Helia Group Limited (HLI) Earnings Call Transcript & Summary

Good morning. I am Ian MacDonald, Chairman of the Board of Directors of Genworth Mortgage Insurance Australia Limited. I would like to welcome you to our 2020 Annual General Meeting of Shareholders. It is now 11 a.m., and I have been informed that the necessary quorum of shareholders is present at the meeting, attending by virtual means. I therefore declare the meeting open. Due to the current and rapidly evolving nature of the COVID-19 pandemic, we have adapted this meeting for a virtual AGM to allow us to meet with you today in a way that ensures everyone's safety and well-being. We hope that holding a virtual meeting will assist in curbing the spread of COVID-19, and that participating in this meeting through the webcast strengthens engagement among our shareholders during this time. The notice of meeting dated the 27th of March 2020 has been circulated to members, and I will take the notice of meeting as read. Shareholders were also provided with updated meeting procedures to enable attendance and participation in this meeting by virtual means. These updates were released on ASX, posted on Genworth's website and were also e-mailed to shareholders that have provided their email addresses. The company held its last Annual General Meeting on the 9th of May 2019. You can find my address as Chairman and the CEO's address on our website. There were also a release to the market prior to the commencement of this meeting. Before I proceed with my address and the formal business of the meeting, I would like to introduce my fellow directors who have joined the meeting by audio conference: David Foster, Chairman of the Remuneration and Nominations Committee and the Technology Committee; Gai McGrath, Chairman of the Risk Committee; Andrea Waters, Chairman of the Audit Committee; Duncan West, Chairman of the Capital and Investment Committee; Christine Patton; Stuart Take; and Jerome Upton. Pauline Blight-Johnston, our Chief Executive Officer and Managing Director, is also present at the meeting attending by video conference. Prudence Milne, our General Counsel and Company Secretary, is also present; as is Brady Weissel, Assistant Company Secretary, who is here to assist with the meeting procedures. David Kells, the company's audit partner at KPMG for the 2019 year, is also present at the meeting. Mr. Kells is available via video conference as to questions in relation to the conduct of the audit, the auditor's report and the company's accounting policies and the independence of the auditor. Please be assured that any directors, management and the external auditor that are in the same physical location are appropriately observing social distancing requirements. I will now outline the procedures for today's meeting. In a moment, I will present my address as Chairman, and then I will invite Pauline Blight-Johnston to present the CEO's address. Once those presentations have concluded, I will open the meeting to general questions. There will also be an opportunity to ask specific questions on the financial report, remuneration report and each of the resolutions to be voted on today as we come to those items of business. At the end of general questions, we will then move to the formal business of the meeting, including questions and voting on each of the resolutions to be put to the meeting today. Shareholders attending the meeting over the webcast will be able to ask questions and cast their vote once they are registered for an electronic voting card, which will validate you as shareholder. Even though we are meeting by virtual means, I strongly encourage shareholders to participate in the meeting by submitting their general questions as well as any questions they may have on specific items of business using the online platform. You can submit questions at any time up to and during question time for the item of business to which the question relates. All questions you submit will be placed in the queue, and I will respond to those questions when we reach the relevant part of the meeting. I will now spend some time updating you on the key achievements of the company over the past year. 2019 was a strong year for Genworth, and I will touch on the highlights today. After these introductory remarks, our Chief Executive Officer, Pauline Blight-Johnston will provide further details on the performance of the company last year and for the first quarter of this year, which we announced yesterday, has been impacted by the economic outlook due to the COVID-19 pandemic. Pauline will also comment on Genworth's response to COVID-19 in regard to supporting the well-being of our people and our customers. To begin with, I would like to take a moment to reflect on the purpose of our company and the role that Genworth plays within the Australian financial system and housing sector. Genworth's purpose is to help Australians achieve their dream of owning a home. We do this by providing risk and capital management solutions to our lender customers and working with them, regulators and policymakers to promote a stronger and more sustainable housing market. As the leading Australian lenders' mortgage insurer for more than 50 years, Genworth's portfolio includes 1.3 million policies with over $300 billion worth of underwritten residential mortgages. In 2019, we issued in excess of 66,000 insurance policies that secured homes valued at $26.7 billion. In addition, with our lender customers, last year we helped over 10,000 borrowers who were experiencing financial stress and hardship, bringing the total hardship cases held since 2013 to 66,629. Genworth has commercial relationships with over 100 lender customers across Australia, including major and regional banks, building societies, credit unions and nonbank mortgage originators. As the residential mortgage market and customer and borrower expectations continue to evolve in the face of regulatory, technological and societal changes, we also need to adapt and innovate our product and service offering. Genworth's strategy over the last 3 years has been to redefine and enhance our core business model to reflect these changes and provide greater support to our lender customers and Australian borrowers. The initiatives implemented under our strategic program of work continue, and they are allowing Genworth to better meet customer needs in a dynamic market environment and deliver profitable growth. Moving on now to the highlights of Genworth's 2019 financial performance. At the end of 2019, we maintained a regulatory capital base of $1.66 billion and a coverage ratio of 1.91x the prescribed capital amount on a group basis. The company's cash and investment portfolio had a market value of $3.1 billion, of which 81% continued to be held in cash and fixed interest securities with a rating A minus or better. This included $82.8 million invested in Australian equities and $571.9 million invested in non-Australian dollar income securities. Statutory net profit after tax was up 58.7% to $120.1 million, and underlying net profit after tax was up 3.3% to $97 million. While gross written premium decreased 5.9% to $433.2 million, the prior year's GWP included an excess of loss contract entered into by Genworth's Bermudian insurance entity. Excluding this transaction, GWP increased 17.1% in 2019. Since listing on the Australian Securities Exchange in 2014, we have remained focused on optimizing our capital structure. Over this period, Genworth has returned 100% of after-tax profits by way of ordinary and special dividends to shareholders and implemented other capital management initiatives, including buybacks and capital reductions. In 2019, we pursued various capital management initiatives to bring the company's solvency ratio more in line with the Board's target range of 1.32 to 1.44x the PCA. Last year, we distributed $76.4 million through fully franked ordinary dividends, both interim and final, and $190.2 million through unfranked special dividends, totaling $0.461 per share for the year. We also returned $63.9 million to shareholders through an on-market share buyback. In addition, in 2019, we renewed our $800 million reinsurance program for providing us with further capital flexibility. Overall, in 2019, combined ordinary and special dividends paid out, equates to a yield of 17.7% on a Genworth's share price of $3.65 as at the end of December '19. Further to year-end, we returned $30.9 million through an ordinary franked dividend paid in March 2020. At the end of the first quarter of 2020, Genworth had a capital position of 1.78x PCA on a group basis following the impacts of COVID-19. This still sits comfortably above the top end of the Board's target range of 1.32 to 1.44x and represents surplus capital of $267 million above the top end of the target range. Genworth's solvency ratio, along with the flexibility we have built with our reinsurance programs, positions the business well in this COVID-19 environment. Given the current economic uncertainty and APRA guidance, encouraging insurers to seriously consider deferring decisions on dividends and capital returns until the outlook is clearer, we believe it's sensible to preserve capital at this time to sustain our strong capital position. The Board will make a decision regarding payment of an interim dividend at the time of the company releases its first half '20 results, when more information about the impacts of COVID-19 will be available. Any dividend would be subject to retaining a strong capital buffer and obtaining APRA approval for a reduction in the company's capital base. The Board recognizes that environmental, social and governance matters are critical to achieving business objectives and long-term value for shareholders and other stakeholders. Genworth's commitment to these principles is embedded in the sustainability framework that is founded on 4 pillars: environment, our people, community and marketplace. The company sets out its achievements across these 4 pillars in an annual sustainability report that is aligned with its global -- the global reporting initiative sustainability reporting. In March, we released our third sustainability report, and Pauline will outline the key achievements shortly. However, I would like to note one of those results, specifically relating to the composition of the Board. Genworth has a target of 40% women on board, and we continue to exceed this target. Before I hand over to Pauline, I would like to take this opportunity to officially welcome her to Genworth. Pauline commenced as CEO on the 2nd of March. On the 12th of March, COVID-19 was officially declared a pandemic by the World Health Organization, and Genworth employees were asked to work from home for the foreseeable future. This has been a highly unusual start for a new CEO, and I would like to thank her for the way that she has led the organization during these unprecedented times. I would also like to thank the senior leadership team and all employees to seamlessly transitioning to a new way of operating while continuing to maintain our high standards of service to lender customers. I am confident that Genworth's management team will steer the company successfully through the COVID-19 pandemic in a manner that positions us well in the lead up to economic recovery. These are uncertain times, but our company is robust and well capitalized, and our customer value proposition remains strong. Within the new environment of COVID-19, the Board believes that the company's role in facilitating the Australian dream of home ownership and supporting the strength and stability of the Australian financial system remains critical. Before I close, I would like to acknowledge our former CEO, Georgette Nicholas, and thank her for a 4 years of stellar leadership. Georgette retired at the end of last year and has left the company in very good stead to face a difficult 2020. In addition, I would like to thank my fellow Director, Duncan West, who acted in the CEO position during the transition period until Pauline commenced. I extend my thanks to all directors for their continued commitment and further insights from decades of corporate experience, which is particularly valuable in these uncertain times. Finally, to all our shareholders, thank you for your ongoing support. I will now hand over to Pauline.

Thank you, Ian, and good morning, everyone. I'm Pauline Blight-Johnston, Genworth's Chief Executive Officer and Managing Director. These certainly are unusual times, as Ian mentioned. This was not the start that I anticipated when I joined Genworth. However, these past 2 months have shown me the enormous capability and resilience of the Genworth team and the overriding focus on going above and beyond to service our lender customers and their borrowers. Over the past few months, the federal and state governments and Reserve Bank of Australia have announced stimulus packages to support jobs and businesses through this period of economic uncertainty. Many lender customers have announced supportive initiatives and advised that home loans granted repayment holidays will not be treated as delinquent loans and not reported as in arrears. We welcome and fully support initiatives by governments and lenders to assist borrowers during this time of economic uncertainty. My focus and that of the same leadership team is the well-being of Genworth's people, customers and all the stakeholders with which our business interacts. All of us at Genworth are keen to play our part to help people in need in a financially and socially responsible manner. And we're actively working with the company's over 100 lender customers to assist them and their borrowers during this time. To enable us to respond effectively to this rapidly evolving situation, as part of Genworth's business continuity management framework, I've established a COVID-19 command team to implement our business continuity and contingency plans. The team, which reports to me, is coordinating efforts across all functional areas of our business, to investigate and understand the potential impacts of COVID-19 on the economy, our lender customers, our business, and to ensure we are well equipped to effectively manage the business through the economic recovery. Turning now to last year's company performance. As Ian has said, 2019 was another successful year for Genworth. We paid over $330.5 million to shareholders through a combination of special and ordinary dividends and an on-market share buyback. Our 2019 financial performance demonstrates the strength of Genworth's core business model. The result reflects more high loan-to-value loans being written during 2019. As we saw a recovery in consumer confidence in the housing market across all major capital cities except Perth. In addition, the historically low cash rate, tax cuts, ongoing infrastructure investment and a generally brighter outlook for the resources sector, provided positive momentum into the first quarter of 2020. 2019 statutory net profit after tax was $120.1 million compared with $75.7 million in 2018. And our underlying net profit after tax was $97 million compared with $93.9 million in the prior year. New insurance written increased 20.3% to $26.7 billion, up from $22.2 billion in 2018. As the Chairman noted, gross written premium decreased to $433.2 million as the prior year's figure included an excess of lost customer contract entered into by Genworth's Bermudian insurance entity. Excluding this transaction, gross written premium increased 17.1% in 2019. This result reflects the higher volume growth in traditional lenders mortgage insurance flow business across our lender customers as property prices continue to rebound over the last quarter of 2019, with improved homebuyer confidence and affordability, particularly in Sydney and Melbourne. The 2019 loss ratio was 50.6% compared to 51.9% in 2018. 2019 losses were impacted by reduced cure activity that was offset by increased earned premium from lapsed policy cancellation initiatives. In 2019, we announced that our major customer, Commonwealth Bank of Australia, renewed our supply and service contract for a further 3 years effective 1 January 2020. Since the end of last financial year, we've secured further customer renewals. These include an exclusive LMI relationship with a non-major bank and an extension of our relationship with a mutual lender for the first time on an exclusive basis, both for 3-year periods. Both these contracts were effective from April 2020. Now on to Genworth's results for the first quarter ending 31 March 2020 that we announced yesterday. The business performed well over the quarter prior to the impacts of COVID-19, with solid insurance business growth and improved claims experience, particularly in Western Australia and Queensland. A strong contributing factor to the result was the 18.5% increase in new insurance written from $5.4 billion in the first quarter of 2019 to $6.4 billion in the first quarter of 2020. Gross written premium also increased 32.2% from $86.3 million in the first quarter of 2019 to $114.1 million in the first quarter of 2020. These increases reflected higher growth across Genworth's lender customers due to the increase in property prices in major capital cities, such as Sydney and Melbourne and below interest rates. Net earned premium in the first quarter was up 3.4% to $75.4 million. Our loss ratio was 47.1%, benefiting from a favorable ageing of delinquencies due to rising house prices. The first quarter result was impacted by the impacts of COVID-19 on the economy. On the 26th of March, Genworth withdrew our outlook for the full year financial results due to the uncertainty arising from COVID-19. Over recent months, we have been undertaking scenario analysis of possible future LMI claims outcomes arising from COVID-19 based on a range of economic scenarios. As a result of this work, we determined that the future outlook for LMI claims has materially changed, with claims expected to increase towards the end of 2020. Genworth made allowance for additional COVID-19-related claims with a write-down of $181.8 million of the deferred acquisition costs asset on our balance sheet. This write-down impacted our first quarter results, resulting in a statutory net loss after tax of $125.6 million. Excluding the write-down, underlying NPAT actually increased 8.1% to $24.1 million compared to $22.3 million in the first quarter of 2019. The ultimate impact of COVID-19 on the Australian economy is still at this stage unknown. So whilst we have made allowance for a central scenario estimate of future claims, the ultimate claim costs may prove over time to be materially greater or less than this estimate. Importantly, the company remains in a strong capital position, even after allowing for the DAC write-down and able to withstand volatility in claims outcomes. The impacts of COVID-19 reduced Genworth's regulatory solvency ratio on a level 2 basis from 1.9x to 1.78x the prescribed capital amount. As the Chairman has noted, this still sits comfortably above the Board's target range of 1.32 to 1.44x the PCA, and represents surplus capital of $267 million, above the upper end of the target range. In addition, Genworth capital position is within or above the Board's target range in all economic scenarios that we tested in our analyses, including those significantly worse than our central estimate scenario. Since March, our business has transitioned remarkably well to a new operating environment. Genworth employees have now been working from home for almost 2 months. I've been very impressed with the way our people have transitioned to this new way of working. We are working closely with our lender customers to understand how they're responding to the current circumstances, and to ensure we are appropriately supporting borrowers while prudently managing underwriting risk. We have adapted processes to enable us to manage the increased volumes coming through and it's a testament to the quality of our people and systems that we've continued to meet all customer service levels, particularly given our people are operating remotely and dealing with increased volumes. We've expanded our hardship policy to enable lenders to provide further support to borrowers impacted by COVID-19. The strategic program of work that Genworth has been implementing in the past few years has certainly contributed to our ability to manage the challenges presented by COVID-19. Enhancing our capabilities across the mortgage value chain has enabled us to strengthen our customer partnerships and grow our business. Fostering long-term relationships with exclusive contracts enables us to build industry-leading connectivity with our lender partners. We work very closely with lenders to understand and respond to what they and their borrowers need. This is why product innovation and enhancement continue to be a strategic priority for our business as the home loan market responds to regulatory, market and customer expectation changes. From our new monthly premium product that will allow borrowers more flexibility to our advanced decisioning and borrower support systems, we are committed to helping Australians achieve the dream of home ownership. As our business adapts to a COVID-19 world, we will continue to engage with our customers to provide digitally-focused solutions and the value-add product expertise they have come to expect from Genworth. Our aim is to provide insightful loss management, risk and capital solutions that strengthen our customer partnerships and grow our revenues. Underpinning our strategy is Genworth's sustainability framework that supports our people, the community and the Australian dream of home ownership. We believe that to be a sustainable business, Genworth needs to create a culture of empowerment and innovation for our people. We must make a positive contribution to the communities we are part of, and we need to support our lender customers to help people to purchase and stay in their own homes. In 2019, Genworth assisted over 66,000 Australians to purchase a home, bringing our total number of policies in force to 1.3 million. We also assisted over 10,000 borrowers in hardship. We continue to support community causes close to our hearts. St. Vincent de Paul Society, CREATE Foundation, OzHarvest Limited and Father Chris Riley's Youth Off the Streets. In addition, our employees contributed more than 1,250 volunteer hours to support our community partners. During the year, we continue to work with regulators and policymakers to enhance their understanding of the role that LMI plays in supporting homeownership. We also created LMI education tools to help customers, brokers and borrowers understand LMI, including marketing collateral and the popular It's My Home magazine. An integral component of Genworth's success is a culture that encourages our people to thrive. In 2019, we won a number of employer awards, recognizing our commitment to diversity and inclusion, including the Workplace Gender Equality Agency Employer of Choice for Gender Equality for the 5th consecutive year. Management has set a goal of maintaining female leadership of at least 40% on the senior leadership team and is striving for diversity across all leadership roles. At the end of 2019, 44% of the senior leadership team was female and 34% of all other management roles were filled by females. In closing, Genworth's underlying business and customer value proposition remained fundamentally sound. Genworth entered this crisis with a healthy capital base, leading market position, robust operational processes and an experienced team. Certainly, the COVID-19 pandemic is an unprecedented challenge for the global economy. The stimulus packages and lender initiatives will help to cushion the impact of COVID-19 on Genworth's claims experience in the short term. The level of increased claims we experience would largely be determined by the pace of the assuming economic recovery following the repayment holidays. We're closely watching economic indicators and ensuring we have the necessary financial and capital flexibility to navigate through this period. As we look ahead, we're more focused than ever on supporting our customers. We will continue to respond with appropriate loss mitigation activities to work in tandem with the various stimulus packages, income support and lender initiatives to ensure that the company is able to support lenders and borrowers at this time of need and over the longer term. As I have mentioned, the -- sorry, the company remains well capitalized with a solid balance sheet and a PCA coverage ratio of 1.78x and net tangible assets of $3.28 per share as at 31 March 2020. We have sufficient capital, financial and human resources to manage and grow the business in a wide range of economic outcomes. We will, as always, manage our business prudently and efficiently to ensure we can continue to play our part to help Australians realize the dream of home ownership now and into the future. I would really like to take this opportunity to express my thanks to Genworth's employees for welcoming me into the Genworth family and for supporting each other and importantly, all our customers and borrowers as we transition to this new way of doing business. I thank our customers for their continued support and for the collaborative approach to working with us to support their borrowers. I also express my thanks to shareholders for your continued support and investment in Genworth. Finally, to all of you on the call today, thank you for dialing in. And I hope to be able to meet each of you in person next year. I'll now hand back to Ian for the formal business of the meeting.

Thank you, Pauline. At this time, I would like to give shareholders attending the meeting live through the webcast an opportunity to ask any general questions they may have. As previously mentioned, shareholders who wish to ask a question, please click on the Ask a Question box. Select what your question relates to, type your question and click submit question. You will need to obtain an electronic voting card and validate your shareholding before you can ask a question. To enable all shareholders an opportunity to participate, I ask that shareholders submit 1 question at a time. Once you have submitted a question, if you have a further question, please repeat these steps to submit your further questions. I will now pause briefly for shareholders to submit any general questions they may have.

Chairman, we received a general question prior to the meeting from Josephine Kong, a shareholder. The question is, can you please explain why Genworth's expense ratio has risen year after year?

Thanks, Brady. The expense ratio rose 1% from 34% in 2018 to 35% in 2019. That slight increase is due to rises in our acquisition costs, underwriting expenses and some strategic IT project costs.

Chairman, we have received a general question from [ Warner Era ], a shareholder. The question is, how do you see the future prospects for your company?

Good question. I think I have to look back on how we got to where we are. We came into this year in a very strong position. We've got over 50 years' experience in mortgage insurance, and the company has seen many cycles. So this is another one of the cycles. I'm pleased with the fitness of the company as we are positioned at the moment. I think our strong capital position stands us in very good stead. We've got an experienced Board, which is prudent, and we've got an outstanding leadership team. So I think the future prospects are very strong. I think Pauline referenced quite a few aspects in her address just previously.

Chairman, there are no further general questions at this time.

Okay. Thanks, Brady. There being no further general questions, I'll briefly run through some formalities for voting at this meeting. Shareholders' proxies will be able to cast a vote by using the electronic voting card on the screen. The voting card will remain accessible until the voting is closed. Once voting is closed, all voting cards will automatically be submitted and cannot be changed. Shareholders who were not able to attend the meeting have had the option of casting a direct vote or alternatively, appointing a proxy. As a significant number of our shareholders vote by proxy and direct voting, we have received proxy votes or direct votes in respect of over 84% of our total shares. We consider it appropriate to recognize the votes both of those present today at the meeting through the live webcast and those who have voted by proxy or direct vote. Accordingly, a poll will be called for each resolution. I now declare the poll open. After each resolution has been moved, we will then display the proxy and direct votes that have been cast prior to opening up the meeting to any questions before voting takes place. The results of the poll will be declared and released to the ASX as soon as possible after the meeting has concluded. As stated in the notice of meeting and on the voting form you each received where I, as Chairman, have been appointed as proxy with a discretion as to how to vote, as proxy holder, I intend to vote all such shares in favor of all resolutions. There are 6 resolutions to be voted on today, and an opportunity will be given to shareholders to ask questions about each of the resolutions. The first item of business is the receipt and consideration of the company's annual financial report, director's report and auditor's report for the year ended 31 December 2019. The reports were contained in the 2019 annual report, which was released on ASX and Genworth's website in February and hard copy sent to those shareholders that requested a hard copy of the annual report. I will take those reports as read. There is no vote for this item, but I welcome questions submitted through the Ask a Question box on your screens. Mr. David Kells, our audit partner from KPMG, is available to answer any specific questions you may have about the conduct of the audit. I confirm there have been no questions submitted in writing to the auditor prior to the meeting. I will respond to any questions specifically relating to remuneration when we come to the resolution on the remuneration report. I will now pause briefly for shareholders to submit any questions they may have on this item. There being no questions, we will move to the first resolution. First resolution relates to the company's remuneration report for the financial year ended 31 December 2019. The remuneration report, which forms part of the director's report was released on ASX and Genworth's website and sent to shareholders on request. So I will take the report as read. Further details about the resolution were also contained in the explanatory notes that accompanied the notice of meeting. I remind shareholders that this vote is advisory only and is not binding on the company. However, please be assured the Board does take into consideration the feedback we received from shareholders. Before putting the resolution, I would like to advise shareholders that the company will disregard any votes as stated in the voting exclusion statement related to Resolution 1 as set out in the notice of meeting. The directors unanimously recommend that shareholders vote for the resolution. I now put Resolution 1, and the wording for this resolution appears on your screen, along with the proxy and direct votes received in relation to this resolution. I will now pause briefly for shareholders to ask any questions on this resolution by submitting them through the Ask a Question box.

Chairman, there are no questions for this resolution.

Thank you, Brady. To submit a full vote in respect of all of your shares, please ensure you are in the full vote tab and record your vote by clicking either the for, against or abstain box against Resolution 1 on your electronic voting card. To submit a partial vote, please ensure you are in the partial vote tab. You will then be able to enter the number of shares you would like to vote for the resolution. The total amount of votes you are entitled to vote will be listed under each resolution. If you are a proxy holder and have only directed votes for and/or against, please submit your vote by clicking either the for or against box against Resolution 1. If you're a proxy holder with open votes, you need to click either the for, against or abstain box against Resolution 1 to indicate how you wish to cast any open votes. Where I, as Chairman of the meeting, have been appointed as proxy for a member entitled to vote as detailed in the notice of meeting, I will vote all undirected proxies in favor of all resolutions. I will pause briefly while you cast your vote. [Voting]

Thank you. I'll now move to Resolution 2, relating to the grant of share rights to Genworth's Chief Executive Officer and Managing Director, Pauline Blight-Johnston. Shareholder approval is being sought for all purposes, including for the purposes of ASX listing Rule 10.14 to grant to the company's CEO and Managing Director, Pauline Blight-Johnston, 160,681 share rights in the company under the Genworth Australia Share Rights plan. Subject to shareholder approval, the share rights will be issued to Ms. Blight-Johnston as soon as practicable following the meeting. The grant of share rights under the share rights plan will allow Ms. Blight-Johnston to obtain ordinary shares in the company. Further details about the resolution and the terms and conditions of the grant of share rights were contained in the explanatory notes that accompanied the notice of the meeting. Before putting the resolution, I would like to advise shareholders that the company will disregard any votes as stated in the voting exclusion statement related to Resolution 2 as set out in the notice of meeting. The directors recommend that shareholders vote for the resolution. I now put Resolution 2, and the wording for this resolution appears on your screen along with the proxy and direct votes received in relation to this resolution. I will now pause briefly for shareholders to ask any questions on the resolution by submitting them through the Ask a Question box.

Chairman, there are no questions for this resolution.

Thank you, Brady. The voting instructions are the same as for the previous resolution. Please record your vote by clicking the for, against or abstain box against Resolution 2 on your voting card. [Voting]

I will now move on to Resolution 3, seeking approval for a possible on-market share buyback. Shareholder approval is sought for the company to buy back up to 100 million of its issued ordinary shares in the form of 1 or more on-market share buybacks to be conducted over a period of up to 12 months from the date of this meeting. Despite financial market weakness over the first quarter 2020, Genworth continues to benefit from a strong capital position. As of the 31st of March 2020, the company had excess capital well in excess of the Board's target capital range of 1.32 to 1.44x the prescribed capital amount on a level 2 basis. The company's plans for this excess capital will be considered in light of recent correspondent from a prudential regulation authority, encouraging insurers to limit capital returns at the present time. Shareholders should note that if the Board of the company decides to buy back shares after completion of the current on-market share buyback, it will require the prior written consent of Genworth Financial Inc. under the terms of the shareholder agreement, and it will also need to obtain APRA's approval to a further reduction in capital. Further details about the resolution were contained in the explanatory notes that accompanied the notice of the meeting. The directors recommend that shareholders vote for the resolution. I now put Resolution 3, and the wording for this resolution appears on your screen, along with the proxy and direct votes received in relation to this resolution. I will now pause briefly for shareholders to ask any questions on this resolution by submitting them through the Ask a Question box.

Chairman, we have received a question from shareholder, [ Makako Seto ]. The question is, why is the company proposing a share buyback when it cannot confirm that a dividend will be paid to shareholders this half year?

Thanks, Brady. Quite simply for flexibility. We are saying it's a possible share buyback. We like to have the flexibility of our actions, nothing more than that.

Chairman, there are no further questions for this resolution.

Thank you, Brady. The voting instructions are the same as for the previous resolution. Please record your vote by clicking the for, against or abstain box against Resolution 3 on your electronic voting card. [Voting]

The next 3 resolutions relate to the reelection and the election of directors, each of which will be considered in a separate resolution. I now turn to Resolution 4, the reelection of David Foster as a Director. David was appointed to the Genworth Board on the 30th of May 2016, and as Chairman of the Remuneration and Nominations Committee and the Technology Committee. He has over 25 years financial services experience, specifically in banking, insurance and wealth management. David was previously the Chief Executive Officer of Suncorp Bank and has held various senior executive roles with Suncorp Group. Prior to Suncorp Bank, David held various management roles at Westpac. He is a senior fellow of the Financial Services Institute of Australasia and a graduate of the Australian Institute of Company Directors. David is currently the Chairman of Motorcycle Holdings Limited and a Director of Bendigo and Adelaide Bank Limited and G8 Education Limited. A brief summary of David's experience and qualifications is set out on Page 10 of the notice of meeting. The reelection of David Foster is unanimously recommended by all the other directors of Genworth. I now put Resolution 4, and the wording for this resolution appears on your screen, along with the proxy and direct votes received in relation to this resolution. I will now pause briefly for shareholders to ask any questions on this resolution by submitting them through the Ask a Question box.

Chairman, there are no questions for this resolution.

Thank you, Brady. The voting instructions are the same as for the previous resolution. Please record your vote by clicking the for, against or abstain box against Resolution 4 on your electronic voting card. [Voting]

I now move to Resolution 5, the reelection of Gai McGrath as a Director. Gai was appointed to the Board on the 31st of August 2016, and as the Chairman of the Risk Committee and a member of the Audit Committee, the Technology Committee and the Remuneration and Nominations Committee. Gai has over 24 years of financial service experience and has previously held numerous senior executive positions with the Westpac Group. Prior to the Westpac Group, Gai was General Counsel and Company Secretary of Perpetual Limited and a partner at a Sydney-based law firm. Gai is a graduate of the Australian Institute of Company Directors. Gai is currently a Director of IMB Bank, Toyota Finance Australia Limited, Steadfast Group Limited and HBF Health Limited. A brief summary of Gai's experience and qualification is set out on Page 11 of the notice of meeting. The reelection of Gai McGrath is unanimously recommended by all the other directors of Genworth. I now put Resolution 5, and the wording for this resolution appears on your screen, along with the proxy and direct votes received in relation to this resolution. I will now pause briefly for shareholders to ask any questions on this resolution by submitting them through the Ask a Question box.

Chairman, since the previous resolution, we have received a question on Resolution 4 about the election of David Foster. The question is from Fiona Balzer of the Australian Shareholders' Association. The question is, I note David Foster holds a full workload, 4 ASX directorships and 1 chairmanship. Would he be able to talk to how he has managed to portion his time with the unprecedented demands on directors to respond to COVID-19 impacts?

In response to that, Brady, unfortunately, David can't talk. We haven't the ability for them to join by audio, but I can talk to that. And it's a very good question because the workload of directors has certainly increased with COVID-19. The workload of executives have certainly increased. And we noted from a Genworth point of view that we, as a Board, are meeting at least every 2 weeks. David's attendance record is outstanding. He has never missed a call to -- even ad hoc calls to attend meetings. And his contribution is stellar in all of our meetings. I also know from talking to David that he's got increased workload with the other boards, but he's handing it very, very well. So it is an extra burden, but he can more than cope with it. Returning to Resolution 5. The voting instructions are the same as for the previous resolution. Please record your vote by clicking the for, against or abstain box against Resolution 5 on your voting card. [Voting]

I now move to the final resolution, Resolution 6, the election of Director Andrea Waters. Andrea has 35 years' experience in financial services as an auditor, accountant and nonexecutive director. Andrea was a former partner of KPMG, specializing in financial services audit. She has a deep experience in risk management and in implementing and enhancing audit and governance structures in financial services. Andrea is a fellow of Chartered Accountants Australia & New Zealand and a member and accredited facilitator of the Australian Institute of Company Directors. A brief summary of Andrea's experience and qualifications is set out on Page 11 of the notice of meeting. The election of Andrea Waters is unanimously recommended by all the other directors of Genworth. I now put Resolution 6, and the wording to this resolution appears on your screen along with the proxy and direct votes received in relation to this resolution. I will now pause briefly for shareholders to ask any questions on this resolution by submitting them through the Ask a Question box.

Chairman, there are no questions for this resolution.

Thank you, Brady. The voting instructions are the same as for the previous resolution. Please record your vote by clicking the for, against or abstain box against Resolution 6 on your voting card. [Voting]

Is there any other business pertaining to their shareholding that a member wishes to bring before the meeting? If so, please submit your question through the Ask a Question box.

Chairman, there is no other business.

Thank you, Brady. As there is no other business to be brought before the meeting at this time, I would like to ask shareholders to finalize and submit their electronic voting cards. Poll results will be released to the market via the market announcements platform. And we'll be available on the Genworth website as soon as possible, which is expected to occur later today. Before I close the meeting, I would like to thank everyone who has contributed to holding this meeting in this virtual format. It has been a challenging time for us all, and there has been a huge effort from all involved to ensure the success of this meeting. We'd also like to thank all shareholders for their patience as we have adapted to holding this meeting virtually. I now declare the meeting and poll closed, and thank you for your attendance of the 2020 Annual General Meeting of Genworth Mortgage Insurance Australia Limited. We hope that by holding this meeting virtually, we have provided you an opportunity to participate by asking questions and voting at this meeting [indiscernible].