholders.
Before I shut, I wished to notice that regardless of the $2 billion unrealized loss stability in our funding portfolio due to the numerous enhance in rates of interest within the second quarter, our credit score profile stays very sturdy with scores upgrades within the basic account meaningfully outpacing downgrades. The funding portfolio stays nicely-positioned to handle by way of the present financial uncertainty. In truth, we proactively managed our holdings forward of Russia’s invasion of Ukraine and don’t have any remaining direct publicity to both nation. And, in fact, we’re investing new cash on the most engaging yields in a few years.
In closing, I’m happy with our outcomes this quarter and with the continued progress in the direction of our strategic objectives. The excellent efficiency from Enact continues to offer a gradual money circulate stream, which is able to permit us to fulfill our debt goal within the third quarter and generate extra money circulate transferring ahead.
We proceed to make progress closing the hole within the legacy LTC guide, and the life firm stability sheet stays sturdy within the face of financial challenges. While there continues to be uncertainty across the present financial setting, I’m optimistic that Genworth is nicely-positioned to proceed to carry out and execute on our technique.
With that, we’ll open it up for questions.
Question-and-Answer Session
Operator
Thank you. Ladies and gents, we are going to now start the Q&A portion of the decision. [Operator Instructions] We’ll take a query from Ryan Krueger with KBW.
Ryan Krueger
Hi, good morning. My first query is on the intercompany tax attribute. Was your remark that the tax attributes will probably be exhausted on the finish of this 12 months and you wouldn’t anticipate an additional profit in 2023, or would you anticipate some additional profit in 2023 earlier than they’re exhausted?
Tom McInerney
Thanks for the query, and we’ll give that one to Dan.
Dan Sheehan
Thanks, Tom. I suppose the best way I’d say it as we speak is that there is nonetheless a variety of uncertainty within the financial setting. We will use nearly all of the remaining tax attributes in 2022 and in the end exhaust them in some unspecified time in the future in 2023. And that may very well be mid-12 months, it may very well be slightly earlier or slightly later simply relying on the subsidiary outcomes.
Ryan Krueger
Got it. And then on the AXA-Santander lawsuit, are you able to simply remind us how the precise sharing of a restoration work? Is there a particular share of a restoration that you’d obtain, or are you able to give any extra shade there?
Tom McInerney
I feel, Ryan, I actually cannot add a lot to that apart from what I stated in my remarks. To the extent that AXA prevails within the litigation on condition that we have reimbursed AXA for a major quantity of losses they’d, we might anticipate important recoveries. But precisely how that may play out, it is to be decided as we undergo the litigation course of or AXA and Santander goes to the litigation course of.
Ryan Krueger
Got it. And then final query was on Global Care Solutions. I suppose, are you able to give us any sense like the way you’re occupied with the potential monetary impression of this and over what timeframe chances are you’ll begin to generate earnings from this new enterprise?
Tom McInerney
Ryan, good query. So I’d say, to start with, it is a capital-gentle enterprise. We’re not — it does not — we do not want scores. We need not put in capital to cowl danger-bearing like we’ve with the legacy enterprise. And so I feel it is — the — it will be based mostly on a digital expertise platform. And what we’re mainly going to be doing on this first part is we are going to — we’ve a nurse community, about 35,000 nurses. So in — whether or not it is Genworth policyholder or somebody with no current relationship with Genworth, we’ll assess the incapacity advisable care plan. And then we’re going to negotiate and develop a most popular supplier community based mostly on high quality and reductions. And so we might then anticipate to — as soon as we provide you with a care plan with our new consumer, refer them into the popular community, they’re going to get a reduction and the income revenue margins for us will probably be based mostly on, the consumer pays Genworth a charge for assessing the declare, developing with the care plan and getting them positioned in a excessive-high quality supplier wherever they’re situated.
So, the revenue margins will come from the consumer with an all-in, the consumer pays lower than they might in the event that they did this all on their very own. So, we do all of the work for them, get them positioned and we earn a charge on that. It’s laborious to foretell. As I stated, it isn’t a variety of capital apart from to cowl working capital prices, the price of the staff that will probably be hiring IT engineers to develop the software program. So these would be the bills.
And then we do anticipate the — it is about $50 million of the newborn boomers will in the end want care and they will want recommendation and providers. It’s a really fragmented market as we speak. There’s – there are some fintech corporations which are doing related issues to us, however most of them are one-cease outlets and we predict we will present the full service for an all-in price to the consumer lower than they may do on their very own. So sure, as we develop the enterprise, there’s a variety of leverage and it needs to be pretty excessive return enterprise, on condition that it does not require a variety of capital.
Ryan Krueger
Thank you.
Operator
We’ll take our subsequent query from Geoffrey Dunn with Dowling & Partners.
Geoffrey Dunn
Thanks. Good morning. I simply wished to revisit the prospect for share repurchase and your evaluation of intrinsic worth. When you are wanting on the intrinsic worth of G&W, is that the money flows and stability sheet, excluding life platform? Are you factoring any worth to the legacy life platform that you just at the moment have?
Tom McInerney
I feel what we have been saying, Geoff, for a few years is after we take a look at intrinsic worth, we take a look at the worth of Enact and we assume the intrinsic worth over the housing cycle. And so typically, our view is Enact within the MI is commerce at 1x guide or higher, in order that’s how we worth Enact. And then for now, we’re placing 0 worth in for the life corporations.
I do assume we may discover down the highway legacy enterprise, there’s life and annuity enterprise clearly has some capital related to that, that has some worth. And clearly, we’re not assuming any worth but for our new enterprise, however we predict that in the end may have worth. And then — so it is actually the intrinsic worth of Enact as we see it, as I described, 0 for the life corporations after which the web money, web debt, web company place.
Geoffrey Dunn
Great. Just need to make clear that. Thank you.
Tom McInerney
Sure, Geoff.
Operator
Ladies and gents, I’ll now flip the decision again over to Mr. McInerney for closing feedback.
Tom McInerney
Thank you very a lot, Katie, and because of all of you for becoming a member of the decision as we speak. I’d say we’re proud and inspired by our progress to-date with the enterprise in 2022, regardless of all of the challenges within the macro financial system. We additionally assume we’re doing nicely on our technique to create lengthy-time period care worth, lowering the debt, shopping for again shares, returning capital to shareholders. We sit up for updating you sooner or later as we obtain new milestones. And we do anticipate to have an investor replace most likely within the February, March, April timeframe on the Global Care Solutions.
We would hope by then to have launched the enterprise in not less than some take a look at markets, some pilots, and we’ll have extra definitive to say on the enterprise and what the enterprise mannequin and the monetary mannequin when it comes to how we’ll earn earnings over time with that.
So we’re enthusiastic about that. We’ve received an excellent crew. I discussed, Tim Peck [ph] — Dr. Tim Peck, who we employed this 12 months on this quarter. He’s working with the [indiscernible] and we’re constructing a crew. I feel we’re as much as worker quantity 4. So we’re making progress and sit up for that.
But because of Ryan and Geoff for his or her questions. And thanks all to your curiosity and assist of Genworth, and we’ll see you subsequent quarter. So, with that, Katie, I’ll flip it again over to you.
Operator
Thank you. Ladies and gents, this concludes Genworth Financial’s Second Quarter Conference Call. Thank you to your participation. At this time, the decision will finish.