Essent rides rising interest rates to profit hike

Bermuda-based mortgage re/insurer Essent Group benefited from favourable interest rates to produce an 18.2% increase in second quarter net income. 

Essent, which also has a Bermuda-based reinsurer, said net income for the second quarter was $203.6 million compared to $172.2 millionin the same period in 2023.

The re/insurer said net insurance written for the second quarter fell 8% to $12.5 billion from $13.5 billion in 2023 while insurance in force rose to $240.7 billion, compared to $238.5 billion as of March 31, 2024 and $235.6 billion as of June 30, 2023.  

Insurance in force as of June 30, 2024 was $240.7 billion, up 8% from $235.6 billion in the second quarter in 2023. 

“We are pleased with our financial results in the second quarter, as our high-quality portfolio and resilience in the housing and labour markets translated to favourable credit performance, and the current rate environment continues to benefit investment income and persistency,” said Mark Casale, chairman and chief executive officer. “The Essent franchise achieved another milestone by closing on our inaugural senior debt offering on July 1. Combined with an amended and extended revolving credit facility, we now have over $1.3 billion in available holding company liquidity.”

Essent said net investment income rose 24% to $56 million from $45 million in the second quarter of 2023. 

Effective July 1, the company entered into an excess of loss transaction with a panel of highly rated third-party reinsurers covering 15% of all eligible policies written by Essent Guaranty in calendar year 2024.

On July 1, also Essent closed two transactions that represent approximately $1 billion in total debt capacity, comprised of $500 million of senior unsecured notes and a $500 million unsecured revolving credit facility.

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.