Essent Q3 profit slips on jump in losses

Mortgage re/insurer Essent Group’s third quarter profit slipped as the company increased its provision for losses. 

Bermuda-based Essent said its net income slipped from $178 million to $176.2 million in the period. 

However, its recorded net income of $927.8 million for the first nine months of the year, up from $812.5 million in the same period in 2023. 

For the quarter, the company’s direct premiums written rose from $270.9 million to $277.8 million while net investment income jumped from $47 million to $57 million. 

However, losses and loss adjustment expenses soared from $10.8 million to $30.666 million. 

The company’s combined ratio deteriorated from 31.7% to 38.7%, which appeared to largely due to the acquisition of Agents National Title and Boston Title in 2023. These companies had a loss ratio of 121%. Excluding the Title companies, Essent’s combined ratio was 31.2%.  

“We are pleased with our third quarter financial results, as we continue to generate high quality earnings,” said Mark A. Casale, chairman and chief executive officer. “Our results continue to benefit from the impact of interest rates on persistency and the growth in our investment portfolio. Our performance for the quarter demonstrates the strength of our operating model in producing strong returns and growing book value per share.”

The company said new insurance written for the third quarter was $12.5 billion and insuance in force rose to $243 billion from $240.7 billion. 

Essent also closed its 10th mortgage insurance-linked note transaction, Radnor Re 2024-1, which provides $363 million of collateralized reinsurance coverage for new insurance written from July 2023 through July 2024.

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