Mortgage insurer Essent net income drops 25%

Mortgage insurer Essent Group’s net income dropped 25.7% to $172.2 million, as rises in premiums and net income were offset by less beneficial treatment of losses than in the same quarter a year earlier.

Bermuda-based Essent said new insurance written for the quarter was $13.5 billion compared to $20.1 billion in the second quarter of 2022. Insurance in force was $231.5 billion compared to $215.9 billion a year earlier.

“We are pleased with our second quarter 2023 financial results, which reflect the high quality of our portfolio and the resilience in housing and employment,” said Mark Casale, chairman and chief executive officer.

“Our strong operational performance continues to demonstrate the earnings power of our business and provide us with attractive levels of excess capital, which we can deploy in the best long-term interest of our shareholders.”

Essent, which also operates a Bermuda reinsurer, said direct premiums written were $249 billion, up from $232.6 billion in the same period a year earlier.

Losses and loss adjustment expenses were $1.26 million compared to a positive gain of $76.2 million a year earlier. Underwriting and operational expenses edged up to $42.1 million from $1.9 million but interest expenses jumped from $2.9 million to $7.4 million.

The combined ratio was 20.4% compared to -16.2% in 2022.

Essent also noted it had closed the purchases of Agents National Title Holding Company and Boston National Holdings for $92.6 million. 

Essent also said it had closed its ninth insurance linked note through its vehicle Radnor Re, raising $281.7 million of collateralised reinsurance coverage for new insurance written from August 2022 and June 2023.

Tags: Essent Mark Casale mortgage insurance reinsurance earnings