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What changed in Enact Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Enact Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+506 added−625 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-29)

Top changes in Enact Holdings, Inc.'s 2024 10-K

506 paragraphs added · 625 removed · 459 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

122 edited+7 added−29 removed193 unchanged
Biggest changeIn addition to our internally focused efforts, we have a number of employee-led externally focused diversity, equity and inclusion initiatives. • We champion civic engagement through paid volunteer time for employees, event sponsorship programs, employee-directed charitable gifts with a 100% company match, and through our commitment to environmental sustainability. • We empower employees to share their unique perspectives by promoting initiatives that increase access to our Senior Leadership Team and encouraging open-door policies.
Biggest changeWe routinely assess talent, engage in deep succession planning at all levels of the organization and provide feedback to our employees through a formal annual performance review process. • Our employee-led council focused on our diverse employee population helps to build an inclusive culture through company-wide events and by educating our employees on the experiences and perspectives of others. • We champion civic engagement through paid volunteer time for employees, event sponsorship programs, employee-directed charitable gifts with a 100% company match, the Enact Foundation, and through our commitment to environmental sustainability. • We empower employees to share their unique perspectives by promoting initiatives that increase access to our Senior Leadership Team and encouraging open-door policies.
Risk Factors—Risks Relating to Our Business—A deterioration in economic conditions, a severe recession or a decline in home prices may adversely affect our loss experience.” Delinquencies that are not cured result in a claim. Our loss mitigation and claims area is led by seasoned personnel who are supported by default tracking and claims processing capabilities within our integrated platform.
Risk Factors—Risks Relating to Our Business—A deterioration in economic conditions, a severe recession or a decline in home prices may adversely affect our loss experience.” Delinquencies that are not cured may result in a claim. Our loss mitigation and claims area is led by seasoned personnel who are supported by default tracking and claims processing capabilities within our integrated platform.
The NAIC has also adopted a guidance document that sets forth twelve principles for effective insurance regulation of cybersecurity risks based on similar regulatory guidance adopted by the Securities Industry and Financial Markets Association and the “Roadmap for Cybersecurity Consumer Protections,” which describes the protections to which the NAIC believes consumers should be entitled from their insurance companies, agents and other businesses concerning the collection and maintenance of consumers’ personal information, as well as what consumers should expect when such information has been involved in a data breach.
The NAIC has also adopted a guidance document that sets forth twelve principles for effective insurance regulation of cybersecurity risks based on similar regulatory guidance adopted by the Securities Industry and Financial Markets Association and the “Roadmap for Cybersecurity Consumer Protections,” which describes the protections to which the NAIC believes consumers should be entitled from their insurance companies, agents and other businesses concerning the collection and maintenance 27 of consumers’ personal information, as well as what consumers should expect when such information has been involved in a data breach.
Credit Risk Transfer Our risk management framework and analytics inform our CRT strategy, which is designed to reduce the loss volatility of our in-force portfolio during stress scenarios by transferring risk from our balance sheet to highly rated counterparties or to investors through collateralized transactions. Our CRT program also provides capital relief under PMIERs and state insurance capital requirements.
Credit Risk Transfer Our risk management framework and analytics inform our CRT strategy, which is designed to reduce the loss volatility of our in-force portfolio during stress scenarios by transferring risk from our balance 12 sheet to highly rated counterparties or to investors through collateralized transactions. Our CRT program also provides capital relief under PMIERs and state insurance capital requirements.
There has been past class action litigation over these FCRA adverse action notices involving the mortgage insurance industry, including court-approved settlements. The Fair Housing Act generally prohibits discrimination in the terms, conditions or privileges in residential real estate-related transactions on the basis of race, color, religion, sex, familial status, or national origin.
There has been class action litigation over these FCRA adverse action notices involving the mortgage insurance industry, including court-approved settlements. The Fair Housing Act generally prohibits discrimination in the terms, conditions or privileges in residential real estate-related transactions on the basis of race, color, religion, sex, familial status or national origin.
Following the financial crisis of 2008, the Basel Committee issued Basel III that established RBC and leverage capital requirements for most United States banking organizations (although banking organizations with less than $10 billion in total assets may now choose to comply with an alternative community bank leverage ratio framework established by the Federal Banking Agencies in 2019).
Following the financial crisis of 2008, the Basel Committee issued Basel III that established RBC and leverage capital requirements for most United States banking organizations (although banking organizations with less than $10 billion in total assets may now choose to comply with 25 an alternative community bank leverage ratio framework established by the Federal Banking Agencies in 2019).
Historically, due to the higher prevalence of Low 6 Down Payment Loans in purchase originations, mortgage insurance utilization has been meaningfully higher for purchase originations than for refinances. Competition Our principal sources of competition are government (federal, state and local) agencies, such as the FHA and the United States Department of Veterans Affairs (“VA”) and other private mortgage insurers.
Historically, due to the higher prevalence of Low Down Payment Loans in purchase originations, mortgage insurance utilization has been meaningfully higher for purchase originations than for refinances. Competition Our principal sources of competition are government (federal, state and local) agencies, such as the FHA and the United States Department of Veterans Affairs (“VA”) and other private mortgage insurers.
Our underwriting staff is dispersed throughout the United States, and we believe this allows us to make prompt, geographically based underwriting determinations across different time zones in a timely manner to best serve our diverse customer base. In addition to our employees, we use domestically based, contract underwriters, as needed, to assist with underwriting capacity and drive efficiency.
Our underwriting staff is dispersed throughout the United States, and we believe this allows us to make prompt, geographically based underwriting determinations across different time zones in a timely manner to best serve our diverse customer base. In addition to our employees, we use contract underwriters, as needed, to assist with underwriting capacity and drive efficiency.
We have a rigorous approach to writing new insurance risk based on decades of loan-level data and experience in the mortgage insurance industry. We believe our balance sheet is well capitalized to manage through macroeconomic uncertainty and maintain compliance with private mortgage insurer eligibility requirements (“PMIERs”) and state regulatory standards of compliance.
We have a rigorous approach to writing new insurance risk based on decades of loan-level data and experience in the mortgage insurance industry. Our balance sheet is well capitalized to manage through macroeconomic uncertainty and maintain compliance with private mortgage insurer eligibility requirements (“PMIERs”) and state regulatory standards of compliance.
Regulation of Mortgage Origination Private mortgage insurers are also indirectly impacted by federal law and regulation affecting mortgage originators and lenders, purchasers of mortgage loans and governmental insurers. Among the most significant of these laws and regulations are the Dodd-Frank Act QM and the ability-to-repay (“ATR”) Requirement and the qualified residential mortgage (“QRM”) securitization risk retention provisions.
Regulation of Mortgage Origination Private mortgage insurers are also indirectly impacted by federal laws and regulations affecting mortgage originators and lenders, purchasers of mortgage loans and governmental insurers. Among the most significant of these laws and regulations are the Dodd-Frank Act QM and the ability-to-repay (“ATR”) requirement and the qualified residential mortgage (“QRM”) securitization risk retention provisions.
All loans must pass through our eligibility rules engine to screen out those outside of our guidelines. At present, our underwriting guidelines are largely consistent with those of the GSEs. Many of our customers use the GSEs’ automated loan underwriting systems, Desktop Underwriter and Loan Product Advisor, for making credit determinations.
All loans must pass through our eligibility rules engine to screen out those outside of our guidelines. 11 At present, our underwriting guidelines are largely consistent with those of the GSEs. Many of our customers use the GSEs’ automated loan underwriting systems, Desktop Underwriter and Loan Product Advisor, for making credit determinations.
State insurance laws and regulations also usually require the licensing of insurers and agents, and the approval of policy forms and rates. In addition, states may require actuarial justification of rates on the basis of the insurer’s loss experience, expenses and future projections. Enact Re is subject to a similar Bermudian regulatory regime.
State insurance laws and regulations also usually require the licensing of 17 insurers and agents, and the approval of policy forms and rates. In addition, states may require actuarial justification of rates on the basis of the insurer’s loss experience, expenses and future projections. Enact Re is subject to a similar Bermudian regulatory regime.
In addition, on February 25, 2021, the FHFA announced that borrowers with a mortgage backed by the GSEs who were in an active COVID-19 forbearance plan as of February 28, 2021, could request up to two additional forbearance extensions for a maximum of 18 months of total forbearance relief.
In addition, on February 25, 2021, the FHFA announced that borrowers with a mortgage backed by the GSEs who were 24 in an active COVID-19 forbearance plan as of February 28, 2021, could request up to two additional forbearance extensions for a maximum of 18 months of total forbearance relief.
We compete on pricing, underwriting guidelines, customer relationships, service levels, policy terms, loss mitigation practices, perceived financial strength (including comparative credit ratings), reputation, strength of management, product features and effective use and ease of technology. There are currently six active mortgage insurers, including us.
We compete on pricing, underwriting guidelines, customer relationships, service levels, policy terms, loss mitigation practices, perceived financial strength (including comparative credit ratings), reputation, strength of management, product features and effective use and ease of technology. There are currently six active private mortgage insurers, including us.
Our remaining pool exposures are significantly seasoned and represent only 0.1% of total risk in-force (“RIF”). Our primary insurance portfolio is diversified through time. The distribution of our exposure by book year is influenced by market size opportunities, our commercial strategies and the persistency of our in-force policies.
Our remaining pool exposures are significantly seasoned and represent only 0.1% of total risk in-force (“RIF”). 8 Our primary insurance portfolio is diversified through time. The distribution of our exposure by book year is influenced by market size opportunities, our commercial strategies and the persistency of our in-force policies.
We deem a reduction in the claim amount paid relative to the amount requested in the claim notice to be a curtailment. 15 When reviewing loan and servicing files in connection with the delinquency or claims process, we may also decide to rescind coverage of the underlying mortgages or deny payment of claims.
We deem a reduction in the claim amount paid relative to the amount requested in the claim notice to be a curtailment. When reviewing loan and servicing files in connection with the delinquency or claims process, we may also decide to rescind coverage of the underlying mortgages or deny payment of claims.
Effective December 31, 2015, each GSE adopted the original PMIERs, which set forth operational and financial requirements that mortgage insurers must meet in order to remain eligible. On September 27, 2018, the GSEs issued revisions to the PMIERs, which became effective March 31, 2019.
Effective December 31, 2015, 21 each GSE adopted the original PMIERs, which set forth operational and financial requirements that mortgage insurers must meet in order to remain eligible. On September 27, 2018, the GSEs issued revisions to PMIERs, which became effective March 31, 2019.
The NYDFS amended its cybersecurity regulation effective November 1, 2023, which, 28 along with subsequent guidance, requires all banks, insurance companies, and other financial services institutions and licensees regulated by the NYDFS, including several of our subsidiaries, to establish a cybersecurity program.
The NYDFS amended its cybersecurity regulation effective November 1, 2023, which, along with subsequent guidance, requires all banks, insurance companies, and other financial services institutions and licensees regulated by the NYDFS, including several of our subsidiaries, to establish a cybersecurity program.
Pool policies contain coverage percentages and provisions limiting the insurer’s obligation to pay claims until a threshold amount is reached (known as a “deductible”) or capping the insurer’s 8 potential aggregate liability for claims payments (known as a “stop loss”) or a combination of both provisions.
Pool policies contain coverage percentages and provisions limiting the insurer’s obligation to pay claims until a threshold amount is reached (known as a “deductible”) or capping the insurer’s potential aggregate liability for claims payments (known as a “stop loss”) or a combination of both provisions.
With the COVID-19 pandemic, we experienced unprecedented use of forbearance plans nationwide to assist borrowers including the ability to extend forbearance beyond 12 months. Historically, the use of forbearance plans was limited to 12 months and used for a natural disaster that impacted a region of the country.
With the COVID-19 pandemic, we experienced unprecedented use of forbearance plans nationwide to assist borrowers including the ability to extend forbearance beyond 12 months. Historically, the use of forbearance plans was limited to 12 months and primarily used for a natural disaster that impacted a region of the country.
Certain states have implemented certain requirements of the GLB Act, including North Carolina through the Consumer and Customer Information Privacy Act. Many states have enacted privacy and data security laws that impose compliance obligations beyond those imposed by the GLB Act, including obligations to protect sensitive personal information.
Certain states have implemented certain requirements of the GLB Act, including North Carolina through the Consumer and Customer Information Privacy Act. 26 Many states have enacted privacy and data security laws that impose compliance obligations beyond those imposed by the GLB Act, including obligations to protect sensitive personal information.
The NAIC also provides standardized insurance industry accounting and reporting guidance through the NAIC Accounting Manual. However, model insurance laws and regulations are only effective when adopted by the states, and NAIC Statutory Accounting Principles (“SAP”) may be superseded by individual state laws, 20 regulations and permitted practices.
The NAIC also provides standardized insurance industry accounting and reporting guidance through the NAIC Accounting Manual. However, model insurance laws and regulations are only effective when adopted by the states, and NAIC Statutory Accounting Principles (“SAP”) may be superseded by individual state laws, regulations and permitted practices.
To the extent that other 26 government agencies guaranteeing residential mortgage loans may adopt definitions of a QM that are more favorable to lenders and mortgage holders than the CFPB QM Rule, our mortgage insurance business could also be negatively impacted.
To the extent that other government agencies guaranteeing residential mortgage loans may adopt definitions of a QM that are more favorable to lenders and mortgage holders than the CFPB QM Rule, our mortgage insurance business could also be negatively impacted.
Generally, state insurance laws and regulations require that all transactions between an insurer and an affiliate be fair and reasonable, and that the insurer’s statutory surplus following such transaction be reasonable in relation to its outstanding liabilities and adequate to its financial needs.
Generally, state insurance laws and regulations require that all transactions between an insurer and an affiliate be fair and reasonable, and that the insurer’s statutory surplus following such transaction be reasonable in relation to its outstanding liabilities and adequate for its financial needs.
Such credit enhancement can be satisfied if a loan is insured by a GSE-qualified insurer, the mortgage seller retains at least a 10% participation in the loan, or the seller agrees to repurchase or replace the loan in the event of a default.
Such credit enhancement can be satisfied if a loan is insured by a GSE-qualified insurer, the mortgage seller retains at least a 10% participation in the loan, or the seller 5 agrees to repurchase or replace the loan in the event of a default.
We also cannot predict whether other regulatory initiatives will be adopted and what impact, if any, such initiatives, if adopted as laws, may have on our business, results of operations and financial condition. Group Capital Requirements .
We also cannot predict whether other regulatory initiatives will be adopted and what 20 impact, if any, such initiatives, if adopted as laws, may have on our business, results of operations and financial condition. Group Capital Requirements .
However, approval by the NCDOI is required for contingency reserve releases when loss ratios exceed 35%. The establishment of the statutory 22 contingency reserve is funded by premiums that would otherwise generate net earnings that would be reflected in policyholder surplus.
However, approval by the NCDOI is required for contingency reserve releases when loss ratios exceed 35%. The establishment of the statutory contingency reserve is funded by premiums that would otherwise generate net earnings that would be reflected in policyholder surplus.
The Federal Trade Commission, the DOJ, the New York State Department of Financial 27 Services (“NYDFS”), the SEC and the NAIC have undertaken various studies, reports and actions regarding privacy and data security for entities under their respective supervision.
The Federal Trade Commission, the DOJ, the New York State Department of Financial Services (“NYDFS”), the SEC and the NAIC have undertaken various studies, reports and actions regarding privacy and data security for entities under their respective supervision.
They include quality control requirements that are 23 designed to ensure that approved insurers have a strong internal risk management infrastructure and senior management oversight. During 2020 and 2021, the GSEs issued several amendments to PMIERs.
They include quality control requirements that are designed to ensure that approved insurers have a strong internal risk management infrastructure and senior management oversight. During 2020 and 2021, the GSEs issued several amendments to PMIERs.
The PMIERs include financial requirements for mortgage insurers under which a mortgage insurer’s “Available Assets” (generally only the most liquid assets of an insurer) must meet or exceed “Minimum Required Assets” (which are based on an insurer’s RIF and are calculated from tables of factors with several risk dimensions and are subject to a floor amount) and otherwise generally establish when a mortgage insurer is qualified to issue coverage that will be acceptable to the respective GSE for acquisition of high LTV mortgages.
PMIERs includes financial requirements for mortgage insurers under which a mortgage insurer’s “Available Assets” (generally only the most liquid assets of an insurer) must meet or exceed “Minimum Required Assets” (which are based on an insurer’s RIF and are calculated from tables of factors with several risk dimensions and are subject to a floor amount) and otherwise generally establish when a mortgage insurer is qualified to issue coverage that will be acceptable to the respective GSE for acquisition of high LTV mortgages.
Mortgage insurance policies from government agencies are also generally non-cancellable, meaning that borrowers are obligated to pay for coverage through the life of their loan, whereas policies from private mortgage insurers are cancellable in certain circumstances as provided by the Homeowners Protection Act (“HOPA”), and under GSE guidelines when the loan-to-value (“LTV”) ratio of an underlying mortgage falls below 80%.
Mortgage insurance policies from government agencies are also generally non-cancellable, meaning that borrowers are obligated to pay for coverage through the life of their loan, 6 whereas policies from private mortgage insurers are cancellable in certain circumstances as provided by the Homeowners Protection Act of 1998 (“HOPA”), and under GSE guidelines when the loan-to-value (“LTV”) ratio of an underlying mortgage falls below 80%.
Our guidelines require borrowers to have a verified capacity and willingness to support their obligation and a well-supported valuation of the collateral. Our underwriting guidelines incorporate credit eligibility requirements that, among other things, limit our coverage to mortgages that meet our thresholds with respect to borrower FICO scores, maximum LTVs, documentation requirements and maximum Debt-to-Income (“DTI”) Ratio.
Our guidelines require borrowers to have a verified capacity and willingness to support their obligation and a well-supported valuation of the collateral. Our underwriting guidelines incorporate credit eligibility requirements that, among other things, limit our coverage to mortgages that meet our thresholds with respect to borrower FICO scores, maximum LTVs, documentation requirements and maximum Debt-to-Income (“DTI”) Ratios.
In addition, the PMIERs require private mortgage insurers to obtain the prior consent of the GSEs before taking certain actions, which may include entering into various intercompany agreements and commuting or reinsuring risk, among others. As of December 31, 2023, we met the PMIERs financial and operational requirements and currently hold capital in excess of the financial requirements.
In addition, PMIERs require private mortgage insurers to obtain the prior consent of the GSEs before taking certain actions, which may include entering into various intercompany agreements and commuting or reinsuring risk, among others. As of December 31, 2024, we met the PMIERs financial and operational requirements and currently hold capital in excess of the financial requirements.
Information Technology We develop and invest in technology in order to drive operational excellence, ensure a superior customer experience and support our overall business objectives. Our business heavily relies upon information technology and a number of critical aspects are highly automated. We accept insurance applications, issue approvals, process claims and reconcile premium remittance through electronic submission.
Information Technology We develop and invest in technology in order to drive operational excellence, promote a superior customer experience and support our overall business objectives. Our business heavily relies upon information technology and a number of critical aspects are highly automated. We accept insurance applications, issue approvals, process claims and reconcile premium remittance through electronic submission.
For the years ended December 31, 2023 and 2022, approximately 70% and 71%, respectively, of our NIW by loan count went through our delegated underwriting services. Pricing Pricing is highly competitive in the mortgage insurance industry, with industry participants competing for market share, customer relationships and overall value.
For the years ended December 31, 2024 and 2023, approximately 71% and 70%, respectively, of our NIW by loan count went through our delegated underwriting services. Pricing Pricing is highly competitive in the mortgage insurance industry, with industry participants competing for market share, customer relationships and overall value.
Most jurisdictions also now require a person seeking to acquire control of an insurer licensed but not domiciled in that jurisdiction to make a filing prior to completing an acquisition if the acquirer and its affiliates and the target insurer and its affiliates have specified market shares in the same lines of insurance in that jurisdiction.
Most jurisdictions also require a person seeking to acquire control of an insurer licensed but not domiciled in that jurisdiction to make a filing prior to completing an acquisition if the acquirer and its affiliates and the target insurer and its affiliates have 18 specified market shares in the same lines of insurance in that jurisdiction.
Our primary exposures from legacy books originated prior to 2009 continue to resolve in an orderly fashion and represented 2% of both our primary IIF and primary RIF as of December 31, 2023. We measure the credit characteristics of our portfolio as represented in the original commitment for insurance.
Our primary exposures from legacy books originated prior to 2009 continue to resolve in an orderly fashion and represented 2% of both our primary IIF and primary RIF as of December 31, 2024. We measure the credit characteristics of our portfolio as represented in the original commitment for insurance.
GSEs, Portfolio Lenders, Reinsurers and Other Capital Markets Participants We have also experienced competition in recent years from various participants in the mortgage finance industry including the GSEs, portfolio lenders, reinsurers and other participants in the capital markets. We compete with these participants primarily based on pricing, policy terms and perceived financial strength.
GSEs, Portfolio Lenders, Reinsurers and Other Capital Markets Participants We have also experienced competition from various participants in the mortgage finance industry including the GSEs, portfolio lenders, reinsurers and other participants in the capital markets. We compete with these participants primarily based on pricing, policy terms and perceived financial strength.
The information found on our website is not incorporated by reference into this report or in any other report or document we submit to the SEC, and any references to our website are intended to be inactive textual references only. 29
The information found on our website is not incorporated by reference into this report or in any other report or document we submit to the SEC, and any references to our website are intended to be inactive textual references only. 28
The total investment expenses paid to Genworth were $5.7 million and $5.5 million for the years ended December 31, 2023 and 2022, respectively. See Note 11 to our audited consolidated financial statements for further information. The investment portfolio of EHI is directed by a separate management-level EHI Investment Committee with a third-party investment manager.
The total investment expenses paid to Genworth were $7.1 million and $5.7 million for the years ended December 31, 2024 and 2023, respectively. See Note 11 to our audited consolidated financial statements for further information. The investment portfolio of EHI is directed by a separate management-level EHI Investment Committee with a third-party investment manager.
Mortgage insurers and their customers are subject to the possible sanctions of this law, which may be enforced by the CFPB, state insurance departments, state attorneys general and other enforcement authorities. HOPA provides for the automatic termination, or cancellation upon a borrower’s request, of the borrower’s obligation to pay for private mortgage insurance upon satisfaction of certain conditions.
Mortgage insurers and their customers are subject to the potential sanctions of this 23 law, which may be enforced by the CFPB, state insurance departments, state attorneys general and other enforcement authorities. HOPA provides for the automatic termination, or cancellation upon a borrower’s request, of the borrower’s obligation to pay for private mortgage insurance upon satisfaction of certain conditions.
Our largest Metropolitan Statistical Area (“MSA”) or Metro Division (“MD”) is the Phoenix, AZ, MSA, which represents 3% of primary RIF. 9 Customers Our long-standing industry presence has enabled us to build active customer relationships with over 1,700 mortgage lenders across the United States.
Our largest Metropolitan Statistical Area (“MSA”) or Metro Division (“MD”) is the Phoenix, AZ, MSA, which represents 3% of primary RIF. Customers Our long-standing industry presence has enabled us to build active customer relationships with over 1,600 mortgage lenders across the United States.
In 2013, the US federal banking regulators confirmed the role of mortgage insurance as a component of prudential bank regulation for high loan to value mortgages. More recently, in July of 2023, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency proposed for comment the Basel III Endgame rule.
In 2013, the U.S. federal banking regulators confirmed the role of mortgage insurance as a component of prudential bank regulation for high loan to value mortgages. More recently, in July of 2023, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency proposed for comment the Basel III Endgame rule.
According to the earnings reports of the GSEs, the GSEs held or guaranteed approximately $7.7 trillion as of September 30, 2023, or around 55%, of total United States 1-4 family residential mortgage debt according to most recent data from the Federal Reserve.
According to the earnings reports of the GSEs, the GSEs held or guaranteed approximately $7.8 trillion as of September 30, 2024, or around 55%, of total United States 1-4 family residential mortgage debt according to most recent data from the Federal Reserve.
Our portfolio is diverse and representative of the United States origination market. We actively monitor our portfolio for concentrations at the state, metropolitan statistical area and metropolitan division level in addition to economic and performance trends in these markets. As of December 31, 2023, our largest state concentration was in California, which represented 13% of primary RIF.
Our portfolio is diverse and representative of the United States origination market. We actively monitor our portfolio for concentrations at the state, metropolitan statistical area and metropolitan division level in addition to economic and performance trends in these markets. As of December 31, 2024, our largest state concentration was in California, which represented 12% of primary RIF.
Some customers prefer to assume underwriting responsibility because it is more efficient within their loan origination process, and they are comfortable attesting that the data submitted is true and correct when making our insurance decision. We regularly perform quality assurance reviews on a statistically significant sample of delegated loans to assess compliance with our guidelines.
Some customers prefer to assume underwriting responsibility because it is more efficient within their loan origination process, and they are comfortable attesting that the data they submit to us is true and correct when we make our insurance decision. We regularly perform quality assurance reviews on a statistically significant sample of delegated loans to assess compliance with our guidelines.
We have a large and diverse customer base and maintain enduring relationships across the mortgage origination market, including with national banks, non-bank mortgage lenders, local mortgage bankers, community banks and credit unions. In 2023, we provided new insurance coverage to over 1,700 customers.
We have a large and diverse customer base and maintain enduring relationships across the mortgage origination market, including with national banks, non-bank mortgage lenders, local mortgage bankers, community banks and credit unions. In 2024, we provided new insurance coverage to over 1,600 customers.
Sales and Marketing Our sales and marketing efforts are designed to help us establish and maintain in-depth, quality customer relationships. We distribute our mortgage insurance products through a dedicated sales force located throughout the United States, our home-based in-house sales representatives and a digital marketing program designed to expand our reach beyond our sales force.
Sales and Marketing Our sales and marketing efforts are designed to help us establish and maintain in-depth, quality customer relationships. We distribute our mortgage insurance products through a dedicated sales force located throughout the United States, our inside sales representatives and a digital marketing program designed to expand our reach beyond our sales force.
Our office building also houses an employee fitness center providing equipment, virtual classes, and massage therapy options on-site. • We offer a multitude of professional development and career enrichment courses, including in the areas of leadership, professional skills, and industry-specific matters, as well as a mentor program and an extensive training program for future senior leaders.
Our office building also houses an employee fitness center providing equipment, virtual classes, and massage therapy options on-site. 16 • We offer a multitude of professional development and career enrichment opportunities, including in the areas of leadership, professional skills, and industry-specific matters, as well as a mentor program and bespoke training for future senior leaders.
Any delays in foreclosure, including foreclosure moratoriums imposed by state and local governments and the GSEs, such as those due to COVID-19, could cause our losses to increase as expenses accrue for longer periods or if the value of foreclosed homes decline during such foreclosure delays.
Any delays in foreclosure, including foreclosure moratoriums imposed by state and local governments and the GSEs, could cause our losses to increase as expenses accrue for longer periods or if the value of foreclosed homes decline during such foreclosure delays.
We adjust our underwriting, pricing and risk selection strategies on a regular basis to ensure that our products remain competitive and consistent with our risk and profitability objectives. 11 Quality Assurance We have an independent quality assurance function that conducts pre- and post-closing underwriting reviews.
We adjust our underwriting, pricing and risk selection strategies on a regular basis so that our products remain competitive and consistent with our risk and profitability objectives. Quality Assurance We have an independent quality assurance function that conducts pre- and post-closing underwriting reviews.
Our CRT program is a material component of our strategy, and we believe it helps to protect future business performance and stockholder capital under stress scenarios by transferring risk from our balance sheet to highly rated counterparties or to investors through collateralized transactions.
Our CRT program is a material component of our strategy, and we believe it helps to protect future business performance and stockholder capital under stress scenarios by transferring risk from our balance sheet to highly rated counterparties or to investors through collateralized transactions. Our Corporate Information Enact Holdings, Inc.
This deferral of premiums into the contingency reserve limits our mortgage insurance subsidiaries’ ability to pay dividends to stockholders until those contingency reserves are released back into surplus. Our mortgage insurance subsidiaries’ statutory contingency reserve was approximately $3,960 million and $3,551 million as of December 31, 2023 and 2022, respectively.
This deferral of premiums into the contingency reserve limits our mortgage insurance subsidiaries’ ability to pay dividends to stockholders until those contingency reserves are released back into surplus. Our mortgage insurance subsidiaries’ statutory contingency reserve was approximately $4,336 million and $3,960 million as of December 31, 2024 and 2023, respectively.
No customer accounted for more than 10% of our total revenues and no other customer accounted for more than 10% of NIW for the years ended December 31, 2022 or 2021. Our top five customers generated 33% of our NIW in 2023.
No other customer accounted for 10% or more of total revenues or NIW for the years ended December 31, 2024 or 2023. No customer accounted for more than 10% of our total revenues in 2022 and no other customer accounted for more than 10% of NIW in 2022. Our top five customers generated 34% of our NIW in 2024.
Premiums are generally calculated as a percentage of the original principal balance and may be paid as follows: • Monthly, where premiums are paid on a monthly basis over the life of the policy; • Single, where the entire premium is paid upfront at the time the mortgage loan is originated; • Annually, where premiums are paid annually in advance for the subsequent 12 months; or • Split, where an initial lump sum premium is paid upfront at the time the mortgage is originated along with subsequent monthly payments.
In either case, the payment of premium to us is generally the responsibility of the insured. 7 Premiums are generally calculated as a percentage of the original principal balance and may be paid as follows: • Monthly, where premiums are paid on a monthly basis over the life of the policy; • Single, where the entire premium is paid upfront at the time the mortgage loan is originated; • Annually, where premiums are paid annually in advance for the subsequent 12 months; or • Split, where an initial lump sum premium is paid upfront at the time the mortgage is originated along with subsequent monthly payments.
The weighted average LTV of our IIF as of December 31, 2023 was 93% and the weighted average LTV of our NIW was 93% in 2023 and 92% in 2022. The credit profile of our portfolio as represented by FICO score remains strong.
The weighted average LTV of our IIF as of December 31, 2024 was 93% and the weighted average LTV of our NIW was 93% in both 2024 and 2023. The credit profile of our portfolio as represented by FICO score remains strong.
We value the voice of our employees and use a best-in-class third party approach to gather employee feedback. • We celebrate our talent by showcasing employee achievements and expertise in industry publications, at events and conferences, and on social media. Enact was recognized as an award winner by external organizations on five occasions throughout 2023.
We value the voice of our employees and use a best-in-class third party approach to gather employee feedback. • We celebrate our talent by showcasing employee achievements and expertise in industry and local publications, at events and conferences, and through our online presence. Enact was recognized as an award winner by external organizations on five occasions throughout 2024.
Finally, although their presence is a fraction of what it was in the past, there are products designed to eliminate the need for private mortgage insurance, such as “simultaneous seconds,” which combine a first lien loan with a second lien loan in order to meet the 80% LTV threshold required for sale to the GSEs without certain credit protections. 7 Our Products and Services In general, there are two types of private mortgage insurance: primary and pool.
Finally, although their presence is a fraction of what it was in the past, there are products designed to eliminate the need for private mortgage insurance, such as “simultaneous seconds,” which combine a first lien loan with a second lien loan in order to meet the 80% LTV threshold required for sale to the GSEs without certain credit protections.
Enact Re’s investments are in compliance with Bermudian law. 21 Capital and Surplus Requirements Insurance regulators have the discretionary authority, in connection with maintaining the licensing of our insurance subsidiaries, to limit or restrict insurers from issuing new policies, or to take other actions, if, in the regulators’ judgment, the insurer is not maintaining a sufficient amount of surplus or reserves, or is in a hazardous financial condition.
Capital and Surplus Requirements Insurance regulators have discretionary authority, in connection with the licensing of our insurance subsidiaries, to limit or restrict insurers from issuing new policies, or to take other actions, if, in the regulators’ judgment, the insurer is not maintaining a sufficient amount of surplus or reserves, or is in a hazardous financial condition.
We believe our insurance subsidiaries’ investments are in compliance with these state insurance laws and regulations or are subject to any applicable waivers.
We believe our insurance subsidiaries’ investments are in compliance with these state insurance laws and regulations or are subject to any applicable waivers. Enact Re’s investments are in compliance with Bermudian law.
According to Inside Mortgage Finance , for the first three quarters of 2023, the FHA had a 32% share, and the VA a 22% share, of the mortgage insurance market. Our competition with government agencies is principally on the basis of price and underwriting guidelines.
According to Inside Mortgage Finance , for the first three quarters of 2024, the FHA had a 34% share, and the VA a 23% share, of the mortgage insurance market. Our competition with government agencies is principally on the basis of price and underwriting guidelines.
Mortgage origination and servicing transactions are subject to compliance with various state and federal laws, including the Real Estate Settlement Procedures Act of 1974 (“RESPA”), HOPA, Fair Credit Reporting Act (“FCRA”), the Fair Housing Act, the Truth In Lending Act, the Gramm-Leach-Bliley Act of 1999 (the “GLB Act”), the Dodd-Frank Act and others, including those discussed in this section.
Mortgage origination and servicing transactions are subject to compliance with various state and federal laws, including but not limited to the Real Estate Settlement Procedures Act of 1974 (“RESPA”), HOPA, Fair Credit Reporting Act (“FCRA”), the Fair Housing Act, the Truth In Lending Act, the Gramm-Leach-Bliley Act of 1999 (the “GLB Act”) and the Dodd-Frank Act.
Generally, a borrower with a higher FICO score has a lower likelihood of claim than one with a lower FICO score. The weighted average FICO score of our IIF as of December 31, 2023 was 744 and the weighted average FICO score of our NIW was 749 in 2023 and 748 in 2022.
Generally, a borrower with a higher FICO score has a lower likelihood of claim than one with a lower FICO score. The weighted average FICO score of our IIF as of December 31, 2024 was 745 and the weighted average FICO score of our NIW was 751 in 2024 and 749 in 2023.
For the full years ended December 31, 2023, 2022 and 2021 we generated new insurance written (“NIW”) of $53.1 billion, $66.5 billion and $97.0 billion, respectively. Net income was $666 million, $704 million and $547 million in 2023, 2022 and 2021, respectively. Adjusted operating income was $676 million, $708 million and $551 million for 2023, 2022 and 2021, respectively.
For the full years ended December 31, 2024, 2023 and 2022 we generated new insurance written (“NIW”) of $51.0 billion, $53.1 billion and $66.5 billion, respectively. Net income was $688 million, $666 million and $704 million in 2024, 2023 and 2022, respectively. Adjusted operating income was $718 million, $676 million and $708 million for 2024, 2023 and 2022, respectively.
Our traditional reinsurance program utilizes excess-of-loss (“XOL”) and quota share insurance coverage. Our XOL reinsurance transactions generally cover a subset of loans in a given book year where typically both the attachment and detachment points of the ceded risk tier are within the PMIERs capital requirements at inception, providing both loss volatility protection and PMIERs capital credit.
Our XOL reinsurance transactions generally cover a subset of loans in a given book year where typically both the attachment and detachment points of the ceded risk tier are within the PMIERs capital requirements at inception, providing both loss volatility protection and PMIERs capital credit.
In December 2020, the NAIC adopted amendments to the Holding Company System Model Act and Regulation. The amendments adopt a Group Capital Calculation Template and Instructions (“GCC Template and Instructions”) as well as an annual filing requirement for the GCC. The amendments were adopted by Virginia, Genworth’s insurance holding company group’s lead state, in 2022.
In December 2020, the NAIC adopted a Group Capital Calculation Template and Instructions, and it amended the Holding Company System Model Act and Regulation to implement an annual GCC filing requirement. The amendments were adopted by Virginia, Genworth’s insurance holding company group’s lead state, in 2022.
Our model is used to assess the performance of new business and our in-force portfolio under expected and stress scenarios. The results of these analyses inform our risk appetite, credit policy, pricing and targeted risk selection strategies. In addition, the results of these stress tests and our desire to reduce loss volatility inform our CRT strategy.
Our model is used to assess the performance of new business and our in-force portfolio under expected and stress scenarios. The results of these analyses inform our risk appetite, credit policy, pricing and targeted risk selection strategies.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Investment Portfolio.” Our board-approved investment policy utilizes defined investment guidelines such as, but not limited to, asset sector, single issuer concentration and credit ratings to ensure compliance with risk management limits, regulatory requirements and applicable laws. Further, the policy seeks to restrict assets correlated with the residential mortgage market.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Investment Portfolio.” Our board-approved investment policy utilizes defined investment guidelines such as, but not limited to, asset sector, single issuer concentration and credit ratings to maintain compliance with risk management limits, regulatory requirements and applicable laws.
As of December 31, 2023, we had estimated available assets of $5,006 million against $3,119 million net required assets under PMIERs compared to available assets of $5,206 million against $3,156 million net required assets as of December 31, 2022.
As of December 31, 2024, we had estimated available assets of $5,095 million against $3,043 million net required assets under PMIERs compared to available assets of $5,006 million against $3,119 million net required assets as of December 31, 2023.
None of our employees are represented by a union or subject to a collective servicing agreement and management believes that our relationship with our employees is good. 17 Some of our key areas of focus include: • Our compensation package, including salary, incentive bonus and long-term incentives, aligns employee and stockholder interests, as well as rewards our employees for serving all of our current and future customers. • In addition to a competitive compensation program, we offer our employees benefits such as life and health insurance, paid time off, paid parental leave, childcare subsidies, retirement savings plans, financial planning services, an Employee Assistance Program and a broad fitness reimbursement program to support physical and mental health.
Some of our key areas of focus include: • Our compensation package, including salary, incentive bonus and long-term incentives, aligns employee and stockholder interests, as well as rewards our employees for serving all our current and future customers. • In addition to a competitive compensation program, we offer our employees benefits such as life and health insurance, paid time off, paid parental leave, childcare subsidies, retirement savings plans, financial planning services, an Employee Assistance Program and a broad fitness reimbursement program to support physical and mental health.
As of December 31, 2023, the fair value of our investment portfolio was $5.3 billion of fixed maturity assets, of which 98% was rated as investment grade. We also had an additional $616 million of cash and cash equivalents as of December 31, 2023.
As of December 31, 2024, the fair value of our investment portfolio was $5.6 billion of fixed maturity assets, of which 99% was rated as investment grade. We also had an additional $599 million of cash and cash equivalents as of December 31, 2024.
As of December 31, 2023, we had 465 full-time employees, all of whom work in the United States. Our employee population is made up of 54% women and 28% people of color. Of our employees, 50% work in our Raleigh, North Carolina office and the remaining 50% are in the field, predominantly working in sales and underwriting.
As of December 31, 2024, we had 421 full-time employees, all of whom work in the United States. Our employee population is made up of 52% women and 29% people of color. Of our employees, 51% work in our Raleigh, North Carolina office and the remaining 49% are in the field, predominantly working in sales and underwriting.
The number of delinquencies may not correlate directly with the number of claims received because the rate at which delinquencies are cured is influenced by borrowers’ financial resources and circumstances, as well as regional economic differences.
Claim activity is not evenly spread across the coverage period of loans we insure. The number of delinquencies may not correlate directly with the number of claims received because the rate at which delinquencies are cured is influenced by borrowers’ financial resources and circumstances, as well as regional economic differences.
The sufficiency ratio as of December 31, 2023, was 161% or $1,887 million above the published PMIERs requirements, compared to 165% or $2,050 million above the published PMIERs requirements as of December 31, 2022.
The sufficiency ratio as of December 31, 2024, was 167% or $2,052 million above the PMIERs requirements, compared to 161% or $1,887 million above the PMIERs requirements as of December 31, 2023.
To be eligible for purchase by a GSE, a Low Down Payment Loan must comply with the coverage percentages established by that particular GSE. For loans not sold to the GSEs, the customer determines its desired coverage percentage.
Customers who purchase our primary mortgage insurance select a specific coverage level for each insured loan. To be eligible for purchase by a GSE, a Low Down Payment Loan must comply with the coverage percentages established by that particular GSE. For loans not sold to the GSEs, the customer determines its desired coverage percentage.
Investment Portfolio The investment portfolios of our insurance subsidiaries are directed by the Enact Investment Committee, a management-level committee, with Genworth serving as the investment manager. Under the terms of our investment management agreement, the Company is charged an investment management fee by Genworth.
Management Discussion and Analysis of Financial Condition and Results of Operations - Financial Strength Ratings.” Investment Portfolio The investment portfolios of our insurance subsidiaries are directed by the Enact Investment Committee, a management-level committee, with Genworth serving as the investment manager. Under 15 the terms of our investment management agreement, the Company is charged an investment management fee by Genworth.
Our Bermuda domiciled insurer, Enact Re, is subject to Bermuda law and is subject to regulation by the Bermuda Monetary Authority (“BMA”). 18 The primary purpose of the U.S. and Bermudian insurance laws and regulations regulating our insurance business is to protect our insureds, not our stockholders.
Our insurance products and business also are affected by federal, state and local laws, including tax laws. Our Bermuda domiciled insurer, Enact Re, is subject to Bermuda law and is subject to regulation by the Bermuda Monetary Authority (“BMA”). The primary purpose of the U.S. and Bermudian insurance laws and regulations regulating our insurance business is to protect our insureds.
Certain transactions may not be entered into unless the applicable regulator is given 30 days’ prior notification and does not disapprove the transaction during such 30-day period. 19 State insurance laws and regulations also require that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance regulator an “enterprise risk report” that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole.
State insurance laws and regulations also require that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance regulator an “enterprise risk report” that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole.
The state insurance laws and regulations of general applicability, along with certain additional state insurance laws and regulations that are applicable specifically to mortgage guaranty insurers, are described below.
Applicable state insurance laws and regulations, along with certain additional state insurance laws and regulations specific to mortgage guaranty insurers, are described below.
With a vast database of established individual contacts, the breadth and depth of relationships not only serves as a differentiator for our mortgage insurance platform but also enables us to form strategic partnerships with other mortgage service providers seeking to expand their distribution reach.
The breadth and depth of relationships across all areas of our customers’ operations serves as a differentiator for our mortgage insurance platform and 9 also enables us to form strategic partnerships with other mortgage service providers seeking to expand their distribution reach.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs one or more of the alternatives described above, or new alternatives that enter the market, are chosen over private mortgage insurance, our revenues could be adversely impacted. The loss of business in general or the specific loss of more profitable business could have a material adverse effect on our business, results of operations and financial condition.
Biggest changeThe loss of business in general or the specific loss of more profitable business could have a material adverse effect on our business, results of operations and financial condition. Additionally, we compete with the FHA and the VA, as well as certain local-and state-level housing finance agencies. Separately, the GSEs compete with us through certain of their risk-sharing insurance programs.
The models may prove to be less predictive than we expect for a variety of reasons, including economic conditions that develop differently than we forecast, unique conditions for which we do not have good historical comparators, unexpected economic and unemployment conditions that arise, changes in the law or in the PMIERs, issues arising in the construction, implementation, interpretation or use of the models or other programs, the use of inaccurate assumptions or use of short-term financial metrics that do not reveal long-term trends.
The models may prove to be less predictive than we expect for a variety of reasons, including economic conditions that develop differently than we forecast, unique conditions for which we do not have good historical comparators, unexpected economic and unemployment conditions that arise, changes in the law or in PMIERs, issues arising in the construction, implementation, interpretation or use of the models or other programs, the use of inaccurate assumptions or use of short-term financial metrics that do not reveal long-term trends.
Past or future misconduct by our employees or employees of our vendors or suppliers could result in violations of laws by us, regulatory sanctions against us and/or serious reputational, legal or financial harm to our business, and the precautions we employ to prevent and detect this activity may not be effective in all cases.
Past or future misconduct by our employees, vendors or suppliers could result in violations of laws by us, regulatory sanctions against us and/or serious reputational, legal or financial harm to our business, and the precautions we employ to prevent and detect this activity may not be effective in all cases.
Once we accept a customer into our delegated underwriting program, we generally insure a loan originated by that customer without validating the accuracy of the data submitted by the customer, investigating the loan file for fraud, or confirming that the customer followed our pre-established guidelines for delegated underwriting.
Once we accept a customer into our delegated underwriting program, we generally insure a loan originated by that customer without validating the accuracy of the data submitted by the customer, investigating the loan file for fraud, or confirming that the customer followed our pre-established delegated underwriting guidelines.
In addition, the use by the private mortgage insurance industry of risk-based pricing systems that establish premium rates based on more attributes than previously considered may result in increased state and/or federal scrutiny of premium rates.
In addition, the use of risk-based pricing systems by the private mortgage insurance industry that establish premium rates based on more attributes than previously considered may result in increased state and/or federal scrutiny of premium rates.
In addition to the general regulatory risks that are described under “—Our business is extensively regulated and changes in regulation may reduce our profitability and limit our growth,” we are also affected by various additional regulations, particularly those that relate to our mortgage insurance operations.
In addition to the general regulatory risks described under “—Our business is extensively regulated and changes in regulation may reduce our profitability and limit our growth,” we are also affected by various additional regulations, particularly those that relate to our mortgage insurance operations.
While we have succession plans and long-term compensation plans, including retention programs, designed to retain our employees, our succession plans may not operate effectively, and our compensation plans cannot guarantee that the services of our employees will continue to be available to us. We rely upon third-party vendors who may be unable or unwilling to meet their obligations to us.
While we have succession plans and long-term compensation plans, including retention programs, designed to retain our employees, our succession plans may not operate effectively, and our compensation plans cannot guarantee that the services of our employees will continue to be available. We rely upon third-party vendors who may be unable or unwilling to meet their obligations to us.
We cannot predict with certainty the cost of maintaining and improving our platform, but failure to make necessary improvements and any significant shortfall in any technology enhancements or negative variance in the timeline in which system enhancements are delivered could have an adverse effect on our business, results of operations and financial condition.
We cannot predict with certainty the cost of maintaining and improving our platform, but failure to make necessary improvements and any significant shortfall in technology enhancements or negative variance in the timeline in which system enhancements are delivered could have an adverse effect on our business, results of operations and financial condition.
As a consequence, we depend on the ability of our subsidiaries to pay dividends and make other payments and distributions to us in order to meet our obligations. • Our business could be adversely impacted from deficiencies in our disclosure controls and procedures or internal control over financial reporting. • We may suffer losses in connection with litigation, regulatory proceedings or other actions. • If we are unable to attract, on-board, retain and motivate qualified employees or senior management, our business, results of operations and financial condition may be adversely impacted. • We rely upon third-party vendors who may be unable or unwilling to meet their obligations to us. • Our computer systems may fail or be compromised, and unanticipated problems could materially adversely impact our disaster recovery systems and business continuity plans, which could damage our reputation, impair our ability to conduct business effectively and materially adversely affect our business, results of operations and financial condition. • Risks related to emerging and changing technology, including artificial intelligence, could impact our results of operations or financial condition. • The occurrence of natural or man-made disasters or public health emergencies, including pandemics and disasters caused or exacerbated by climate change, could materially adversely affect our business, results of operations and financial condition. • Our amended and restated certificate of incorporation contains exclusive forum provisions, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees. • No assurance can be given that we will be able to return capital to our shareholders via dividends or share repurchases in the future at current levels or at all. 31 Risks Relating to Our Business If we are unable to continue to meet the requirements mandated by PMIERs, or any additional restrictions which may be imposed on us by the GSEs, we may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.
As a consequence, we depend on the ability of our subsidiaries to pay dividends and make other payments and distributions to us in order to meet our obligations. • Our business could be adversely impacted from deficiencies in our disclosure controls and procedures or internal control over financial reporting. • We may suffer losses in connection with litigation, regulatory proceedings or other actions. • If we are unable to attract, on-board, retain and motivate qualified employees or senior management, our business, results of operations and financial condition may be adversely impacted. • We rely upon third-party vendors who may be unable or unwilling to meet their obligations to us. • Our computer systems may fail or be compromised, and unanticipated problems could materially adversely impact our disaster recovery systems and business continuity plans, which could damage our reputation, impair our ability to conduct business effectively and materially adversely affect our business, results of operations and financial condition. • Risks related to emerging and changing technology, including artificial intelligence, could impact our results of operations or financial condition. • The occurrence of natural or man-made disasters or public health emergencies, including pandemics and disasters caused or exacerbated by climate change, could materially adversely affect our business, results of operations and financial condition. • Our amended and restated certificate of incorporation contains exclusive forum provisions, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees. • No assurance can be given that we will be able to return capital to our shareholders via dividends or share repurchases in the future at current levels or at all. 30 Risks Relating to Our Business If we are unable to continue to meet the requirements mandated by PMIERs, or any additional restrictions which may be imposed on us by the GSEs, we may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.
In any particular year, statutory surplus amounts, statutory contingency reserve amounts, and the RTC ratio may increase or decrease depending on a variety of factors, most of which are outside of our control, including, but not limited to, the following: • the amount of statutory income or losses generated by our insurance subsidiaries (which itself is sensitive to equity market and credit market conditions); • the amount of insurance we onboard; • the amount of additional capital our insurance subsidiaries must hold to support business growth; • changes in statutory accounting or reserve requirements applicable to our insurance subsidiaries; • our ability to access capital markets to provide reserve and surplus relief; • changes in equity market levels; • the value of certain fixed-income and equity securities in our investment portfolio; • changes in the credit ratings of investments held in our portfolio; • the value of certain derivative instruments; 50 • changes in interest rates; • credit market volatility; and • changes to the maximum permissible RTC ratio.
In any particular year, statutory surplus amounts, statutory contingency reserve amounts, and the RTC ratio may increase or decrease depending on a variety of factors, most of which are outside of our control, including, but not limited to, the following: • the amount of statutory income or losses generated by our insurance subsidiaries (which itself is sensitive to equity market and credit market conditions); • the amount of insurance we onboard; • the amount of additional capital our insurance subsidiaries must hold to support business growth; • changes in statutory accounting or reserve requirements applicable to our insurance subsidiaries; • our ability to access capital markets to provide reserve and surplus relief; • changes in equity market levels; • the value of certain fixed-income and equity securities in our investment portfolio; • changes in the credit ratings of investments held in our portfolio; • the value of certain derivative instruments; • changes in interest rates; • credit market volatility; and • changes to the maximum permissible RTC ratio.
See “— Genworth’s continued ownership of at least 80% of our common stock may limit our ability to raise additional capital by issuing common stock to third parties.” 62 As a result, no assurance can be given that we will be able to continue to pay dividends to our shareholders, repurchase our common stock, or return capital through other means, in the future or that the level of any future return of capital will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect the market price of our common stock.
See “—Genworth’s continued ownership of at least 80% of our common stock may limit our ability to raise additional capital by issuing common stock to third parties.” As a result, no assurance can be given that we will be able to continue to pay dividends to our shareholders, repurchase our common stock, or return capital through other means, in the future or that the level of any future return of capital will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect the market price of our common stock.
If we are unable to continue to meet the requirements mandated by PMIERs, or any additional restrictions which may be imposed on us by the GSEs, whether because the GSEs amend them or the GSEs’ 32 interpretation of the financial requirements requires us to hold amounts of capital that are higher than we have planned or otherwise, we may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.
If we are unable to continue to meet the requirements mandated by PMIERs, or any additional restrictions which may be imposed on us by the GSEs, whether because the GSEs amend them or the GSEs’ interpretation of the financial requirements requires us to hold amounts of capital that are higher than planned or otherwise, we may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.
Risks Relating to Taxation • Changes in tax laws could have a material adverse effect on our business, cash flows, results of operations or financial condition. • We are jointly and severally liable for any U.S. federal income taxes owed by the Genworth Consolidated Group for taxable periods in which we are a member of the group. • If we leave the Genworth Consolidated Group, we may be required to potentially pay more income tax in the future.
Risks Relating to Taxation • Changes in tax laws could have a material adverse effect on our business, cash flows, results of operations or financial condition. • We are jointly and severally liable for any U.S. federal income taxes owed by the Genworth Consolidated Group for taxable periods in which we are a member of the group. • If we leave the Genworth Consolidated Group, we may be required to pay more income tax in the future.
Factors that could lead to a decrease in the volume of Low Down Payment Loan originations include, but are not limited to: • an increase in home mortgage interest rates; • limitations on the tax benefits of home ownership and mortgage interest; • implementation of more rigorous mortgage lending regulation, such as under the Dodd-Frank Act; • a decline in economic conditions generally, or in conditions in regional and local economies; • events outside of our control, including natural and man-made disasters and pandemics adversely affecting housing markets and home buying; • the level of consumer confidence, which may be adversely affected by economic instability, war or terrorist events; 46 • an increase in the price of homes relative to income levels; • a lack of housing supply at lower home prices; • adverse population trends, including lower homeownership rates; • high rates of home price appreciation, which for refinancings affect whether refinanced loans have LTV ratios that require mortgage insurance; and • changes in government housing policy encouraging loans to FTHBs.
Factors that could lead to a decrease in the volume of Low Down Payment Loan originations include, but are not limited to: • an increase in home mortgage interest rates; 42 • limitations on the tax benefits of home ownership and mortgage interest; • implementation of more rigorous mortgage lending regulation, such as under the Dodd-Frank Act; • a decline in economic conditions generally, or in conditions in regional and local economies; • events outside of our control, including natural and man-made disasters and pandemics adversely affecting housing markets and home buying; • the level of consumer confidence, which may be adversely affected by economic instability, war or terrorist events; • an increase in the price of homes relative to income levels; • a lack of housing supply at lower home prices; • adverse population trends, including lower homeownership rates; • high rates of home price appreciation, which for refinancings affect whether refinanced loans have LTV ratios that require mortgage insurance; and • changes in government housing policy encouraging loans to FTHBs.
Failure to comply with applicable regulations or to obtain or maintain appropriate authorizations or exemptions under any applicable laws could result in restrictions on our ability to conduct business or engage in activities regulated in one or more jurisdictions in which we operate and could subject us to fines, injunctions and other sanctions that could have a material adverse effect on our business, results of operations and financial condition.
Failure to comply with applicable regulations or to obtain or maintain appropriate authorizations or exemptions 44 under any applicable laws could result in restrictions on our ability to conduct business or engage in activities regulated in one or more jurisdictions in which we operate and could subject us to fines, injunctions and other sanctions that could have a material adverse effect on our business, results of operations and financial condition.
See “Business—Credit Risk Transfer.” The availability and cost of CRT transactions may be impacted by conditions beyond our control, such as general market conditions, changes in regulation, higher rates of unemployment or a significant negative impact on the United States housing market. In the future, we may be unable to obtain new transactions on acceptable terms or at all.
See “Business—Credit Risk Transfer.” The availability and cost of CRT transactions may be impacted by conditions beyond our control, such as general market conditions, changes in regulation, higher rates of unemployment or a significant 39 negative impact on the United States housing market. In the future, we may be unable to obtain new transactions on acceptable terms or at all.
A natural or man-made disaster or a pandemic/public health emergency could also disrupt public and private infrastructure, including communications and financial services, any of which could disrupt our normal business operations, and could adversely affect the value of the assets in our investment portfolio if it affects companies’ ability to pay principal or interest on their securities or the value of the underlying collateral of structured securities.
A natural or man-made disaster or a public health emergency could also disrupt public and private infrastructure, including communications and financial services, any of which could disrupt our normal business operations, and could adversely affect the value of the assets in our investment portfolio if it affects companies’ ability to pay principal or interest on their securities or the value of the underlying collateral of structured securities.
The GSEs may modify or change their interpretation of terms they require us to include in our mortgage insurance coverage for loans purchased by them, requiring us to modify our terms of coverage or operational procedures to remain an approved insurer, and such changes could have a material adverse impact on our business, results of operations and financial condition.
The GSEs may modify or change their interpretation of terms they require us to include in our mortgage insurance coverage for loans purchased by them, requiring us to modify our terms of coverage or operational procedures to remain an approved insurer, and such changes could have a material adverse impact on our business, results of operations and financial 31 condition.
In assigning financial strength ratings, we believe the rating agencies consider several factors, including but not limited to, the adequacy of the mortgage insurer’s capital to withstand high claim scenarios, a mortgage insurer’s historical and projected operating 43 performance, a mortgage insurer’s enterprise risk management framework, parent company financial strength, business outlook, competitive position, management and corporate strategy.
In assigning financial strength ratings, we believe the rating agencies consider several factors, including but not limited to, the adequacy of the mortgage insurer’s capital to withstand high claim scenarios, a mortgage insurer’s historical and projected operating performance, a mortgage insurer’s enterprise risk management framework, parent company financial strength, business outlook, competitive position, management and corporate strategy.
An adverse change in our RTC ratio or our ability to meet other minimum regulatory requirements could cause rating agencies to downgrade our financial strength ratings, which could have an adverse impact on our ability to write and retain business and could cause regulators to take regulatory or supervisory actions with respect to our business, all of which could have a material adverse effect on our results of operations, financial condition and business.
An adverse change in our RTC ratio or our ability to meet other minimum regulatory requirements could cause rating agencies to downgrade our financial strength ratings, which could have an adverse 46 impact on our ability to write and retain business and could cause regulators to take regulatory or supervisory actions with respect to our business, all of which could have a material adverse effect on our results of operations, financial condition and business.
Disagreements regarding the rights and obligations of Genworth or certain 53 of Genworth’s other subsidiaries or us under each of these agreements or any renegotiation of their terms could create conflicts of interest for certain of these directors and officers, as well as actual disputes that may be resolved in a manner unfavorable to us and our other stockholders.
Disagreements regarding the rights and obligations of Genworth or certain of Genworth’s other subsidiaries or us under each of these agreements or any renegotiation of their terms could create conflicts of interest for certain of these directors and officers, as well as actual disputes that may be resolved in a manner unfavorable to us and our other stockholders.
Genworth or certain of Genworth’s other subsidiaries currently perform or support many important corporate functions for our operations, including but not limited to, investment management, information technology services and certain administrative services (such as finance, human resources and employee benefit administration). Our Shared Services Agreement with Genworth provides us continued access to certain of these services.
Genworth or certain other of Genworth’s subsidiaries currently perform or support many corporate functions for our operations, including, but not limited to, investment management, information technology services and certain administrative services (such as finance, human resources and employee benefit administration). Our Shared Services Agreement with Genworth provides us continued access to certain of these services.
Income from our investment portfolio is a source of cash to support our operations and make claims payments. If we or our investment managers improperly structure our investments to meet those future liabilities or we have unexpected losses, including losses resulting from the forced liquidation of investments before their maturity, we may be unable to meet those obligations.
Income from our investment portfolio is a source of cash to support our operations and make claims payments. If we or our investment managers improperly structure our investments to meet those future 40 liabilities or we have unexpected losses, including losses resulting from the forced liquidation of investments before their maturity, we may be unable to meet those obligations.
High delinquency rates could also strain the resources of servicers, reducing their ability to undertake mitigation efforts that would help limit losses. Furthermore, we have delegated to the GSEs, which have in turn delegated to most of their servicers, the authority to accept modifications, short sales and deeds-in-lieu of foreclosure on loans we insure.
High 41 delinquency rates could also strain the resources of servicers, reducing their ability to undertake mitigation efforts that would help limit losses. Furthermore, we have delegated to the GSEs, which have in turn delegated to most of their servicers, the authority to accept modifications, short sales and deeds-in-lieu of foreclosure on loans we insure.
Genworth, however, will be responsible for any taxes for which we are jointly and severally liable solely by reason of filing a combined, consolidated or unitary return with Genworth under the Tax Allocation Agreement. If we leave the Genworth Consolidated Group, we may be required to potentially pay more income tax in the future.
Genworth, however, will be responsible for any taxes for which we are jointly and severally liable solely by reason of filing a combined, consolidated or unitary return with Genworth under the Tax Allocation Agreement. If we leave the Genworth Consolidated Group, we may be required to pay more income tax in the future.
However, our risk management programs may not fully control or mitigate all the risks we face or anticipate all potential material negative events. 40 Many of our methods for managing certain financial risks (e.g., credit, market and insurance risks) are based on observed historical market behaviors and/or historical, statistically based models.
However, our risk management programs may not fully control or mitigate all the risks we face or anticipate all potential material negative events. Many of our methods for managing certain financial risks (e.g., credit, market and insurance risks) are based on observed historical market behaviors and/or historical, statistically based models.
If a court were to find the exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations.
If a court were to find the exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur 56 additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations.
The establishment of loss reserves is subject to inherent uncertainty and requires significant judgment and numerous assumptions by management. Changes in assumptions or deviations of actual experience for assumptions can have material impacts on our loss reserves and net income (loss). Thus, our loss estimates may vary widely from quarter to quarter.
The establishment of loss reserves is subject to inherent uncertainty and requires significant judgment and numerous assumptions by management. Changes in assumptions or deviations of actual experience from assumptions can have material impacts on our loss reserves and net income (loss). Thus, our loss estimates may vary widely from quarter to quarter.
Our customers place insurance with us directly on loans they originate and indirectly through purchases of loans that already have our mortgage insurance coverage. Our relationships with our customers may influence both the amount of business they do with us directly and their willingness to continue to approve us as a mortgage insurance provider for loans that they purchase.
Our customers place insurance with us directly on loans they originate and indirectly through purchases of loans that already have our mortgage insurance coverage. Our relationships with our customers may influence both the amount of direct business they do with us and their willingness to continue to approve us as a mortgage insurance provider for loans that they purchase.
Our subsidiaries may not be able to, or may not be permitted by regulators to, pay dividends or make distributions to enable us to meet our obligations. Each subsidiary is a distinct legal entity, which may be subject to legal and 57 contractual restrictions that may also limit our ability to obtain cash from our subsidiaries.
Our subsidiaries may not be able to, or may not be permitted by regulators to, pay dividends or make distributions to enable us to meet our obligations. Each subsidiary is a distinct legal entity, which may be subject to legal and contractual restrictions that may also limit our ability to obtain cash from our subsidiaries.
However, any assigned financial strength rating that is below our peers, a downgrade in our financial strength ratings, or the announcement of a potential downgrade could hinder our competitiveness in the marketplace and could have a material adverse impact on our business, results of operations and financial condition in many ways, including: (i) increasing scrutiny of us and our financial condition by the GSEs and/or our customers, potentially resulting in a decrease in the amount of our NIW or, in the most severe case, the cessation of writing new business altogether, or limiting the business opportunities we are presented with and (ii) requiring us to reduce the premiums that we charge for mortgage insurance or introduce new products and services in order to remain competitive.
However, any assigned financial strength rating that is below our peers, a downgrade in our financial strength ratings, or the announcement of a potential downgrade could hinder our competitiveness in the marketplace and have a material adverse impact on our business in many ways, including: (i) increasing scrutiny of us and our financial condition by the GSEs and/or our customers, potentially resulting in a decrease in the amount of our NIW or, in the most severe case, the cessation of writing new business altogether, or limiting the business opportunities we are presented with and (ii) requiring us to reduce the premiums that we charge for mortgage insurance or introduce new products and services in order to remain competitive.
Poor implementation of new technologies, including artificial intelligence, by us or our third-party service providers, could subject us to additional risks we do not understand or cannot adequately mitigate, which could have an impact our results of operations and financial condition.
Poor implementation of new technologies, including artificial intelligence, by us or our third-party service providers, could subject us to additional risks we do not understand or cannot adequately mitigate, which could have an impact on our results of operations and financial condition.
As a result, the actual claim payments we make may materially differ from the amount of our corresponding loss reserves. • If the models used in our business are inaccurate or there are differences and/or variability in loss development compared to our model estimates and actuarial assumptions, it could have a material adverse effect on our business, results of operations and financial condition. • Competition within the mortgage insurance industry could result in the loss of market share, loss of customers, lower premiums, wider credit guidelines and other changes that could have a material adverse effect on our business, results of operations and financial condition. • Changes to the charters or practices of the GSEs, including actions or decisions to decrease or discontinue the use of mortgage insurance, could adversely affect our business, results of operations and financial condition. • The amount of mortgage insurance we write could decline significantly if alternatives to private mortgage insurance are used or lower coverage levels of mortgage insurance are selected. • Changes in the composition of our business or undue concentration by customer or geographic region may adversely affect us by increasing our exposure to loss of business or adverse performance of a small segment of our portfolio. • Our risk management programs may not be effective in identifying or adequate in controlling or mitigating the risks we face. • Interest rates and changes in rates, including changes in monetary policy to combat inflation, could materially adversely affect our business, results of operations and financial condition. • We may be unable to maintain or increase the capital needed in our business in a timely manner, on anticipated terms or at all, including through improved business performance, CRT transactions, securities offerings or otherwise, in each case as and when required. • CRT transactions may not be available, affordable or adequate to protect us against losses. • Adverse rating agency actions may result in a loss of business and adversely affect our business, results of operations and financial condition. • If we are unable to effectively manage risks in our investment portfolio, it could adversely affect our business, results of operations and financial condition. • If servicers fail to adhere to appropriate servicing standards or experience disruptions to their businesses, our losses could increase. • Our delegated underwriting program may subject our mortgage insurance business to unanticipated claims. • The premiums we agree to charge for our mortgage insurance coverage may not adequately compensate us for the risks and costs associated with the coverage we provide. • A decrease in the volume of Low Down Payment Loan originations or an increase in the volume of mortgage insurance cancellations could result in a decline in our revenue. • We collect, process, store, share, disclose and use consumer information and other data, and an actual or perceived failure to protect such information and data or respect users’ privacy could damage our reputation and brand and adversely affect our business, results of operations and financial condition. 30 Risks Relating to Regulatory Matters • Our business is extensively regulated and changes in regulation may reduce our profitability and limit our growth. • Inability to maintain sufficient regulatory capital could result in restrictions or prohibitions on our doing business or impact our financial strength ratings which could have a material adverse impact on our business, results of operations and financial condition. • Changes in regulations that adversely affect the insurance markets in which we operate could affect our operations significantly and could reduce the demand for our products.
As a result, the actual claim payments we make may materially differ from the amount of our corresponding loss reserves. • If the models used in our business are inaccurate or there are differences and/or variability in loss development compared to our model estimates and actuarial assumptions, it could have a material adverse effect on our business, results of operations and financial condition. • Competition within the mortgage insurance industry could result in the loss of market share, loss of customers, lower premiums, wider credit guidelines and other changes that could have a material adverse effect on our business, results of operations and financial condition. • Changes to the charters or practices of the GSEs, including actions or decisions to decrease or discontinue the use of mortgage insurance, could adversely affect our business, results of operations and financial condition. • The amount of mortgage insurance we write could decline significantly if alternatives to private mortgage insurance are used or lower coverage levels of mortgage insurance are selected. • Changes in the composition of our business or undue concentration by customer or geographic region may adversely affect us by increasing our exposure to loss of business or adverse performance of a small segment of our portfolio. • Our risk management programs may not be effective in identifying or adequate in controlling or mitigating the risks we face. • Interest rates and changes in rates could materially adversely affect our business, results of operations and financial condition. • We may be unable to maintain or increase the capital needed in our business in a timely manner, on anticipated terms or at all, including through improved business performance, CRT transactions, securities offerings or otherwise, in each case as and when required. • CRT transactions may not be available, affordable or adequate to protect us against losses. • Adverse rating agency actions may result in a loss of business and adversely affect our business, results of operations and financial condition. • If we are unable to effectively manage risks in our investment portfolio, it could adversely affect our business, results of operations and financial condition. • If servicers fail to adhere to appropriate servicing standards or experience disruptions to their businesses, our losses could increase. • Our delegated underwriting program may subject our mortgage insurance business to unanticipated claims. • The premiums we agree to charge for our mortgage insurance coverage may not adequately compensate us for the risks and costs associated with the coverage we provide. • A decrease in the volume of Low Down Payment Loan originations or an increase in the volume of mortgage insurance cancellations could result in a decline in our revenue. • We collect, process, store, share, disclose and use consumer information and other data, and an actual or perceived failure to protect such information and data or respect users’ privacy could damage our reputation and brand and adversely affect our business, results of operations and financial condition. 29 Risks Relating to Regulatory Matters • Our business is extensively regulated and changes in regulation may reduce our profitability and limit our growth. • Inability to maintain sufficient regulatory capital could result in restrictions or prohibitions on our doing business or impact our financial strength ratings, which could have a material adverse impact on our business, results of operations and financial condition. • Changes in regulations that adversely affect the insurance markets in which we operate could affect our operations significantly and could reduce the demand for our products.
This mandate 38 builds upon the goals set in recent years for the GSEs to increase the role of private capital by experimenting with different forms of transactions and structures. We participate in these CRT programs developed by Fannie Mae and Freddie Mac.
This mandate builds upon the goals set in recent years for the GSEs to increase the role of private capital by experimenting with different forms of transactions and structures. We participate in these CRT programs developed by Fannie Mae and Freddie Mac.
If we cannot offer new technologies or data analytics solutions as quickly as our competitors, or if our competitors develop more cost-effective technologies, 60 data analytics solutions or other product offerings, we could experience a material adverse effect on our operating results, customer relationships, growth and compliance programs.
If we cannot offer new technologies or data analytics solutions as quickly as our competitors, or if our competitors develop more cost-effective technologies, data analytics solutions or other product offerings, we could experience a material adverse effect on our operating results, customer relationships, growth and compliance programs.
Accordingly, for any taxable periods for which we are included in the Genworth Consolidated Group for U.S. federal income tax purposes, we could be liable in the event that any income tax liability was incurred but was not discharged by Genworth or any other member of the group.
For any taxable periods for which we are included in the Genworth Consolidated Group for U.S. federal income tax purposes, we could be liable in the event that any income tax liability was incurred but was not discharged by Genworth or any other member of the group.
Also, customer concentration may adversely affect our financial condition if a significant customer chooses to increase its use of other mortgage insurers, merges with a competitor or exits the mortgage finance business, chooses alternatives to mortgage insurance, or experiences a decrease in their business.
Also, customer concentration may adversely affect our financial condition if a significant customer chooses to increase its use of other mortgage insurers, merges with a competitor or exits the mortgage finance business, chooses alternatives to mortgage insurance, or experiences a decrease in its business.
Lower primary persistency rates can result in reduced IIF and earned premiums, which could have a significant adverse impact on our results of operations. In addition, interest rate fluctuations could also have an adverse effect on the results of our investment portfolio.
Lower 38 primary persistency rates can result in reduced IIF and earned premiums, which could have a significant adverse impact on our results of operations. In addition, interest rate fluctuations could also have an adverse effect on the results of our investment portfolio.
Risks Relating to Our Continuing Relationship with Genworth • Genworth has the ability to exert significant influence over us and our corporate decisions. • The terms of our arrangements with Genworth may be more favorable than we will be able to obtain from an unaffiliated third party. • We could be affected by issues affecting Genworth in a way that could materially and adversely affect our business, financial condition, liquidity and prospects. • Genworth’s continued ownership of at least 80% of our common stock may limit our ability to raise additional capital by issuing common stock to third parties.
Risks Relating to Our Continuing Relationship with Genworth • Genworth has the ability to exert significant influence over us and our corporate decisions. • The terms of our arrangements with Genworth may be more favorable than we will be able to obtain from an unaffiliated third party. • We could be affected by issues impacting Genworth in a way that could materially and adversely affect our business, financial condition, liquidity and prospects. • Genworth’s continued ownership of at least 80% of our common stock may limit our ability to raise additional capital by issuing common stock to third parties.
Our delegation of loss mitigation 45 decisions to the GSEs is subject to cancellation, but exercise of our cancellation rights may have an adverse effect on our relationship with the GSEs and customers. Our delegated underwriting program may subject our mortgage insurance business to unanticipated claims.
Our delegation of loss mitigation decisions to the GSEs is subject to cancellation, but exercise of our cancellation rights may have an adverse effect on our relationship with the GSEs and customers. Our delegated underwriting program may subject our mortgage insurance business to unanticipated claims.
The limitations of our models may be material and could lead us to make wrong or sub-optimal decisions in aspects of our business, which could have a material adverse effect on our business, results of operations and financial condition.
The limitations of our models may be material 33 and could lead us to make wrong or sub-optimal decisions in aspects of our business, which could have a material adverse effect on our business, results of operations and financial condition.
Although we believe these agreements contain commercially reasonable terms, the terms of these agreements may later prove not to be in the best interests of our future stockholders or may contain terms less favorable than those we could obtain from third parties.
Although we believe these agreements contain commercially reasonable terms, the terms of these agreements may prove not to be in the best interests of our future stockholders or may contain terms less favorable than those we could obtain from third parties.
The PMIERs include financial requirements for mortgage insurers under which a mortgage insurer’s “Available Assets” (generally only the most liquid assets of an insurer) must meet or exceed “Minimum Required Assets” (which are based on an insurer’s RIF and are calculated from tables of factors with several risk dimensions and are subject to a floor amount) and otherwise generally establish when a mortgage insurer is qualified to issue coverage that will be acceptable to the respective GSE for acquisition of high LTV mortgages.
PMIERs includes financial requirements for mortgage insurers under which a mortgage insurer’s “Available Assets” (generally only the most liquid assets of an insurer) must meet or exceed “Minimum Required Assets” (which are based on an insurer’s RIF and are calculated from tables of factors with several risk dimensions and are subject to a floor amount) and otherwise generally establish when a mortgage insurer is qualified to issue coverage that will be acceptable to the respective GSE for acquisition of high LTV mortgages.
The increased use of algorithms, artificial intelligence and data and analytics in the mortgage insurance industry may also lead to additional regulatory scrutiny related to other matters such as discrimination in pricing and underwriting, data privacy and access to insurance.
The increased use of algorithms, artificial intelligence and data and analytics in the industry may also lead to additional regulatory scrutiny related to other matters such as discrimination in pricing and underwriting, data privacy and access to insurance.
The Enterprise Capital Framework significantly increases capital requirements and reduces capital credit on CRT transactions as compared to the previous framework. The final rule could cause the GSEs to increase their guarantee pricing in order to meet the new capital requirements.
The Enterprise Capital Framework significantly increases capital requirements and reduces capital credit on CRT transactions as compared to the previous framework. The final rule could cause the GSEs 47 to increase their guarantee pricing in order to meet the new capital requirements.
While mortgage insurance does not cover property damage, a natural or man-made disaster or public health emergency, such as a pandemic, could disrupt our computer systems and our ability to conduct or process business (including as a result of widespread absences of our employees) as well as lead to higher delinquency rates as borrowers who are affected by the disaster may be unable to meet their contractual obligations, such as mortgage payments on loans insured under our mortgage insurance coverage.
While mortgage insurance does not cover property damage, a natural or man-made 55 disaster or public health emergency could disrupt our computer systems and our ability to conduct or process business (including as a result of widespread absences of our employees) as well as lead to higher delinquency rates as borrowers who are affected by the disaster may be unable to meet their contractual obligations, such as mortgage payments on loans insured under our mortgage insurance coverage.
Dividends from our subsidiaries and permitted payments to us under arrangements with our subsidiaries are our principal sources of cash to meet our obligations. These obligations include operating expenses and interest and principal on current and any future borrowings.
Dividends from our subsidiaries and permitted payments to us under arrangements with our 52 subsidiaries are our principal sources of cash to meet our obligations. These obligations include operating expenses and interest and principal on current and any future borrowings.
See “—If the models used in our business are inaccurate or there are differences and/or variability in loss development compared to our model estimates and actuarial assumptions, it could have a material adverse effect on our business, results of operations and financial condition.” In the event the premiums we charge for our mortgage insurance coverage may not adequately compensate us for the risks and costs associated with the coverage, it may have a material adverse effect on our business, results of operation and financial condition.
See “—If the models used in our business are inaccurate or there are differences and/or variability in loss development compared to our model estimates and actuarial assumptions, it could have a material adverse effect on our business, results of operations and financial condition.” In the event the premiums we charge for our mortgage insurance coverage do not adequately compensate us for the risks and costs associated with the coverage, it may have a material adverse effect on our business, results of operations and financial condition.
This rule could also accelerate the recent diversification of the GSEs’ risk transfer programs to encompass a broader array of instruments beyond private mortgage insurance, which could adversely impact our business.
This rule could also accelerate the diversification of the GSEs’ risk transfer programs to encompass a broader array of instruments beyond private mortgage insurance, which could adversely impact our business.
Our premium rates vary with the perceived risk of a claim and prepayment on the insured loan and are developed using models based on our long-term historical experience, which takes into account a number of factors including, but not limited to, the LTV ratio, whether the mortgage provides for fixed payments or variable payments, the term of the mortgage, the borrower’s credit history, the borrower’s income and assets, and home price appreciation.
Our premium rates vary with the perceived risk of a claim and prepayment on the insured loan and are developed using models based on our long-term historical experience, which take into account a number of factors including, but not limited to, the LTV ratio, whether the mortgage provides for fixed payments or variable payments, the term of the mortgage, the borrower’s credit history, the borrower’s income and assets, and home price appreciation.
In addition, the Enterprise Capital Framework that was promulgated on December 17, 2020 may impact the CRT programs developed by Fannie Mae and Freddie Mac and/or the role of private mortgage insurance as credit enhancement by potentially accelerating the recent diversification of the GSE’s risk transfer programs to encompass a broader array of instruments, beyond private mortgage insurance.
In addition, the Enterprise Capital Framework that was promulgated on December 17, 2020 may impact the CRT programs developed by Fannie Mae and Freddie Mac and/or the role of private mortgage insurance as credit enhancement by potentially accelerating the recent diversification of the GSEs’ risk transfer programs to encompass a broader array of instruments, beyond private mortgage insurance.
In the current period of rising market interest rates, the market value of our lower yielding instruments has declined, driving substantial unrealized losses in our portfolio. While we intend to hold these securities until maturity so as to realize their book value, pressure to sell securities in an unrealized loss position could drive realized losses and impact future earnings.
In the current period of elevated interest rates, the market value of our lower yielding instruments has declined, driving substantial unrealized losses in our portfolio. While we intend to hold these securities until maturity so as to realize their book value, pressure to sell securities in an unrealized loss position could drive realized losses and impact future earnings.
These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Cautionary Note Regarding Forward-Looking Statements” and the risks of our businesses described elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2023.
These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Cautionary Note Regarding Forward-Looking Statements” and the risks of our businesses described elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2024.
GAAP financial statements based on claim rates and severity for loans that servicers have reported to us as being in default, which is typically after the second 34 missed payment. We also establish incurred but not reported (“IBNR”) reserves for estimated losses incurred on loans in default that have not yet been reported to us by servicers.
GAAP financial statements based on claim rates and severity for loans that servicers have reported to us as being in default, which is typically after the second 32 missed payment. We also establish incurred but not reported (“IBNR”) reserves for estimated losses incurred on loans in default that have not yet been reported to us by servicers.
As part of the process to potentially end the conservatorships of the GSEs, on December 17, 2020, the FHFA promulgated a final rule imposing a new capital framework on the GSEs, including risk-based and leverage capital requirements and capital buffers in excess of regulatory minimums that can be drawn down in periods of financial stress (the “Enterprise Capital Framework”).
As part of the process to potentially end the conservatorships of the GSEs, the FHFA promulgated a final rule in 2020 imposing a new capital framework on the GSEs, including risk-based and leverage capital requirements and capital buffers in excess of regulatory minimums that can be drawn down in periods of financial stress (the “Enterprise Capital Framework”).
Since 2011, there have been numerous legislative proposals intended to incrementally scale back the GSEs (such as a statutory mandate for the GSEs to transfer mortgage credit risk to the private sector) or to completely reform the United States housing finance system. Congress, however, has not enacted any legislation to date.
There have been numerous legislative proposals intended to incrementally scale back the GSEs (such as a statutory mandate for the GSEs to transfer mortgage credit risk to the private sector) or to completely reform the United States housing finance system. Congress, however, has not enacted any legislation to date.
The limit on the number of mortgages with two or more risk factors was based on the market size at the time. While we do not expect any material impact to the private mortgage market, changes in the provisions or enforcement of this rule could impact our results.
The limit on the number of mortgages with two or more risk factors was based on the market size at the time. While 35 we do not expect any material impact to the private mortgage market, changes in the provisions or enforcement of this rule could impact our results of operations.
Declining housing values may impact the effectiveness of our loss management programs, eroding the value of mortgage collateral and reducing the likelihood that properties with defaulted mortgages can be sold for an amount sufficient to offset unpaid principal and interest losses.
In addition, declining housing values may impact the effectiveness of our loss management programs, eroding the value of mortgage collateral and reducing the likelihood that properties with defaulted mortgages can be sold for an amount sufficient to offset unpaid principal and interest losses.
Either approach may cause us to refine or otherwise change existing assumptions and/or methodologies and thus associated product pricing and reserve levels, which in turn could have a material adverse effect on our business, results of operations and financial condition.
Changes in our approach may cause us to refine or otherwise change existing assumptions and/or methodologies and thus associated product pricing and reserve levels, which in turn could have a material adverse effect on our business, results of operations and financial condition.
Specifically, such competitive moves could result in a loss of customers, require us to lower premiums or adopt riskier credit guidelines in order to remain competitive, or implement other changes that could lower our revenues, increase the risk of the loans we insure or increase our expenses.
Specifically, such competitive moves could result in a loss of customers, require us to lower premiums, adopt riskier credit guidelines or implement other changes that could lower our revenues, increase the risk of the loans we insure or increase our expenses.
We are exposed to various risks arising out of natural and man-made disasters and public health emergencies, including earthquakes, hurricanes, floods, wildfires, tornadoes, other extreme weather events, acts of terrorism, military actions (including international activity that impacts the United States’ economy, such as the current geopolitical unrest in Ukraine and the Middle East) and pandemics, similar to COVID-19.
We are exposed to various risks arising out of natural and man-made disasters and public health emergencies, including earthquakes, hurricanes, floods, wildfires, tornadoes, other extreme weather events, acts of terrorism, military actions (including international activity that impacts the United States’ economy, such as the current geopolitical unrest in Ukraine and the Middle East) and pandemics.
It is possible the GSEs could, in their own discretion, require additional limitations and/or conditions on our activities and practices that are not currently in PMIERs for us to remain an approved insurer.
It is possible the GSEs could, at their discretion, require additional limitations and/or conditions on our activities and practices that are not currently in PMIERs for us to remain an approved insurer.
Following the financial crisis of 2008, the Basel Committee issued Basel III that established RBC and leverage capital requirements for most United States banking organizations (although banking organizations with less than $10 billion in total assets may now choose to comply with 52 an alternative community bank leverage ratio framework established by the Federal Banking Agencies in 2019).
Following the financial crisis of 2008, the Basel Committee issued Basel III that established RBC and leverage capital requirements for most United States banking organizations (although banks with less than $10 billion in total assets may choose to comply with an alternative community bank leverage ratio framework established by the Federal Banking Agencies in 2019).
As a consequence, we will pay Genworth our share of the consolidated income tax liability when we have taxable income or receive benefit for losses we contribute and which are utilized to the Genworth Consolidated Group.
As a consequence, we will pay Genworth our share of the consolidated income tax liability when we have taxable income or receive benefit for losses we contribute and which are utilized by the Genworth Consolidated Group.
Among other things, the amendments to the PSPAs limit the number of certain mortgages the GSEs may acquire with two or more prescribed risk factors, including certain mortgages with combined loan-to-value LTV ratios above 90%.
Among other things, the amendments to the PSPAs limit the number of certain mortgages the GSEs may acquire with two or more prescribed risk factors, including certain mortgages with combined LTV ratios above 90%.
We may be forced to change our investments or investment policies depending upon regulatory, economic and market conditions and our existing or anticipated financial condition and operating requirements, including the tax position, of our business.
We may be forced to change our investments or investment policies depending upon regulatory, economic and market conditions and our existing or anticipated financial condition, including the tax position, of our business.
While it is our goal to safeguard information assets from physical theft and cybersecurity threats, there can be no 59 assurance that our information security will detect and protect information assets from these ever-increasing risks.
While it is our goal to safeguard information assets from physical theft and cybersecurity threats, there can be no assurance that our information security will detect and protect information assets from ever-increasing risks.
This exclusive forum provision does not preclude or contract the scope of exclusive federal or concurrent jurisdiction for any actions brought under the Securities Act. This exclusive forum provision does not apply to actions arising under the Exchange Act of 1934 (the “Exchange Act”).
This exclusive forum provision does not preclude or reduce the scope of exclusive federal or concurrent jurisdiction for any actions brought under the Securities Act. This exclusive forum provision does not apply to actions arising under the Exchange Act of 1934 (the “Exchange Act”).
In 2013, the US federal banking regulators confirmed the role of mortgage insurance as a component of prudential bank regulation for high loan to value mortgages. More recently, in July of 2023, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency proposed for comment the Basel III Endgame rule.
In 2013, the U.S. federal banking regulators confirmed the role of mortgage insurance as a component of prudential bank regulation for high loan-to-value mortgages. More recently, in July of 2023, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency proposed for comment the Basel III Endgame rule.
We enter into agreements with our customers that commit us to insure loans made by them using our pre-established guidelines for delegated underwriting. Delegated underwriting represented 70% and 71% of our total NIW by loan count for the years ended December 31, 2023 and 2022, respectively.
We enter into agreements with our customers that commit us to insure loans made by them using our pre-established guidelines for delegated underwriting. Delegated underwriting represented approximately 71% and 70% of our total NIW by loan count for the years ended December 31, 2024 and 2023, respectively.
Although we anticipate continuing to pay quarterly dividends to our shareholders, future dividend payments and share repurchase authorizations are subject to review and approval by our Board of Directors after considering, among other factors, economic and regulatory constraints, current risks to the Company, and subsidiary performance.
Although we anticipate continuing to pay quarterly dividends and repurchase common stock, future dividend payments and share repurchase authorizations are subject to review and approval by our Board of Directors after considering, among other factors, economic and regulatory constraints, current risks to the Company, and subsidiary performance.
These administrative powers include, but are not limited to: • licensing companies and agents to transact business; • regulating certain premium rates; • reviewing and approving policy forms; • regulating discrimination in pricing, coverage terms and unfair trade and claims practices, including payment of inducements; • establishing and revising statutory capital and reserve requirements and solvency standards; • evaluating enterprise risk to an insurance company; • approving changes in control of insurance companies; • restricting the payment of dividends and other transactions between affiliates; • regulating the types, amounts and valuation of investments; and • restricting, pursuant to state monoline restrictions, the types of insurance products that may be offered.
Insurance regulatory authorities have broad administrative powers, which include, but are not limited to: • licensing companies and agents to transact business; • regulating certain premium rates; • reviewing and approving policy forms; • regulating discrimination in pricing, coverage terms and unfair trade and claims practices, including payment of inducements; • establishing and revising statutory capital and reserve requirements and solvency standards; • evaluating enterprise risk to an insurance company; • approving changes in control of insurance companies; • restricting the payment of dividends and other transactions between affiliates; • regulating the types, amounts and valuation of investments; and • restricting, pursuant to state monoline restrictions, the types of insurance products that may be offered.
So long as Genworth continues to beneficially own more than 50% of our outstanding common stock, Genworth will have certain rights, including the right to nominate the majority of our directors. Certain of these directors may also be officers or employees of Genworth or certain of Genworth’s other subsidiaries.
So long as Genworth continues to beneficially own more than 50% of our outstanding common stock, Genworth will have certain rights, including the right to nominate the majority of our directors. Certain of these directors may be officers or employees of Genworth or its other subsidiaries.
Interruptions to or problems with services provided under the Shared Services Agreement could result in conflicts between us and Genworth or certain of Genworth’s other subsidiaries that increase our costs both for the processing of business and the potential remediation of disputes.
Interruptions to or problems with services provided under the Shared Services Agreement could result in conflicts between us and Genworth or its other subsidiaries that increase our costs both for the processing of business and the potential remediation of disputes.
We negotiated these arrangements with Genworth or certain of Genworth’s other subsidiaries in the context of a parent-subsidiary relationship. We cannot assure you that these services will be sustained at the same levels or that we would be able to replace such services in a timely manner or on comparable terms.
We negotiated these arrangements with Genworth or certain of Genworth’s other 49 subsidiaries in the context of a parent-subsidiary relationship. We cannot ensure that these services will be sustained at the same levels or that we would be able to replace such services in a timely manner or on comparable terms.
In addition, future dividend payments or other means of returning capital to our shareholders are also subject to approval by Genworth, compliance with the terms of our debt agreements and applicable laws and regulations. Our ability to repurchase stock may also be restricted by our limited public float and relationship with Genworth.
In addition, future dividend payments or other return of capital to our shareholders are also subject to approval by Genworth, and must be in compliance with the terms of our debt agreements and applicable laws and regulations. Our ability to repurchase stock may also be restricted by our limited public float and relationship with Genworth.
Because of their current or former positions with Genworth or certain of Genworth’s other subsidiaries, these directors, as well as a number of our officers, own substantial amounts of Genworth’s common stock and options to purchase Genworth’s common stock.
Because of their current or former positions with Genworth or its other subsidiaries, these directors, as well as a number of our officers, own amounts of Genworth’s common stock and options to purchase Genworth’s common stock.
While management continually reviews the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time.
While management continually reviews the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in fully accomplishing our control objectives.
The adoption of any GSE reform, whether through legislation or administrative action, could impact the current role of private mortgage insurance as credit enhancement, including its reduction or elimination, which would have an adverse effect on our business, revenue, results of operations and financial condition.
The adoption of any GSE reform, whether through legislation or administrative action, could impact the current role of private mortgage insurance as credit enhancement, which would have an adverse effect on our business, revenue, results of operations and financial condition.
Our inability to fund or raise the capital required in the anticipated timeframes and on the anticipated terms, could have a material adverse impact on our business, results of operations and 42 financial condition, including causing us to reduce our business levels or be subject to a variety of regulatory actions.
Our inability to fund or raise the capital required in the anticipated timeframes and on the anticipated terms, including the refinancing of existing debt, could have a material adverse impact on our business, results of operations and financial condition, including causing us to reduce our business levels or be subject to a variety of regulatory actions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not identified any risks from cybersecurity incidents or threats that have materially affected our business strategy, results of operations or financial condition, and we do not believe that such risks are reasonably likely to have such an effect over the long term.
Biggest changeBased on the information available as of the date of this Annual Report on Form 10-K, we believe that risks from cybersecurity threats, including as a result of previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations or financial condition, and as of the date of this Annual Report on Form 10-K, the Company is not aware of any material risks from cybersecurity threats that are reasonably likely to do so.
The Committee also reviews the Chief Compliance Officer’s quarterly report, which includes information regarding certain data security incidents that meet the risk criteria for inclusion in the report.
The Risk Committee also reviews the Chief Compliance Officer’s quarterly report, which includes information regarding certain data security incidents that meet the risk criteria for inclusion in the report.
These sessions may cover, among other topics, the information security organization, material risks, technical threats, information technology security infrastructure, patching and vulnerability management, cybersecurity incidents, an annual cybersecurity tabletop exercise and incident preparedness, supplier management, security awareness training, cybersecurity personnel/staffing and a cybersecurity threat assessment. Item 2.
These sessions may cover, among other topics, the information security organization, material risks, technical threats, information technology security infrastructure, patching and vulnerability management, cybersecurity incidents, an annual cybersecurity tabletop exercise and incident preparedness, supplier management, security awareness training, cybersecurity personnel/staffing and a cybersecurity threat assessment. 58
Management also keeps the Committee apprised of changes in the threat landscape, such as new projects or strategies that may involve cybersecurity risks, evolving trends, and cyber incidents that involve our customers and suppliers. At least annually, we present a cybersecurity report to our full Board of Directors along with semiannual briefings.
Management also keeps the Risk Committee apprised of changes in the threat landscape, such as new projects or strategies that may involve cybersecurity risks, evolving trends, and cyber incidents that involve our customers and suppliers. At least annually, management presents a cybersecurity report to our full Board of Directors along with semiannual briefings.
We employ a multi-layered approach to data security and data privacy. This approach begins with our information security program, which leverages National Institute of Standards and Technology, SP 800-53. Our program includes policies and standards that delineate requirements for the implementation and on-going maintenance of our information systems as well as security responsibilities for all personnel.
We employ a multi-layered approach to data security and data privacy. This approach begins with our information security program, which leverages the National Institute of Standards and Technology Cybersecurity Framework. Our program includes policies and standards that delineate requirements for the implementation and on-going maintenance of our information systems as well as security responsibilities for all personnel.
The Chief Information Security Officer has over 18 years of experience in information security, technology audit, and technology operations and includes the design, implementation, and maintenance of greenfield cybersecurity programs for regulated specialty insurance and software-as-a-service companies.
The Chief Information Security Officer has over 19 years of experience in information security, technology audit, and technology operations and includes the design, implementation, and maintenance of greenfield cybersecurity programs for regulated specialty insurance and software-as-a-service companies. The Chief Information Security Officer has a master’s degree in information technology with a specialization in cybersecurity augmented with numerous professional designations.
We engage with third parties to assist with the research and evaluation, if deemed necessary. We also consider cybersecurity threats with respect to third party service providers. Third parties who hold sensitive data are subject to our risk assessment process and vendor management due diligence procedures, which include an evaluation of cybersecurity risk.
Third parties who hold sensitive data are subject to our risk assessment process and vendor management due diligence procedures, which include an evaluation of cybersecurity risk.
If the incident is sufficiently severe, it will trigger our cybersecurity incident response plan, which is carried out by a cross-functional team of professionals who ultimately report findings and suggest action plans to our senior leadership team and Genworth. In accordance with the plan, we assess, contain and eradicate the threat and notify relevant external parties.
Incidents that are subject to escalation are initially evaluated by a team of IT security personnel led by our Chief Information Security Officer. If the incident is sufficiently severe, it will trigger our cybersecurity incident response plan, which is carried out by a cross-functional team who ultimately report findings and suggest action plans to our senior leadership team and Genworth.
Additional information on cybersecurity risks we face can be found in “Item 1A Risk Factors” of this Annual Report.
However, there can be no guarantee that we will not be the subject of future successful cybersecurity attacks, threats or incidents that may materially affect our business strategy, results of operations or financial condition. Additional information on cybersecurity risks we face can be found in “Item 1A Risk Factors” of this Annual Report.
Removed
Incidents that are subject to escalation are initially evaluated by a team of IT security personnel led by our Chief Information Security Officer.
Added
In accordance with 57 the plan, we assess, contain and eradicate the threat and notify relevant external parties. We engage with third parties to assist with the research and evaluation, if deemed necessary. We also consider cybersecurity threats with respect to third party service providers.
Removed
The 63 Chief Information Security Officer has a master’s degree in information technology with a specialization in cybersecurity augmented with professional designations including the Amazon Web Services (“AWS”) Certified Solutions Architect Associate, AWS Certified Security - Specialty, Global Information Assurance Certification (“GIAC”) Cloud Security Automation, GIAC Certified Intrusion Analyst, GIAC Penetration Tester, GIAC Web Application Penetration Tester, and Certified Information Systems Security Professional.
Removed
Properties We are currently leasing our headquarters in Raleigh, North Carolina, which consists of approximately 130,000 square feet. The lease is set to expire in December 2027. Additionally, we lease a second office in Washington, D.C. consisting of approximately 2,022 square feet. That lease is set to expire in April 2026.
Removed
We believe our current facilities are adequate for our current needs and that suitable additional or alternative space will be available as and when needed.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The table below sets forth information regarding repurchases of our common shares during the three months ended December 31, 2023: Period (Dollar amounts in thousands except per share amounts) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased under Plans or Programs (1) October 1 - October 31, 2023 294,876 $ 27.13 294,876 $ 95,860 November 1 - November 30, 2023 361,285 $ 27.69 361,285 $ 85,856 December 1 - December 31, 2023 0 $ — 0 $ — Total 656,161 $ 27.44 656,161 $ 85,856 _______________ (1) On November 1, 2022, the Company announced authorization to repurchase up to $75 million of its common shares.
Biggest changeIssuer Purchases of Equity Securities The table below sets forth information regarding repurchases of our common shares during the three months ended December 31, 2024: Period (Dollar amounts in thousands except per share amounts) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased under Plans or Programs (1) October 1 - October 31, 2024 837,777 $ 35.89 837,777 $ 136,741 November 1 - November 30, 2024 844,891 $ 34.06 844,891 $ 107,963 December 1 - December 31, 2024 444,852 $ 33.93 444,852 $ 92,871 Total 2,127,520 $ 34.75 2,127,520 $ 92,871 _______________ (1) On May 1, 2024, the Company announced the authorization of the share repurchase program that allows for the repurchase of up to $250 million of its common shares.
The inaugural quarterly dividend of $0.14 per share was paid in the second quarter of 2022, followed by payments of regular dividends of $0.14 per share in each quarter through the first quarter of 2023. In the second quarter of 2023, the regular dividend increased to $0.16 per share.
The inaugural quarterly dividend of $0.14 per share was paid in the second quarter of 2022, followed by payments of regular dividends of $0.14 per share in each quarter through the first quarter of 2023. In the second quarter of 2023, the regular quarterly dividend increased to $0.16 per share.
See “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information on dividends. Item 6. [Reserved] 66
See “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information on dividends. Item 6. [Reserved] 61
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock Our common stock is listed on the Nasdaq Stock Market under the symbol “ACT.” As of February 26, 2024, we had 5 registered holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock Our common stock is listed on the Nasdaq Stock Market under the symbol “ACT.” As of February 24, 2025, we had 5 registered holders of record of our common stock.
Subsequent to year end, the Company purchased 133,307 shares at an average price of $27.75 per share through January 31, 2024. 65 Stock Performance Graph The graph below compares the cumulative total stockholder return of an investment in (i) our common shares, (ii) the Russell 2000 Index, (iii) the S&P 500 and (iv) a composite peer group consisting of Essent Group Ltd., MGIC Investment Corporation, NMI Holdings, Inc., and Radian Group Inc, for the period from September 16, 2021 (the date our common shares commenced trading on the Nasdaq Stock Market) through December 31, 2023.
Subsequent to year end, the Company purchased 591,363 shares at an average price of $32.60 per share through January 31, 2025. 60 Stock Performance Graph The graph below compares the cumulative total stockholder return of an investment in (i) our common shares, (ii) the Russell 2000 Index, (iii) the S&P 500 and (iv) a composite peer group consisting of Essent Group Ltd., MGIC Investment Corporation, NMI Holdings, Inc., and Radian Group Inc, for the period from September 16, 2021 (the date our common shares commenced trading on the Nasdaq Stock Market) through December 31, 2024.
In addition to our regular dividends, we paid special cash dividends of $0.71 per share during the fourth quarter of 2023 and $1.12 per share during the fourth quarter of 2022. In February of 2024, we announced our first quarter dividend of $0.16 per share.
In the second quarter of 2024, the regular quarterly dividend increased to $0.185 per share. In addition to our regular dividends, we paid special cash dividends of $0.71 per share during the fourth quarter of 2023 and $1.12 per share during the fourth quarter of 2022. In February of 2025, we announced our first quarter dividend of $0.185 per share.
September 16, 2021 December 31, 2021 December 31, 2022 December 31, 2023 Enact Holdings, Inc. $100.00 $106.61 $132.49 $166.54 Russell 2000 $100.00 $100.56 $78.88 $90.78 S&P 500 $100.00 $106.54 $85.82 $106.62 Peer Group $100.00 $98.97 $90.52 $133.21 Dividends During the first quarter of 2022, we announced that our Board of Directors approved the initiation of a dividend program under which the Company intends to pay a quarterly cash dividend.
September 16, 2021 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 Enact Holdings, Inc. $100.00 $106.61 $132.49 $166.54 $190.95 Russell 2000 $100.00 $100.89 $80.27 $93.86 $104.69 S&P 500 $100.00 $106.94 $87.57 $110.59 $138.26 Peer Group $100.00 $98.97 $90.52 $133.21 $154.79 Dividends During the first quarter of 2022, we announced that our Board of Directors approved the initiation of a dividend program under which the Company intends to pay a quarterly cash dividend.
Removed
The authorization has no expiration date. In August 2023, we also announced a new share repurchase authorization which allows for the purchase of an additional $100 million of EHI common stock (also with no expiration date).
Added
The share repurchase program has no expiration date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRIF increased primarily as a result of higher IIF. 85 The following table sets forth IIF and RIF as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 Primary IIF $ 262,937 100 % $ 248,262 100 % $ 226,514 100 % Pool IIF 436 — 505 — 641 — Total IIF $ 263,373 100 % $ 248,767 100 % $ 227,155 100 % Primary RIF $ 67,529 100 % $ 62,791 100 % $ 56,881 100 % Pool RIF 69 — 79 — 105 — Total RIF $ 67,598 100 % $ 62,870 100 % $ 56,986 100 % The following table sets forth primary IIF and primary RIF by origination as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 Purchases IIF $ 231,526 88 % $ 207,827 84 % $ 176,550 78 % Refinances IIF 31,411 12 40,435 16 49,964 22 Total IIF $ 262,937 100 % $ 248,262 100 % $ 226,514 100 % Purchases RIF $ 60,497 90 % $ 54,165 86 % $ 46,470 82 % Refinances RIF 7,032 10 8,626 14 10,411 18 Total RIF $ 67,529 100 % $ 62,791 100 % $ 56,881 100 % The following table sets forth primary IIF and primary RIF by product as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 Monthly IIF $ 233,651 89 % $ 216,831 87 % $ 194,826 86 % Single IIF 27,353 10 29,275 12 29,205 13 Other IIF 1,933 1 2,156 1 2,483 1 Total IIF $ 262,937 100 % $ 248,262 100 % $ 226,514 100 % Monthly RIF $ 61,083 90 % $ 55,879 89 % $ 49,614 87 % Single RIF 5,957 9 6,370 10 6,658 12 Other RIF 489 1 542 1 609 1 Total RIF $ 67,529 100 % $ 62,791 100 % $ 56,881 100 % 86 The following table sets forth primary IIF by policy year as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 2008 and prior $ 5,621 2 % $ 6,596 3 % $ 8,196 4 % 2009 to 2015 3,383 1 5,025 2 7,857 3 2016 4,659 2 6,296 2 8,997 4 2017 5,321 2 6,495 3 8,962 4 2018 5,750 2 6,839 3 9,263 4 2019 13,773 5 16,352 7 21,730 10 2020 44,486 17 55,358 22 69,963 31 2021 70,045 27 81,724 33 91,546 40 2022 59,267 23 63,577 25 — — 2023 50,632 19 — — — — Total $ 262,937 100 % $ 248,262 100 % $ 226,514 100 % The following table sets forth primary RIF by policy year as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 2008 and prior $ 1,449 2 % $ 1,699 3 % $ 2,112 4 % 2009 to 2015 881 1 1,341 2 2,101 3 2016 1,248 2 1,681 3 2,388 4 2017 1,403 2 1,708 3 2,324 4 2018 1,476 2 1,736 3 2,330 4 2019 3,544 5 4,143 7 5,454 10 2020 11,697 17 14,158 22 17,574 31 2021 17,846 27 20,418 32 22,598 40 2022 14,907 22 15,907 25 — — 2023 13,078 20 — — — — Total $ 67,529 100 % $ 62,791 100 % $ 56,881 100 % The following table presents the development of primary IIF for the years ended December 31: (Amounts in millions) 2023 2022 2021 Beginning balance $ 248,262 $ 226,514 $ 207,947 NIW 53,081 66,485 97,004 Cancellations, principal repayments and other reductions (1) (38,406) (44,737) (78,437) Ending balance $ 262,937 $ 248,262 $ 226,514 _____________ (1) Includes the estimated amortization of unpaid principal balance of covered loans. 87 The following table sets forth primary IIF by LTV ratio at origination as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 95.01% and above $ 44,955 17 % $ 39,509 16 % $ 35,455 16 % 90.01% to 95.00% 109,227 41 103,618 42 95,149 42 85.01% to 90.00% 77,887 30 72,132 29 64,549 28 85.00% and below 30,868 12 33,003 13 31,361 14 Total $ 262,937 100 % $ 248,262 100 % $ 226,514 100 % The following table sets forth primary RIF by LTV ratio at origination as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 95.01% and above $ 12,878 19 % $ 11,136 18 % $ 9,907 17 % 90.01% to 95.00% 31,781 47 30,079 48 27,608 49 85.01% to 90.00% 19,163 28 17,621 28 15,644 27 85.00% and below 3,707 6 3,955 6 3,722 7 Total $ 67,529 100 % $ 62,791 100 % $ 56,881 100 % The following table sets forth primary IIF by FICO score at origination as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 Over 760 $ 110,635 42 % $ 102,467 41 % $ 89,982 40 % 740-759 43,053 17 40,097 16 35,874 16 720-739 37,020 14 34,916 14 31,730 14 700-719 29,766 11 28,867 12 27,359 12 680-699 21,835 8 21,554 9 21,270 9 660-679 (1) 11,357 4 10,926 4 10,549 5 640-659 6,137 3 6,095 3 6,124 3 620-639 2,504 1 2,630 1 2,783 1 630 — 710 — 843 — Total $ 262,937 100 % $ 248,262 100 % $ 226,514 100 % ______________ (1) Loans with unknown FICO scores are included in the 660-679 category. 88 The following table sets forth primary RIF by FICO score at origination as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 Over 760 $ 28,363 42 % $ 25,807 41 % $ 22,489 40 % 740-759 11,096 17 10,154 16 9,009 16 720-739 9,621 14 8,931 14 8,055 14 700-719 7,623 11 7,317 12 6,907 12 680-699 5,557 8 5,428 9 5,334 9 660-679 (1) 2,908 4 2,767 5 2,638 5 640-659 1,565 3 1,540 2 1,530 3 620-639 635 1 665 1 702 1 161 — 182 — 217 — Total $ 67,529 100 % $ 62,791 100 % $ 56,881 100 % ______________ (1) Loans with unknown FICO scores are included in the 660-679 category.
Biggest changeRIF increased primarily as a result of higher IIF. 78 The following table sets forth IIF and RIF as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 Primary IIF $ 268,825 100 % $ 262,937 100 % $ 248,262 100 % Pool IIF 379 — 436 — 505 — Total IIF $ 269,204 100 % $ 263,373 100 % $ 248,767 100 % Primary RIF $ 69,985 100 % $ 67,529 100 % $ 62,791 100 % Pool RIF 57 — 69 — 79 — Total RIF $ 70,042 100 % $ 67,598 100 % $ 62,870 100 % The following table sets forth primary IIF and primary RIF by origination as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 Purchases IIF $ 243,730 91 % $ 231,526 88 % $ 207,827 84 % Refinances IIF 25,095 9 31,411 12 40,435 16 Total IIF $ 268,825 100 % $ 262,937 100 % $ 248,262 100 % Purchases RIF $ 64,031 91 % $ 60,497 90 % $ 54,165 86 % Refinances RIF 5,954 9 7,032 10 8,626 14 Total RIF $ 69,985 100 % $ 67,529 100 % $ 62,791 100 % The following table sets forth primary IIF and primary RIF by product as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 Monthly IIF $ 241,785 90 % $ 233,651 89 % $ 216,831 87 % Single IIF 25,301 9 27,353 10 29,275 12 Other IIF 1,739 1 1,933 1 2,156 1 Total IIF $ 268,825 100 % $ 262,937 100 % $ 248,262 100 % Monthly RIF $ 64,078 91 % $ 61,083 90 % $ 55,879 89 % Single RIF 5,466 8 5,957 9 6,370 10 Other RIF 441 1 489 1 542 1 Total RIF $ 69,985 100 % $ 67,529 100 % $ 62,791 100 % 79 The following table sets forth primary IIF by policy year as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 2008 and prior $ 4,860 2 % $ 5,621 2 % $ 6,596 3 % 2009 to 2016 5,138 2 8,042 3 11,321 4 2017 3,907 1 5,321 2 6,495 3 2018 4,790 2 5,750 2 6,839 3 2019 11,415 4 13,773 5 16,352 7 2020 34,940 13 44,486 17 55,358 22 2021 57,266 21 70,045 27 81,724 33 2022 53,063 20 59,267 23 63,577 25 2023 45,208 17 50,632 19 — — 2024 48,238 18 — — — — Total $ 268,825 100 % $ 262,937 100 % $ 248,262 100 % The following table sets forth primary RIF by policy year as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 2008 and prior $ 1,256 2 % $ 1,449 2 % $ 1,699 3 % 2009 to 2016 1,332 2 2,129 3 3,022 5 2017 1,036 1 1,403 2 1,708 3 2018 1,233 2 1,476 2 1,736 3 2019 2,984 4 3,544 5 4,143 7 2020 9,553 14 11,697 17 14,158 22 2021 15,043 21 17,846 27 20,418 32 2022 13,476 19 14,907 22 15,907 25 2023 11,719 17 13,078 20 — — 2024 12,353 18 — — — — Total $ 69,985 100 % $ 67,529 100 % $ 62,791 100 % The following table presents the development of primary IIF for the years ended December 31: (Amounts in millions) 2024 2023 2022 Beginning balance $ 262,937 $ 248,262 $ 226,514 NIW 51,002 53,081 66,485 Cancellations, principal repayments and other reductions (1) (45,114) (38,406) (44,737) Ending balance $ 268,825 $ 262,937 $ 248,262 _____________ (1) Includes the estimated amortization of unpaid principal balance of covered loans. 80 The following table sets forth primary IIF by LTV ratio at origination as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 95.01% and above $ 50,318 18 % $ 44,955 17 % $ 39,509 16 % 90.01% to 95.00% 112,362 42 109,227 41 103,618 42 85.01% to 90.00% 79,932 30 77,887 30 72,132 29 85.00% and below 26,213 10 30,868 12 33,003 13 Total $ 268,825 100 % $ 262,937 100 % $ 248,262 100 % The following table sets forth primary RIF by LTV ratio at origination as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 95.01% and above $ 14,428 21 % $ 12,878 19 % $ 11,136 18 % 90.01% to 95.00% 32,686 47 31,781 47 30,079 48 85.01% to 90.00% 19,729 28 19,163 28 17,621 28 85.00% and below 3,142 4 3,707 6 3,955 6 Total $ 69,985 100 % $ 67,529 100 % $ 62,791 100 % The following table sets forth primary IIF by FICO score at origination as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 Over 760 $ 115,554 43 % $ 110,635 42 % $ 102,467 41 % 740-759 43,955 17 43,053 17 40,097 16 720-739 37,717 14 37,020 14 34,916 14 700-719 29,819 11 29,766 11 28,867 12 680-699 21,355 8 21,835 8 21,554 9 660-679 (1) 11,245 4 11,357 4 10,926 4 640-659 6,147 2 6,137 3 6,095 3 620-639 2,461 1 2,504 1 2,630 1 572 — 630 — 710 — Total $ 268,825 100 % $ 262,937 100 % $ 248,262 100 % ______________ (1) Loans with unknown FICO scores are included in the 660-679 category. 81 The following table sets forth primary RIF by FICO score at origination as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 Over 760 $ 29,985 43 % $ 28,363 42 % $ 25,807 41 % 740-759 11,494 17 11,096 17 10,154 16 720-739 9,949 14 9,621 14 8,931 14 700-719 7,746 11 7,623 11 7,317 12 680-699 5,523 8 5,557 8 5,428 9 660-679 (1) 2,924 4 2,908 4 2,767 5 640-659 1,589 2 1,565 3 1,540 2 620-639 629 1 635 1 665 1 146 — 161 — 182 — Total $ 69,985 100 % $ 67,529 100 % $ 62,791 100 % ______________ (1) Loans with unknown FICO scores are included in the 660-679 category.
In accordance with NCDOI requirements, adjusted RIF excludes delinquent policies.
In accordance with NCDOI requirements, adjusted RIF excludes delinquent policies.
(2) Includes the District of Columbia. 92 The table below sets forth our primary delinquency rates for the ten largest states by our primary RIF as of December 31, 2022: Percent of RIF Percent of direct primary case reserves Delinquency rate By state: California 12 % 10 % 2.09 % Texas 8 7 2.12 % Florida (1) 8 8 2.54 % New York (1) 5 13 2.95 % Illinois (1) 5 6 2.54 % Arizona 4 2 1.78 % Michigan 4 3 1.79 % North Carolina 3 3 1.59 % Georgia 3 3 2.23 % Washington 3 3 1.92 % All other states (2) 45 42 1.94 % Total 100 % 100 % 2.08 % ______________ (1) Jurisdiction predominantly uses a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.
(2) Includes the District of Columbia . 85 The table below sets forth our primary delinquency rates for the ten largest states by our primary RIF as of December 31, 2022: Percent of RIF Percent of direct primary case reserves Delinquency rate By state: California 12 % 10 % 2.09 % Texas 8 7 2.12 % Florida (1) 8 8 2.54 % New York (1) 5 13 2.95 % Illinois (1) 5 6 2.54 % Arizona 4 2 1.78 % Michigan 4 3 1.79 % North Carolina 3 3 1.59 % Georgia 3 3 2.23 % Washington 3 3 1.92 % All other states (2) 45 42 1.94 % Total 100 % 100 % 2.08 % ______________ (1) Jurisdiction predominantly uses a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.
The table 91 below sets forth our primary delinquency rates for the ten largest states by our primary RIF as of December 31, 2023: Percent of RIF Percent of direct primary case reserves Delinquency rate By state: California 13 % 12 % 2.22 % Texas 8 8 2.22 % Florida (1) 8 9 2.39 % New York (1) 5 12 3.05 % Illinois (1) 4 6 2.61 % Arizona 4 3 1.93 % Michigan 4 3 1.94 % Georgia 3 3 2.23 % North Carolina 3 2 1.56 % Washington 3 2 1.77 % All other states (2) 45 40 1.93 % Total 100 % 100 % 2.10 % ______________ (1) Jurisdiction predominantly uses a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.
The table below sets forth our primary delinquency rates for the ten largest states by our primary RIF as of December 31, 2023: Percent of RIF Percent of direct primary case reserves Delinquency rate By state: California 13 % 12 % 2.22 % Texas 8 8 2.22 % Florida (1) 8 9 2.39 % New York (1) 5 12 3.05 % Illinois (1) 4 6 2.61 % Arizona 4 3 1.93 % Michigan 4 3 1.94 % Georgia 3 3 2.23 % North Carolina 3 2 1.56 % Washington 3 2 1.77 % All other states (2) 45 40 1.93 % Total 100 % 100 % 2.10 % ______________ (1) Jurisdiction predominantly uses a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.
We believe that the operating cash flows generated by our mortgage insurance subsidiary will provide the funds necessary to satisfy our claim payments, operating expenses and taxes in both the short-term and long-term. However, our 102 subsidiaries are subject to regulatory and other capital restrictions with respect to the payment of dividends.
We believe that the operating cash flows generated by our mortgage insurance subsidiary will provide the funds necessary to satisfy our claim payments, operating expenses and taxes in both the short-term and long-term. However, our subsidiaries are subject to regulatory and other capital restrictions with respect to the payment of dividends.
Our investment portfolio primarily consists of a diverse mix of highly rated fixed maturity securities and is designed to achieve the following objectives: • Meet policyholder obligations through maintenance of sufficient liquidity; • Preserve capital; • Generate investment income; • Maximize statutory capital; and • Increase shareholder value, among other objectives. 97 To achieve our portfolio objectives, our investment strategy focuses primarily on: • Our business outlook, including current and expected future investment conditions; • Investments selection based on fundamental, research-driven strategies; • Diversification across a mix of fixed income, low-volatility investments while actively pursuing strategies to enhance yield; • Regular evaluation and optimization of our asset class mix; • Continuous monitoring of investment quality, duration and liquidity; • Regulatory capital requirements; and • Restriction of investments correlated to the residential mortgage market.
Our investment portfolio primarily consists of a diverse mix of highly rated fixed maturity securities and is designed to achieve the following objectives: • Meet policyholder obligations through maintenance of sufficient liquidity; • Preserve capital; • Generate investment income; • Maximize statutory capital; and • Increase shareholder value, among other objectives. 89 To achieve our portfolio objectives, our investment strategy focuses primarily on: • Our business outlook, including current and expected future investment conditions; • Investment selection based on fundamental, research-driven strategies; • Diversification across a mix of fixed income, low-volatility investments while actively pursuing strategies to enhance yield; • Regular evaluation and optimization of our asset class mix; • Continuous monitoring of investment quality, duration and liquidity; • Regulatory capital requirements; and • Restriction of investments correlated to the residential mortgage market.
Investment Portfolio Our investment portfolio is affected by factors described below, each of which in turn may be affected by current macroeconomic conditions as noted above in “—Trends and Conditions.” The investment portfolios of our insurance subsidiaries are directed by the Enact Investment Committee, a management-level committee, with Genworth serving as the investment manager.
Investment Portfolio Our investment portfolio is affected by factors described below, each of which in turn may be affected by current macroeconomic conditions as noted above in “—Trends and Conditions.” The investment portfolios of our insurance subsidiaries are directed by the Enact Investment Committee, a management-level committee, with Genworth serving as the primary investment manager.
Because these assumptions relate to factors that are not known in advance, change over time, are difficult to accurately predict and are 72 inherently uncertain, we cannot determine with precision the ultimate amounts we will pay for actual claims or the timing of those payments.
Because these assumptions relate to factors that are not known in advance, change over time, are difficult to accurately predict and are inherently uncertain, we cannot determine with precision the ultimate amounts we will pay for actual claims or the timing of those payments.
However, we do not believe that our cash flow requirements can be assessed based upon this analysis of these obligations, as the funding of these future cash obligations will be from future cash flows from premiums and investment income. Future cash outflows, whether they are contractual obligations or not, also will vary based upon our future needs.
However, we do not believe that our cash flow requirements can be assessed based upon analysis of these obligations, as the funding of these future cash obligations will be from future cash flows from premiums and investment income. Future cash outflows, whether they are contractual obligations or not, also will vary based upon our future needs.
Private mortgage insurance market penetration and eventual market size are affected in part by actions that impact housing or housing finance policy taken by the GSEs and the U.S. government, including but not limited to, the Federal Housing Administration and the FHFA.
Private mortgage insurance market penetration and eventual market size are affected in part by actions that impact housing or housing finance policy taken by the GSEs and the U.S. government, including but not limited to, the Federal Housing Administration (“FHA”) and the FHFA.
We expect the timing and amount of any 79 future share repurchases will be opportunistic and will depend on a variety of factors, including EHI’s share price, capital availability, business and market conditions, regulatory requirements, and debt covenant restrictions.
We expect the timing and amount of any future share repurchases will be opportunistic and will depend on a variety of factors, including EHI’s share price, capital availability, business and market conditions, regulatory requirements, and debt covenant restrictions.
The sources of uncertainty affecting the estimates are numerous and include factors internal and external to us. Internal factors include, but are not limited to, changes in the mix of exposures, loss mitigation activities and claim settlement practices.
The sources of uncertainty affecting the estimates are numerous and include factors internal and external to us. Internal factors include, but are not limited to, changes in 67 the mix of exposures, loss mitigation activities and claim settlement practices.
We are in compliance with all covenants of the Facility and the Facility remained undrawn through December 31, 2023. We continually evaluate opportunities based upon market conditions to further increase our financial flexibility including through raising additional capital, restructuring or refinancing some or all of our outstanding debt or pursuing other options such as reinsurance or credit risk transfer transactions.
We are in compliance with all covenants of the Facility and the Facility remained undrawn through December 31, 2024. We continually evaluate opportunities based upon market conditions to further increase our financial flexibility including through raising additional capital, restructuring or refinancing some or all of our outstanding debt or pursuing other options such as reinsurance or credit risk transfer transactions.
We believe that our platform, powered by our proprietary risk model and our understanding of mortgage risk volatility, provides us with a highly sophisticated pricing regime that improves our risk selection and is designed to yield attractive risk adjusted returns through credit cycles. 69 IIF IIF at the time of origination is used to determine premiums as the premium rate is expressed as a percentage of IIF.
We believe that our platform, powered by our proprietary risk model and our understanding of mortgage risk volatility, provides us with a highly sophisticated pricing regime that improves our risk selection and is designed to yield attractive risk adjusted returns through credit cycles. 64 IIF IIF at the time of origination is used to determine premiums as the premium rate is expressed as a percentage of IIF.
We compete with other private mortgage insurers based on pricing, underwriting guidelines, customer relationships, service levels, policy terms, loss mitigation practices, perceived financial strength (including 68 comparative credit ratings), reputation, strength of management, product features and technology ease-of-use. We also compete with governmental agencies (principally the FHA and the VA) primarily based on price and underwriting guidelines.
We compete with other private mortgage insurers based on pricing, underwriting guidelines, customer relationships, service levels, policy terms, loss mitigation practices, perceived financial strength (including comparative credit ratings), reputation, strength of management, product features and technology ease- 63 of-use. We also compete with governmental agencies (principally the FHA and the VA) primarily based on price and underwriting guidelines.
The following table presents the weighted average mortgage interest rate on outstanding primary IIF as of December 31, 2023, excluding our run-off business. Prepayment speeds may be affected by changes in interest rates, among other factors. An increasing interest rate environment generally will reduce refinancing activity and result in lower prepayments.
The following table presents the weighted average mortgage interest rate on outstanding primary IIF as of December 31, 2024, excluding our run-off business. Prepayment speeds may be affected by changes in interest rates, among other factors. An increasing interest rate environment generally will reduce refinancing activity and result in lower prepayments.
The Facility may be used for working capital needs and general corporate purposes, including the execution of dividends to our shareholders and capital contributions to our insurance subsidiaries. The Facility has remained undrawn through December 31, 2023. The principal sources of liquidity in our business currently include insurance premiums, net investment income and cash flows from investment sales and maturities.
The Facility may be used for working capital needs and general corporate purposes, including the execution of dividends to our shareholders and capital contributions to our insurance subsidiaries. The Facility has remained undrawn through December 31, 2024. The principal sources of liquidity in our business currently include insurance premiums, net investment income and cash flows from investment sales and maturities.
We also consider all available information relevant to the collectability of the security, including information about past events, current conditions and reasonable and supportable forecasts, when developing the estimate of cash flows expected to be collected. There is no recorded allowance for credit losses on available-for-sale securities as of December 31, 2023.
We also consider all available information relevant to the collectability of the security, including information about past events, current conditions and reasonable and supportable forecasts, when developing the estimate of cash flows expected to be collected. There is no recorded allowance for credit losses on available-for-sale securities as of December 31, 2024.
For all of these accounting estimates, we caution that future events seldom develop as estimated and management’s best estimates often require adjustment. Loss Reserves Loss reserves represents the amount needed to provide for the estimated ultimate cost of settling claims relating to insured events that have occurred on or before the end of the respective reporting period.
For all of these accounting estimates, we caution that future events seldom develop as estimated and management’s best estimates often require adjustment. Loss Reserves Loss reserves represent the amount needed to provide for the estimated ultimate cost of settling claims relating to insured events that have occurred on or before the end of the respective reporting period.
See Note 2 and 3 to our consolidated financial statements for additional information related to the allowance for credit losses on fixed maturity securities. Revenue Recognition The majority of our insurance contracts have recurring monthly premiums. We recognize recurring premiums over the terms of the related insurance policy on a pro-rata basis.
See Notes 2 and 3 to our consolidated financial statements for additional information related to the allowance for credit losses on fixed maturity securities. Revenue Recognition The majority of our insurance contracts have recurring monthly premiums. We recognize recurring premiums over the terms of the related insurance policy on a pro-rata basis.
In the event of a borrower default, our coverage reduces and, in certain instances eliminates, losses to the 67 insured by transferring the covered portion of the economic loss to us. Borrower defaults are first reported to us as new delinquencies when the borrower fails to make two consecutive monthly mortgage payments.
In the event of a borrower default, our coverage reduces and, in certain instances eliminates, losses to the insured by transferring the covered portion of the economic loss to us. Borrower defaults are first reported 62 to us as new delinquencies when the borrower fails to make two consecutive monthly mortgage payments.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes for the years ended December 31, 2023, 2022 and 2021 included in Item 8 of this Annual Report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes for the years ended December 31, 2024, 2023 and 2022 included in Item 8 of this Annual Report.
Credit and Regulatory Environment The level of private mortgage insurance market penetration (“market penetration”) and eventual market size is affected in part by actions taken by the GSEs and the United States government, including the FHA, the FHFA and Congress, that impact housing or housing finance policy.
Credit and Regulatory Environment The level of private mortgage insurance market penetration and eventual market size is affected in part by actions taken by the GSEs and the United States government, including the FHA, the FHFA and Congress, that impact housing or housing finance policy.
Likewise, if primary persistency rates declined on our existing insurance in-force by 10%, earned premiums would decline by approximately $96 million during the first full year, partially offset by higher policy cancellations in our single premium products.
Likewise, if primary persistency rates declined on our existing insurance in-force by 10%, earned premiums would decline by approximately $95 million during the first full year, partially offset by higher policy cancellations in our single premium products.
Although some outflows are fixed, others depend on future events. An example of obligations that are fixed include future lease payments. An example of obligations that will vary include insurance liabilities that depend on losses incurred. Refer to Note 7 and Note 12 of our audited consolidated financial statements for discussion of borrowings and commitments in contingencies, respectively.
Although some outflows are fixed, others depend on future events. An example of obligations that are fixed include future lease payments. An example of obligations that will vary include insurance liabilities that depend on losses incurred. Refer to Note 3, Note 7 and Note 12 of our audited consolidated financial statements for discussion of borrowings and commitments and contingencies.
Refer to Note 2 in our audited consolidated financial statements for the years ended December 31, 2023, 2022 and 2021, for a discussion of recently adopted and not yet adopted accounting standards. 103
Refer to Note 2 in our audited consolidated financial statements for the years ended December 31, 2024, 2023 and 2022 for a discussion of recently adopted and not yet adopted accounting standards.
When we enter into a CRT transaction, the reinsurer receives a premium and, in exchange, insures an agreed upon portion of incurred losses. These arrangements have the impact of reducing our earned premiums but also provide capital relief under PMIERs in exchange for a negotiated ceded premium rate.
When we enter into a CRT transaction, the reinsurer receives a premium and, in exchange, insures an agreed upon portion of incurred losses. These arrangements have the impact of reducing our earned premiums and incurred losses, but also provide capital relief under PMIERs.
Liquidity As of December 31, 2023, we maintained liquidity in the form of cash and cash equivalents of $616 million compared to $514 million as of December 31, 2022, and we also held significant levels of investment-grade fixed maturity securities that can be monetized should our cash and cash equivalents be insufficient to meet our obligations.
Liquidity As of December 31, 2024, we maintained liquidity in the form of cash and cash equivalents of $599 million compared to $616 million as of December 31, 2023, and we also held significant levels of investment-grade fixed maturity securities that can be monetized should our cash and cash equivalents be insufficient to meet our obligations.
Based on our estimated statutory results and in accordance with applicable dividend restrictions, our insurance subsidiaries have the capacity to pay dividends of $336 million from unassigned surplus as of December 31, 2023, with 30-day advance notice to the Commissioner of the intent to pay.
Based on our estimated statutory results and in accordance with applicable dividend restrictions, our insurance subsidiaries have the capacity to pay dividends of $153 million from unassigned surplus as of December 31, 2024, with 30-day advance notice to the Commissioner of the intent to pay.
For example, based on our actual experience during the three-year period immediately preceding December 31, 2023, a change of 5 percentage points, or 15%, in the average claim rate would change the gross loss reserve amount for such quarter by approximately $75 million.
For example, based on our actual experience during the three-year period immediately preceding December 31, 2024, a change of 4 percentage points, or 15%, in the average claim rate would change the gross loss reserve amount for such quarter by approximately $72 million.
EMICO’s risk-to-capital ratio under the current regulatory framework as established under North Carolina law and enforced by the NCDOI, EMICO’s domestic insurance regulator, was approximately 11.6:1 as of December 31, 2023 and 12.9:1 as of December 31, 2022. EMICO’s risk-to-capital ratio remains below the NCDOI’s maximum risk-to-capital ratio of 25:1.
EMICO’s risk-to-capital ratio under the current regulatory framework as established under North Carolina law and enforced by the NCDOI, EMICO’s domestic insurance regulator, was approximately 10.5:1 as of December 31, 2024, and 11.6:1 as of December 31, 2023. EMICO’s risk-to-capital ratio remains below the NCDOI’s maximum risk-to-capital ratio of 25:1.
Under the program, share repurchases may be made at our discretion from time to time in open market transactions, privately negotiated transactions, or by other means, including through Rule 10b5-1 trading plans.
Under this program, share repurchases may be made at our discretion from time to time in open market transactions, privately negotiated transactions, or by other means, including through Rule 10b5-1 and Rule 10b-18 trading plans.
Insurance in-force and Risk in-force IIF increased largely from NIW and increased persistency in the current year, partially offset by lapses and cancellations. Primary persistency rate was 85% and 80% for the years ended December 31, 2023 and 2022, respectively.
Insurance in-force and Risk in-force IIF increased largely from NIW and elevated persistency in the current year, partially offset by lapses and cancellations. Primary persistency rate was 83% and 85% for the years ended December 31, 2024 and 2023, respectively.
Pre-foreclosure sales, acquisitions and other early workout and claim administration actions help to reduce overall claim severity. Our average primary mortgage insurance claim severity was 97%, 94% and 103% for the years ended December 31, 2023, 2022 and 2021, respectively. The 2023 average claim severity was impacted by low claim volumes and lifetime home price appreciation.
Pre-foreclosure sales, acquisitions and other early workout and claim administration actions help to reduce overall claim severity. Our average primary mortgage insurance claim severity was 99%, 97% and 94% for the years ended December 31, 2024, 2023 and 2022, respectively. The average claim severities have been impacted by low claim volumes and lifetime home price appreciation.
The following table presents the security ratings of our fixed maturity securities as of the dates indicated: December 31, 2023 December 31, 2022 December 31, 2021 AAA 10 % 10 % 9 % AA 20 16 17 A 33 34 34 BBB 35 38 37 BB & below 2 2 3 Total 100 % 100 % 100 % 98 The table below presents the effective duration and investment yield on our investments available-for-sale, excluding cash and cash equivalents: December 31, 2023 December 31, 2022 December 31, 2021 Duration (in years) 3.5 3.6 3.9 Pre-tax yield (% of average investment portfolio assets) 3.6 % 3.1 % 2.7 % We manage credit risk by analyzing issuers, transaction structures and any associated collateral.
The following table presents the security ratings of our fixed maturity securities as of the dates indicated: December 31, 2024 December 31, 2023 December 31, 2022 AAA 11 % 10 % 10 % AA 22 20 16 A 31 33 34 BBB 35 35 38 BB & below 1 2 2 Total 100 % 100 % 100 % 90 The table below presents the effective duration and investment yield on our investments available-for-sale, excluding cash and cash equivalents: December 31, 2024 December 31, 2023 December 31, 2022 Duration (in years) 4.1 3.5 3.6 Pre-tax yield (% of average investment portfolio assets) 4.0 % 3.6 % 3.1 % We manage credit risk by analyzing issuers, transaction structures and any associated collateral.
Likewise, a change of 4 percentage points, or a change of 4%, in the average severity rate would change the gross loss reserve amount for such quarter by approximately $19 million.
Likewise, a change of 3 percentage points, or a change of 3%, in the average severity rate would change the gross loss reserve amount for such quarter by approximately $15 million.
We have no derivative financial instruments in our investment portfolio. As of December 31, 2023, 2022 and 2021, 98%, 98% and 97% of our investment portfolio was rated investment grade, respectively.
We have no derivative financial instruments in our investment portfolio. As of December 31, 2024, 2023 and 2022, 99%, 98% and 98% of our investment portfolio was rated investment grade, respectively.
We currently have no material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than the 2025 Senior Notes and the Facility. Financial Strength Ratings Ratings with respect to the financial strength of operating subsidiaries are an important factor in establishing the competitive position of insurance companies.
We currently have no material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity, other than the 2029 Notes and the Facility. 94 Financial Strength Ratings Ratings with respect to the financial strength of operating subsidiaries are an important factor in establishing the competitive position of insurance companies.
The following table presents the calculation of our RTC ratio for our principal insurance company, EMICO, as of the dates indicated: (Dollar amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 Statutory policyholders’ surplus $ 1,026 $ 1,084 $ 1,346 Contingency reserves 3,953 3,548 3,041 Combined statutory capital $ 4,979 $ 4,632 $ 4,387 Adjusted RIF (1) $ 57,788 $ 59,663 $ 54,033 EMICO risk-to-capital ratio 11.6 12.9 12.3 ______________ (1) Adjusted RIF for purposes of calculating EMICO statutory RTC differs from RIF presented elsewhere herein.
The following table presents the calculation of our RTC ratio for our principal insurance company, EMICO, as of the dates indicated: (Dollar amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 Statutory policyholders’ surplus $ 850 $ 1,026 $ 1,084 Contingency reserves 4,325 3,953 3,548 Combined statutory capital $ 5,175 $ 4,979 $ 4,632 Adjusted RIF (1) $ 54,418 $ 57,788 $ 59,663 EMICO risk-to-capital ratio 10.5 11.6 12.9 ______________ (1) Adjusted RIF for purposes of calculating EMICO statutory RTC differs from RIF presented elsewhere herein.
Certain states have insurance laws or regulations that require a mortgage insurer to maintain a minimum amount of statutory capital (including the statutory contingency reserve) relative to its level of RIF in order for the mortgage insurer to continue to write new business.
The statutory contingency reserve is reported as a liability on the statutory balance sheet. 93 Certain states have insurance laws or regulations that require a mortgage insurer to maintain a minimum amount of statutory capital (including the statutory contingency reserve) relative to its level of RIF in order for the mortgage insurer to continue to write new business.
The following table presents the calculation of our RTC ratio for our combined insurance subsidiaries as of the dates indicated: (Dollar amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 Statutory policyholders’ surplus $ 1,085 $ 1,136 $ 1,397 Contingency reserves 3,960 3,551 3,042 Combined statutory capital $ 5,045 $ 4,687 $ 4,439 Adjusted RIF (1) $ 58,277 $ 60,061 $ 54,201 Combined risk-to-capital ratio 11.6 12.8 12.2 ______________ (1) Adjusted RIF for purposes of calculating combined statutory RTC differs from RIF presented elsewhere herein.
The following table presents the calculation of our RTC ratio for our combined mortgage insurance subsidiaries as of the dates indicated: (Dollar amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 Statutory policyholders’ surplus $ 887 $ 1,085 $ 1,136 Contingency reserves 4,336 3,960 3,551 Combined statutory capital $ 5,223 $ 5,045 $ 4,687 Adjusted RIF (1) $ 55,001 $ 58,277 $ 60,061 Combined risk-to-capital ratio 10.5 11.6 12.8 ______________ (1) Adjusted RIF for purposes of calculating combined statutory RTC differs from RIF presented elsewhere herein.
In addition, the dividend strategies of our regulated operating subsidiaries are made in consultation with Genworth. During 2023, EMICO completed distributions of approximately $158 million and $185 million in April and November, respectively, that supported our ability to pay cash dividends.
In addition, the dividend strategies of our regulated operating subsidiaries are made in consultation with Genworth. During 2024, EMICO completed distributions of approximately $270 million and $230 million in March and November, respectively, that supported our ability to pay cash dividends.
Because our insurance premiums are earned over the life of a policy, higher or lower persistency rates can have a significant impact on our profitability. The rise of interest rates throughout 2022 and 2023 has significantly increased persistency in the portfolio, but this impact is partially offset by lower NIW.
Because our insurance premiums are earned over the life of a policy, higher or lower persistency rates can have a significant impact on our profitability. Recent elevated interest rates have increased persistency in the portfolio, but this impact is partially offset by lower NIW.
Liquidity and Capital Resources Cash Flows The following table summarizes our consolidated cash flows for the years ended December 31: (Amounts in thousands) 2023 2022 2021 Net cash provided by (used in): Operating activities $ 632,038 $ 560,510 $ 572,110 Investing activities (229,404) (220,255) (398,782) Financing activities (300,726) (252,308) (200,294) Net increase (decrease) in cash and cash equivalents $ 101,908 $ 87,947 $ (26,966) Our most significant source of operating cash flows is from premiums received from our insurance policies, while our most significant uses of operating cash flows are generally for claims paid on our insured policies and our operating expenses.
Liquidity and Capital Resources Cash Flows The following table summarizes our consolidated cash flows for the years ended December 31: (Amounts in thousands) 2024 2023 2022 Net cash provided by (used in): Operating activities $ 686,262 $ 632,038 $ 560,510 Investing activities (320,514) (229,404) (220,255) Financing activities (381,999) (300,726) (252,308) Net increase (decrease) in cash and cash equivalents $ (16,251) $ 101,908 $ 87,947 Our most significant source of operating cash flows is from premiums received from our insurance policies, while our most significant uses of operating cash flows are generally for claims paid on our insured policies and our operating expenses.
The following table presents primary NIW by LTV ratio for the years ended December 31: (Amounts in millions) 2023 2022 2021 95.01% and above $ 9,295 18 % $ 9,487 14 % $ 12,064 12 % 90.01% to 95.00% 19,861 37 26,008 39 36,597 38 85.01% to 90.00% 17,200 32 20,892 32 30,717 32 85.00% and below 6,725 13 10,098 15 17,626 18 Total $ 53,081 100 % $ 66,485 100 % $ 97,004 100 % The following table presents primary NIW by DTI ratio for the years ended December 31: (Amounts in millions) 2023 2022 2021 45.01% and above $ 15,600 29 % $ 16,541 25 % $ 14,979 15 % 38.01% to 45.00% 18,906 36 23,996 36 32,946 34 38.00% and below 18,575 35 25,948 39 49,079 51 Total $ 53,081 100 % $ 66,485 100 % $ 97,004 100 % We have continued to see a greater concentration of loans with higher DTI ratios.
The following table presents primary NIW by LTV ratio for the years ended December 31: (Amounts in millions) 2024 2023 2022 95.01% and above $ 10,129 20 % $ 9,295 18 % $ 9,487 14 % 90.01% to 95.00% 19,270 38 19,861 37 26,008 39 85.01% to 90.00% 15,609 30 17,200 32 20,892 32 85.00% and below 5,994 12 6,725 13 10,098 15 Total $ 51,002 100 % $ 53,081 100 % $ 66,485 100 % The following table presents primary NIW by DTI ratio for the years ended December 31: (Amounts in millions) 2024 2023 2022 45.01% and above $ 14,545 28 % $ 15,600 29 % $ 16,541 25 % 38.01% to 45.00% 18,711 37 18,906 36 23,996 36 38.00% and below 17,746 35 18,575 35 25,948 39 Total $ 51,002 100 % $ 53,081 100 % $ 66,485 100 % We have continued to see a greater concentration of loans with higher DTI ratios.
On May 1, 2023, we announced an increase of our quarterly dividend to $0.16 per share which was paid in June, September and December 2023. In February of 2024, we announced our first quarter dividend of $0.16 per share.
We paid quarterly dividends of $0.16 per share in June, September and December 2023 and March 2024. On May 1, 2024, we also announced an increase to our quarterly dividend to $0.185 per share which was paid in June, September and December 2024.
As of December 31, 2023, we had estimated available assets of $5,006 million against $3,119 million net required assets under PMIERs compared to available assets of $5,206 million against $3,156 million net required assets as of December 31, 2022.
As of December 31, 2024, we had estimated available assets of $5,095 million against $3,043 million net required assets under PMIERs compared to available assets of $5,006 million against $3,119 million net required assets as of December 31, 2023.
Net cash from operating activities increased largely due higher net investment income and lower expenses. Cash flows from operations were also impacted by changes in unearned premiums, net investment losses and stock-based compensation expense. Investing activities are primarily related to purchases, sales and maturities of our investment portfolio.
Net cash provided by operating activities increased largely due to higher net investment income and premiums. Cash flows from operations were also impacted by changes in reserves and unearned premiums. Investing activities are primarily related to purchases, sales and maturities of our investment portfolio.
(2) Includes the District of Columbia . 93 The table below sets forth our primary delinquency rates for the ten largest MSAs or MDs by our primary RIF as of December 31, 2023: Percent of RIF Percent of direct primary case reserves Delinquency rate By MSA or MD: Phoenix, AZ MSA 3 % 2 % 2.01 % Chicago-Naperville, IL MD 3 4 2.88 % Atlanta, GA MSA 3 3 2.40 % New York, NY MD 2 7 3.60 % Washington-Arlington, DC MD 2 2 2.01 % Houston, TX MSA 2 3 2.67 % Los Angeles-Long Beach, CA MD 2 2 2.39 % Dallas, TX MD 2 2 1.92 % Riverside-San Bernardino, CA MSA 2 3 2.83 % Denver-Aurora-Lakewood, CO MSA 2 1 1.12 % All Other MSAs/MDs 77 71 2.01 % Total 100 % 100 % 2.10 % The table below sets forth our primary delinquency rates for the ten largest MSAs or MDs by our primary RIF as of December 31, 2022: Percent of RIF Percent of direct primary case reserves Delinquency rate By MSA or MD: Chicago-Naperville, IL MD 3 % 5 % 2.84 % Phoenix, AZ MSA 3 2 1.83 % New York, NY MD 3 8 3.75 % Atlanta, GA MSA 2 3 2.42 % Washington-Arlington, DC MD 2 2 1.85 % Houston, TX MSA 2 3 2.60 % Riverside-San Bernardino, CA MSA 2 2 2.89 % Los Angeles-Long Beach, CA MD 2 2 2.18 % Dallas, TX MD 2 1 1.86 % Denver-Aurora-Lakewood, CO MSA 2 1 1.12 % All Other MSAs/MDs 77 71 2.00 % Total 100 % 100 % 2.08 % 94 The table below sets forth our primary delinquency rates for the ten largest MSAs or MDs by our primary RIF as of December 31, 2021: Percent of RIF Percent of direct primary case reserves Delinquency rate By MSA or MD: Chicago-Naperville, IL MD 3 % 4 % 3.68 % Phoenix, AZ MSA 3 2 2.36 % New York, NY MD 3 8 5.32 % Atlanta, GA MSA 2 3 3.28 % Washington-Arlington, DC MD 2 2 2.96 % Houston, TX MSA 2 3 3.61 % Riverside-San Bernardino, CA MSA 2 2 3.42 % Los Angeles-Long Beach, CA MD 2 3 3.95 % Dallas, TX MD 2 2 2.31 % Nassau County, NY MD 2 4 5.55 % All Other MSAs/MDs 77 67 2.44 % Total 100 % 100 % 2.65 % The number of delinquencies often does not correlate directly with the number of claims received because delinquencies may cure.
The table below sets forth our primary delinquency rates for the ten largest MSAs or MDs by our primary RIF as of December 31, 2024: Percent of RIF Percent of direct primary case reserves Delinquency rate By MSA or MD: Phoenix, AZ MSA 3 % 3 % 2.41 % Chicago-Naperville, IL MD 3 4 3.29 % Atlanta, GA MSA 3 3 3.02 % New York, NY MD 2 6 3.53 % Houston, TX MSA 2 3 3.58 % Dallas, TX MD 2 2 2.38 % Washington-Arlington, DC MD 2 2 2.03 % Riverside-San Bernardino, CA MSA 2 3 3.25 % Los Angeles-Long Beach, CA MD 2 2 2.65 % Denver-Aurora-Lakewood, CO MSA 2 1 1.38 % All Other MSAs/MDs 77 71 2.35 % Total 100 % 100 % 2.45 % 86 The table below sets forth our primary delinquency rates for the ten largest MSAs or MDs by our primary RIF as of December 31, 2023: Percent of RIF Percent of direct primary case reserves Delinquency rate By MSA or MD: Phoenix, AZ MSA 3 % 2 % 2.01 % Chicago-Naperville, IL MD 3 4 2.88 % Atlanta, GA MSA 3 3 2.40 % New York, NY MD 2 7 3.60 % Washington-Arlington, DC MD 2 2 2.01 % Houston, TX MSA 2 3 2.67 % Los Angeles-Long Beach, CA MD 2 2 2.39 % Dallas, TX MD 2 2 1.92 % Riverside-San Bernardino, CA MSA 2 3 2.83 % Denver-Aurora-Lakewood, CO MSA 2 1 1.12 % All Other MSAs/MDs 77 71 2.01 % Total 100 % 100 % 2.10 % The table below sets forth our primary delinquency rates for the ten largest MSAs or MDs by our primary RIF as of December 31, 2022: Percent of RIF Percent of direct primary case reserves Delinquency rate By MSA or MD: Chicago-Naperville, IL MD 3 % 5 % 2.84 % Phoenix, AZ MSA 3 2 1.83 % New York, NY MD 3 8 3.75 % Atlanta, GA MSA 2 3 2.42 % Washington-Arlington, DC MD 2 2 1.85 % Houston, TX MSA 2 3 2.60 % Riverside-San Bernardino, CA MSA 2 2 2.89 % Los Angeles-Long Beach, CA MD 2 2 2.18 % Dallas, TX MD 2 1 1.86 % Denver-Aurora-Lakewood, CO MSA 2 1 1.12 % All Other MSAs/MDs 77 71 2.00 % Total 100 % 100 % 2.08 % The number of delinquencies often does not correlate directly with the number of claims received because delinquencies may cure.
The following table sets forth the dispersion of primary RIF and loss reserves by policy year and delinquency rates as of December 31, 2022: Percent of RIF Percent of direct primary case reserves Delinquency rate Cumulative delinquency rate (1) Policy year: 2008 and prior 3 % 26 % 9.61 % 5.57 % 2009-2014 1 4 5.01 % 0.69 % 2015 1 3 3.61 % 0.71 % 2016 3 6 3.17 % 0.81 % 2017 3 7 3.78 % 1.01 % 2018 3 9 4.63 % 1.18 % 2019 7 11 2.71 % 0.93 % 2020 22 17 1.47 % 0.92 % 2021 32 14 1.20 % 1.06 % 2022 25 3 0.54 % 0.52 % Total portfolio 100 % 100 % 2.08 % 4.26 % ______________ (1) Calculated as the sum of the number of policies where claims were ever paid to date and number of policies for loans currently in default divided by policies ever in-force. 96 The following table sets forth the dispersion of primary RIF and loss reserves by policy year and delinquency rates as of December 31, 2021: Percent of RIF Percent of direct primary case reserves Delinquency rate Cumulative delinquency rate (1) Policy year: 2008 and prior 3 % 24 % 10.54 % 5.59 % 2009-2013 1 2 5.54 % 0.74 % 2014 1 3 5.51 % 0.99 % 2015 2 5 4.24 % 1.04 % 2016 4 8 3.69 % 1.16 % 2017 4 10 4.78 % 1.56 % 2018 4 13 5.93 % 1.88 % 2019 10 19 3.89 % 1.68 % 2020 31 14 1.50 % 1.14 % 2021 40 2 0.37 % 0.36 % Total portfolio 100 % 100 % 2.65 % 4.42 % ______________ (1) Calculated as the sum of the number of policies where claims were ever paid to date and number of policies for loans currently in default divided by policies ever in-force.
The following table sets forth the dispersion of primary RIF and loss reserves by policy year and delinquency rates as of December 31, 2023: Percent of RIF Percent of direct primary case reserves Delinquency rate Cumulative delinquency rate (1) Policy year: 2008 and prior 2 % 18 % 8.61 % 5.56 % 2009-2015 1 4 4.55 % 0.63 % 2016 2 4 3.20 % 0.67 % 2017 2 5 3.59 % 0.87 % 2018 2 6 4.42 % 1.02 % 2019 5 8 2.77 % 0.85 % 2020 17 15 1.70 % 0.90 % 2021 27 21 1.65 % 1.29 % 2022 22 16 1.57 % 1.46 % 2023 20 3 0.47 % 0.46 % Total portfolio 100 % 100 % 2.10 % 4.19 % ______________ (1) Calculated as the sum of the number of policies where claims were ever paid to date and number of policies for loans currently in default divided by policies ever in-force. 88 The following table sets forth the dispersion of primary RIF and loss reserves by policy year and delinquency rates as of December 31, 2022: Percent of RIF Percent of direct primary case reserves Delinquency rate Cumulative delinquency rate (1) Policy year: 2008 and prior 3 % 26 % 9.61 % 5.57 % 2009-2014 1 4 5.01 % 0.69 % 2015 1 3 3.61 % 0.71 % 2016 3 6 3.17 % 0.81 % 2017 3 7 3.78 % 1.01 % 2018 3 9 4.63 % 1.18 % 2019 7 11 2.71 % 0.93 % 2020 22 17 1.47 % 0.92 % 2021 32 14 1.20 % 1.06 % 2022 25 3 0.54 % 0.52 % Total portfolio 100 % 100 % 2.08 % 4.26 % ______________ (1) Calculated as the sum of the number of policies where claims were ever paid to date and number of policies for loans currently in default divided by policies ever in-force.
At any time on or after February 15, 2025, we may redeem the 2025 Senior Notes, in whole or in part, at our option, at 100% of the principal amount, plus accrued and unpaid interest.
At any time on or after April 28, 2029, we may redeem the 2029 Notes, in whole or in part, at our option, at 100% of the principal amount, plus accrued and unpaid interest.
Subsequent to year end, on January 30, 2024, we executed an excess-of-loss reinsurance transaction with a panel of reinsurers, which provides up to $255 million of reinsurance coverage on a portion of current and expected new insurance written for the 2024 book year, effective January 1, 2024. Capital returns.
On January 30, 2024, we executed an excess-of-loss reinsurance transaction with a panel of reinsurers, which, following an amendment in December 2024, provides up to $270 million of reinsurance coverage on a portion of current and expected new insurance written for the 2024 book year, effective January 1, 2024.
We also consider the dividend payout ratio, or the ratio of potential future dividends compared to the estimated U.S. GAAP net income, in the evaluation of our dividend strategies.
We consider potential future dividends compared to the prior year statutory net income in the evaluation of dividend strategies for our regulated operating subsidiaries. We also consider the dividend payout ratio, or the ratio of potential future dividends compared to the estimated U.S. GAAP net income, in the evaluation of our dividend strategies.
In most cases, delinquencies that are not cured result in a claim under our policy. 89 The following table shows a roll forward of the number of primary loans in default for the years ended December 31: (Loan count) 2023 2022 2021 Number of delinquencies, beginning of period 19,943 24,820 44,904 New defaults 41,617 35,996 32,624 Cures (40,475) (40,278) (51,626) Claims paid (615) (574) (1,050) Rescissions and claim denials (38) (21) (32) Number of delinquencies, end of period 20,432 19,943 24,820 The following table sets forth changes in our direct primary case loss reserves for the years ended December 31: (Amounts in thousands) (1) 2023 2022 2021 Loss reserves, beginning of period $ 479,343 $ 606,102 $ 516,863 Claims paid (23,357) (28,123) (32,816) Increase in reserves 20,723 (98,636) 122,055 Loss reserves, end of period $ 476,709 $ 479,343 $ 606,102 ______________ (1) Direct primary case reserves exclude LAE, pool, IBNR and reinsurance reserves.
In most cases, delinquencies that are not cured result in a claim under our policy. 82 The following table shows a roll forward of the number of primary loans in default for the years ended December 31: (Loan count) 2024 2023 2022 Number of delinquencies, beginning of period 20,432 19,943 24,820 New defaults 48,537 41,617 35,996 Cures (44,611) (40,475) (40,278) Claims paid (743) (615) (574) Rescissions and claim denials (49) (38) (21) Number of delinquencies, end of period 23,566 20,432 19,943 The following table sets forth changes in our direct primary case loss reserves for the years ended December 31: (Amounts in thousands) (1) 2024 2023 2022 Loss reserves, beginning of period $ 476,709 $ 479,343 $ 606,102 Claims paid (30,550) (23,357) (28,123) Increase in reserves 25,951 20,723 (98,636) Loss reserves, end of period $ 472,110 $ 476,709 $ 479,343 ______________ (1) Direct primary case reserves exclude LAE, pool, IBNR and reinsurance reserves.
Investments Valuation of Fixed Maturity Securities Our portfolio of fixed maturity securities was valued at $5,266 million as of December 31, 2023, an increase of $381 million from December 31, 2022.
Investments Valuation of Fixed Maturity Securities Our portfolio of fixed maturity securities was valued at $5,625 million as of December 31, 2024, an increase of $359 million from December 31, 2023.
We cannot predict with any certainty the impact to us from any future disruptions in the credit markets or downgrades by one or more of the rating agencies of the financial strength ratings of our insurance company subsidiaries and/or the credit ratings of our holding company as a result of the impact of the COVID-19 pandemic, the ensuing economic uncertainty or otherwise.
We cannot predict with any certainty the impact to us from any future disruptions in the credit markets or downgrades by one or more of the rating agencies of the financial strength ratings of our insurance company subsidiaries and/or the credit ratings of our holding company.
The following table shows incurred losses related to current and prior accident years for the years ended December 31: (Amounts in thousands) 2023 2022 2021 Losses and LAE incurred related to current accident year $ 275,418 $ 219,461 $ 141,225 Losses and LAE incurred related to prior accident years (248,214) (313,652) (15,822) Total incurred (1) $ 27,204 $ (94,191) $ 125,403 _______________ (1) Excludes run-off business.
The following table shows incurred losses related to current and prior accident years for the years ended December 31: (Amounts in thousands) 2024 2023 2022 Losses and LAE incurred related to current accident year $ 289,482 $ 275,418 $ 219,461 Losses and LAE incurred related to prior accident years (258,180) (248,214) (313,652) Total incurred (1) $ 31,302 $ 27,204 $ (94,191) _______________ (1) Excludes run-off business.
Fixed Maturity Securities Available-for-Sale The following table presents the fair value of our fixed maturity securities available-for-sale as of the dates indicated: December 31, 2023 December 31, 2022 December 31, 2021 (Amounts in thousands) Fair value % of total Fair value % of total Fair value % of total U.S. government, agencies and GSEs $ 195,129 3.7 % $ 44,769 0.9 % $ 58,408 1.1 % State and political subdivisions 438,214 8.3 419,856 8.6 538,453 10.2 Non-U.S. government 11,467 0.2 9,349 0.2 22,416 0.4 U.S. corporate 2,723,730 51.8 2,646,863 54.2 2,945,303 55.9 Non-U.S. corporate 689,663 13.1 652,844 13.4 666,594 12.7 Residential mortgage-backed 10,755 0.2 11,043 0.2 — — Other asset-backed 1,197,183 22.7 1,100,036 22.5 1,035,165 19.7 Total available-for-sale fixed maturity securities $ 5,266,141 100.0 % $ 4,884,760 100.0 % $ 5,266,339 100.0 % Our investment portfolio did not include any direct residential real estate or whole mortgage loans as of December 31, 2023, December 31, 2022 or December 31, 2021.
Fixed Maturity Securities Available-for-Sale The following table presents the fair value of our fixed maturity securities available-for-sale as of the dates indicated: December 31, 2024 December 31, 2023 December 31, 2022 (Amounts in thousands) Fair value % of total Fair value % of total Fair value % of total U.S. government, agencies and GSEs $ 277,363 4.9 % $ 195,129 3.7 % $ 44,769 0.9 % State and political subdivisions 467,476 8.3 438,214 8.3 419,856 8.6 Non-U.S. government 83,802 1.5 11,467 0.2 9,349 0.2 U.S. corporate 2,825,679 50.2 2,723,730 51.8 2,646,863 54.2 Non-U.S. corporate 772,624 13.7 689,663 13.1 652,844 13.4 Residential mortgage-backed 8,364 0.2 10,755 0.2 11,043 0.2 Other asset-backed 1,189,465 21.2 1,197,183 22.7 1,100,036 22.5 Total available-for-sale fixed maturity securities $ 5,624,773 100.0 % $ 5,266,141 100.0 % $ 4,884,760 100.0 % Our investment portfolio did not include any direct residential real estate or whole mortgage loans as of December 31, 2024, December 31, 2023 or December 31, 2022.
The following table sets forth selected operating performance measures on a primary basis as of or for the years ended December 31: (Dollar amounts in millions) 2023 2022 2021 New insurance written $53,081 $66,485 $97,004 Primary insurance in-force (1) $262,937 $248,262 $226,514 Primary risk in-force $67,529 $62,791 $56,881 Persistency rate 85 % 80 % 62 % Primary policies in-force (count) 974,516 960,306 937,350 Delinquent loans (count) 20,432 19,943 24,820 Delinquency rate 2.10 % 2.08 % 2.65 % _______________ (1) Represents the aggregate unpaid principal balance for loans we insure.
The following table sets forth selected operating performance measures on a primary basis as of or for the years ended December 31: (Dollar amounts in millions) 2024 2023 2022 New insurance written $51,002 $53,081 $66,485 Primary insurance in-force (1) $268,825 $262,937 $248,262 Primary risk in-force $69,985 $67,529 $62,791 Persistency rate 83 % 85 % 80 % Primary policies in-force (count) 962,849 974,516 960,306 Delinquent loans (count) 23,566 20,432 19,943 Delinquency rate 2.45 % 2.10 % 2.08 % _______________ (1) Represents the aggregate unpaid principal balance for loans we insure.
For additional details see Note 7 to our consolidated financial statements. 81 Provision for income taxes The effective tax rate was 21.8% and 21.6% for the years ended December 31, 2023 and 2022, respectively, consistent with the United States corporate federal income tax rate. Use of Non-GAAP Financial Measures We use a non-U.S.
Provision for income taxes The effective tax rate was 21.6% and 21.8% for the years ended December 31, 2024 and 2023, respectively, consistent with the United States corporate federal income tax rate. Use of Non-GAAP Financial Measures We use a non-U.S.
The following table sets forth primary IIF by DTI score at origination as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 45.01% and above $ 53,440 20 % $ 43,831 18 % $ 34,076 15 % 38.01% to 45.00% 93,871 36 87,816 35 79,147 35 38.00% and below 115,626 44 116,615 47 113,291 50 Total $ 262,937 100 % $ 248,262 100 % $ 226,514 100 % The following table sets forth primary RIF by DTI score at origination as of the dates indicated: (Amounts in millions) December 31, 2023 December 31, 2022 December 31, 2021 45.01% and above $ 13,830 20 % $ 11,176 18 % $ 8,631 15 % 38.01% to 45.00% 24,072 36 22,268 35 19,974 35 38.00% and below 29,627 44 29,347 47 28,276 50 Total $ 67,529 100 % $ 62,791 100 % $ 56,881 100 % Delinquent loans and claims Our delinquency management process begins with notification by the loan servicer of a delinquency on an insured loan.
The following table sets forth primary IIF by DTI score at origination as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 45.01% and above $ 59,864 22 % $ 53,440 20 % $ 43,831 18 % 38.01% to 45.00% 97,361 36 93,871 36 87,816 35 38.00% and below 111,600 42 115,626 44 116,615 47 Total $ 268,825 100 % $ 262,937 100 % $ 248,262 100 % The following table sets forth primary RIF by DTI score at origination as of the dates indicated: (Amounts in millions) December 31, 2024 December 31, 2023 December 31, 2022 45.01% and above $ 15,674 22 % $ 13,830 20 % $ 11,176 18 % 38.01% to 45.00% 25,226 36 24,072 36 22,268 35 38.00% and below 29,085 42 29,627 44 29,347 47 Total $ 69,985 100 % $ 67,529 100 % $ 62,791 100 % Delinquent loans and claims Our delinquency management process begins with notification by the loan servicer of a delinquency on an insured loan.
The following table presents our NIW, number of cures and new delinquencies for primary policies, excluding our run-off insurance block with reference properties in Mexico, for the periods indicated: Seasonality Three months ended (Dollar amounts in millions) Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 NIW $18,823 $17,448 $15,069 $15,145 $13,154 $15,083 $14,391 $10,453 % Change (12.2)% (7.3)% (13.6)% 0.5% (13.1)% 14.7% (4.6)% (27.4)% Cure Counts 10,860 10,806 9,588 9,024 10,771 9,609 9,778 10,317 % Change (9.0)% (0.5)% (11.3)% (5.9)% 19.4% (10.8)% 1.8% 5.5% New Delinquency Count 8,724 7,847 9,121 10,304 9,599 9,205 11,107 11,706 % Change 5.3% (10.1)% 16.2% 13.0% (6.8)% (4.1)% 20.7% 5.4% NIW NIW occurs when a lender activates mortgage insurance coverage on a closed mortgage loan.
The following table presents our NIW, number of cures and new delinquencies for primary policies, excluding our run-off insurance block with reference properties in Mexico, for the periods indicated: Seasonality Three months ended (Dollar amounts in millions) Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Dec 31, 2024 NIW $13,154 $15,083 $14,391 $10,453 $10,526 $13,619 $13,591 $13,266 % Change (13.1)% 14.7% (4.6)% (27.4)% 0.7% 29.4% (0.2)% (2.4)% Cure Counts 10,771 9,609 9,778 10,317 12,160 10,731 10,749 10,971 % Change 19.4% (10.8)% 1.8% 5.5% 17.9% (11.8)% 0.2% 2.1% New Delinquency Count 9,599 9,205 11,107 11,706 11,395 10,461 12,964 13,717 % Change (6.8)% (4.1)% 20.7% 5.4% (2.7)% (8.2)% 23.9% 5.8% NIW NIW occurs when a lender activates mortgage insurance coverage on a closed mortgage loan.
Detailed discussions of our consolidated results of operations for the year ended December 31, 2021, including the year-over-year comparisons between 2022 and 2021, that are not included in this Annual Report on Form 10-K can be found in Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023. 80 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues Premiums increased mainly attributable to higher average IIF.
Detailed discussions of our consolidated results of operations for the year ended December 31, 2022, including the year-over-year comparisons between 2023 and 2022, that are not included in this Annual Report on Form 10-K can be found in Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.
For our less liquid securities, 73 such as our privately placed securities, we utilize independent market data to employ alternative valuation methods commonly used in the financial services industry to estimate fair value. Based on the market observability of the inputs used in estimating the fair value, the pricing level is assigned.
For our less liquid securities, such as our privately placed securities, we utilize independent market data to employ alternative valuation methods commonly used in the financial services industry to estimate fair value.
Incurred losses depend to a significant extent on the following factors: • deterioration of regional or national economic conditions leading to a reduction in borrowers’ income and thus their ability to make mortgage payments; • legislative, regulatory, FHFA or GSE action, or executive orders permitting or mandating forbearance or a moratorium on foreclosures or evictions due to events such as natural disasters or COVID-19; • a drop in housing values that could expose us to greater loss on resale of properties obtained through foreclosure proceedings and an adverse change in the effectiveness of loss mitigation actions that could result in an increase in the frequency of expected claim rates; • a drop in housing values that negatively impacts a borrower’s willingness to continue mortgage payments, potentially leading to higher delinquencies and ultimately claims; • if the foreclosure occurs in a state that imposes judicial process, which generally increases the amount of time it takes for a foreclosure to be completed, which impacts severity of the claim; • the credit characteristics in our in-force portfolio, as loans with higher risk characteristics generally result in more delinquencies and claims; • the size of loans we insure, as loans with relatively higher average loan amounts generally result in higher incurred losses; • the coverage percentage on insured loans, as loans with higher percentages of insurance coverage generally correlate with higher incurred losses; 71 • the level and amount of reinsurance coverage maintained with third parties; and • the distribution of claims over the life of a book.
COVID-19); • a drop in housing values that could expose us to greater loss on resale of properties obtained through foreclosure proceedings and an adverse change in the effectiveness of loss mitigation actions that could result in an increase in the frequency of expected claim rates; • a drop in housing values that negatively impacts a borrower’s willingness to continue mortgage payments, potentially leading to higher delinquencies and ultimately claims; • if the foreclosure occurs in a state that imposes judicial process, which generally increases the amount of time it takes for a foreclosure to be completed, which impacts severity of the claim; • the credit characteristics in our in-force portfolio, as loans with higher risk characteristics generally result in more delinquencies and claims; • the size of loans we insure, as loans with relatively higher average loan amounts generally result in higher incurred losses; • the coverage percentage on insured loans, as loans with higher percentages of insurance coverage generally correlate with higher incurred losses; • the level and amount of reinsurance coverage maintained with third parties; and 66 • the distribution of claims over the life of a book.
The following tables set forth primary delinquencies, direct primary case reserves and RIF by aged missed payment status as of the dates indicated: December 31, 2023 (Dollar amounts in millions) Delinquencies Direct primary case reserves (1) Risk in-force Reserves as % of risk in-force Payments in default: 3 payments or less 10,166 $ 88 $ 629 14 % 4 - 11 payments 6,934 205 469 44 % 12 payments or more 3,332 184 200 92 % Total 20,432 $ 477 $ 1,298 37 % December 31, 2022 (Dollar amounts in millions) Delinquencies Direct primary case reserves (1) Risk in-force Reserves as % of risk in-force Payments in default: 3 payments or less 8,920 $ 69 $ 509 14 % 4 - 11 payments 6,466 166 390 43 % 12 payments or more 4,557 244 248 98 % Total 19,943 $ 479 $ 1,147 42 % ______________ (1) Direct primary case reserves exclude LAE, pool, IBNR and reinsurance reserves. 90 December 31, 2021 (Dollar amounts in millions) Delinquencies Direct primary case reserves (1) Risk in-force Reserves as % of risk in-force Payments in default: 3 payments or less 6,586 $ 35 $ 340 10 % 4 - 11 payments 7,360 111 426 26 % 12 payments or more 10,874 460 643 72 % Total 24,820 $ 606 $ 1,409 43 % ______________ (1) Direct primary case reserves exclude LAE, pool, IBNR and reinsurance reserves.
The following tables set forth primary delinquencies, direct primary case reserves and RIF by aged missed payment status as of the dates indicated: December 31, 2024 (Dollar amounts in millions) Delinquencies Direct primary case reserves (1) Risk in-force Reserves as % of risk in-force Payments in default: 3 payments or less 12,712 $ 108 $ 849 13 % 4 - 11 payments 7,701 191 545 35 % 12 payments or more 3,153 173 213 81 % Total 23,566 $ 472 $ 1,607 29 % December 31, 2023 (Dollar amounts in millions) Delinquencies Direct primary case reserves (1) Risk in-force Reserves as % of risk in-force Payments in default: 3 payments or less 10,166 $ 88 $ 629 14 % 4 - 11 payments 6,934 205 469 44 % 12 payments or more 3,332 184 200 92 % Total 20,432 $ 477 $ 1,298 37 % ______________ (1) Direct primary case reserves exclude LAE, pool, IBNR and reinsurance reserves. 83 December 31, 2022 (Dollar amounts in millions) Delinquencies Direct primary case reserves (1) Risk in-force Reserves as % of risk in-force Payments in default: 3 payments or less 8,920 $ 69 $ 509 14 % 4 - 11 payments 6,466 166 390 43 % 12 payments or more 4,557 244 248 98 % Total 19,943 $ 479 $ 1,147 42 % ______________ (1) Direct primary case reserves exclude LAE, pool, IBNR and reinsurance reserves.
These reductions in earned premiums could be potentially offset by lower reserves due to policies no longer being in-force. 74 Trends and Conditions Macroeconomic environment. During 2023, the United States economy faced uncertainty due to continued but lessening inflationary pressure, the geopolitical environment and persistent concerns around a possible recession.
These reductions in earned premiums could be potentially offset by lower reserves due to policies no longer being in-force. 69 Trends and Conditions Macroeconomic environment. During 2024, the United States economy continued to show positive signs, but faced lingering uncertainty due to inflationary pressure, the geopolitical environment and other macroeconomic concerns.
See Notes 2, 3 and 4 to our consolidated financial statements for additional information related to the valuation of fixed maturity securities and a description of the fair value measurement estimates and level assignments.
Based on the market observability of the inputs used in estimating the fair value, the pricing level is assigned. 68 See Notes 2, 3 and 4 to our consolidated financial statements for additional information related to the valuation of fixed maturity securities and a description of the fair value measurement estimates and level assignments.
Under PMIERs, EMICO is subject to operational and financial requirements that approved insurers must meet in order to remain eligible to insure loans purchased by the GSEs. Our regulated insurance operating subsidiaries are also subject to statutory RTC requirements that affect the dividend strategies of our regulated operating subsidiaries.
Another consideration in the development of the dividend strategies for our regulated insurance operating subsidiaries is our expected level of compliance with PMIERs. Under PMIERs, EMICO is 92 subject to operational and financial requirements that approved insurers must meet in order to remain eligible to insure loans purchased by the GSEs.
The table below sets forth our primary delinquency rates for the ten largest states by our primary RIF as of December 31, 2021: Percent of RIF Percent of direct primary case reserves Delinquency rate By state: California 11 % 12 % 3.17 % Texas 8 8 2.89 % Florida (1) 7 9 2.97 % New York (1) 5 12 3.80 % Illinois (1) 5 6 3.09 % Michigan 4 2 1.87 % Arizona 4 2 2.31 % North Carolina 3 2 2.18 % Pennsylvania (1) 3 3 2.38 % Washington 3 3 2.98 % All other states (2) 47 41 2.46 % Total 100 % 100 % 2.65 % ______________ (1) Jurisdiction predominantly uses a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.
The table 84 below sets forth our primary delinquency rates for the ten largest states by our primary RIF as of December 31, 2024: Percent of RIF Percent of direct primary case reserves Delinquency rate By state: California 12 % 12 % 2.53 % Texas 9 9 2.64 % Florida (1) 8 12 3.67 % New York (1) 5 10 3.30 % Illinois (1) 4 6 2.96 % Arizona 4 3 2.35 % Michigan 4 3 2.14 % Georgia 3 4 3.02 % North Carolina 3 2 2.14 % Pennsylvania 3 3 2.17 % All other states (2) 45 36 2.10 % Total 100 % 100 % 2.45 % ______________ (1) Jurisdiction predominantly uses a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.
Future dividend payments are subject to quarterly review and approval by our Board of Directors and Genworth and will be targeted to be paid in the third month of each subsequent quarter. In April and November 2023, our primary mortgage insurance operating company, EMICO, completed distributions to EHI that supported our ability to pay dividends in 2023.
In November 2024 EMICO completed a distribution to EHI that supports our ability to pay a quarterly dividend. Future dividend payments are subject to quarterly review and approval by our Board of Directors and Genworth and will be targeted to be paid in the third month of each quarter.
As of December 31, 2023, our 2016 and newer policy years represented approximately 97% of our primary RIF and 78% of our total direct primary case reserves.
As of December 31, 2024, our 2017 and newer policy years represented approximately 96% of our primary RIF and 84% of our total direct primary case reserves.
No other customer accounted for 10% or more of total revenues or NIW for the year ended December 31, 2023. This customer also accounted for 18% and 14% of our total NIW during the years ended December 31, 2022 and 2021, respectively.
No other customer accounted for 10% or more of total revenues or NIW for the years ended December 31, 2024 or 2023. No customer accounted for more than 10% of our total revenues and no other customer accounted for more than 10% of NIW for the year ended December 31, 2022. Loss experience.
The following table presents NIW by product for the years ended December 31: (Amounts in millions) 2023 2022 2021 Primary $ 53,081 100 % $ 66,485 100 % $ 97,004 100 % Pool — — — — — — Total $ 53,081 100 % $ 66,485 100 % $ 97,004 100 % The following table presents primary NIW by underlying type of mortgage for the years ended December 31: (Amounts in millions) 2023 2022 2021 Purchases $ 51,723 97 % $ 63,506 96 % $ 76,915 79 % Refinances 1,358 3 2,979 4 20,089 21 Total $ 53,081 100 % $ 66,485 100 % $ 97,004 100 % The following table presents primary NIW by policy payment type for the years ended December 31: (Amounts in millions) 2023 2022 2021 Monthly $ 51,869 98 % $ 61,123 92 % $ 89,115 92 % Single 1,114 2 5,166 8 7,554 8 Other 98 — 196 — 335 — Total $ 53,081 100 % $ 66,485 100 % $ 97,004 100 % We have seen a decline in NIW on single policies as a result of a reduction in the market for single policies driven by higher mortgage rates. 84 The following table presents primary NIW by FICO score for the years ended December 31: (Amounts in millions) 2023 2022 2021 Over 760 $ 24,680 46 % $ 30,239 45 % $ 42,391 44 % 740-759 8,994 17 11,264 17 15,067 16 720-739 7,220 14 9,377 14 12,911 13 700-719 5,214 10 6,889 10 11,069 11 680-699 3,652 7 4,535 7 8,457 9 660-679 (1) 2,086 4 2,534 4 4,167 4 640-659 952 2 1,206 2 2,173 2 620-639 268 — 424 1 765 1 15 — 17 — 4 — Total $ 53,081 100 % $ 66,485 100 % $ 97,004 100 % ______________ (1) Loans with unknown FICO scores are included in the 660-679 category.
The following table presents NIW by product for the years ended December 31: (Amounts in millions) 2024 2023 2022 Primary $ 51,002 100 % $ 53,081 100 % $ 66,485 100 % Pool — — — — — — Total $ 51,002 100 % $ 53,081 100 % $ 66,485 100 % The following table presents primary NIW by underlying type of mortgage for the years ended December 31: (Amounts in millions) 2024 2023 2022 Purchases $ 47,693 94 % $ 51,723 97 % $ 63,506 96 % Refinances 3,309 6 1,358 3 2,979 4 Total $ 51,002 100 % $ 53,081 100 % $ 66,485 100 % The following table presents primary NIW by policy payment type for the years ended December 31: (Amounts in millions) 2024 2023 2022 Monthly $ 48,830 96 % $ 51,869 98 % $ 61,123 92 % Single 2,102 4 1,114 2 5,166 8 Other 70 — 98 — 196 — Total $ 51,002 100 % $ 53,081 100 % $ 66,485 100 % 77 The following table presents primary NIW by FICO score for the years ended December 31: (Amounts in millions) 2024 2023 2022 Over 760 $ 24,843 49 % $ 24,680 46 % $ 30,239 45 % 740-759 8,096 16 8,994 17 11,264 17 720-739 6,768 13 7,220 14 9,377 14 700-719 4,932 10 5,214 10 6,889 10 680-699 3,237 6 3,652 7 4,535 7 660-679 (1) 1,759 3 2,086 4 2,534 4 640-659 972 2 952 2 1,206 2 620-639 369 1 268 — 424 1 26 — 15 — 17 — Total $ 51,002 100 % $ 53,081 100 % $ 66,485 100 % ______________ (1) Loans with unknown FICO scores are included in the 660-679 category.
New insurance written NIW for the year ended December 31, 2023 decreased 20% compared to 2022 primarily due to a smaller private mortgage insurance market as both refinancing and purchase originations were impacted by elevated mortgage rates. We manage the quality of new business through pricing and our underwriting guidelines, which we modify from time to time as circumstances warrant.
New insurance written NIW for the year ended December 31, 2024 decreased 4% compared to 2023. Changes in NIW are primarily impacted by the size of the mortgage insurance market and our market share. We manage the quality of new business through pricing and our underwriting guidelines, which we modify from time to time as circumstances warrant.
The unemployment rate was 3.7% as of December 2023 compared to 3.5% in December 2022. As of December 31, 2023, the number of unemployed Americans stands at approximately 6.3 million and the number of long term unemployed over 26 weeks was approximately 1.2 million. Both metrics remain relatively in line with February 2020 levels. Forbearance and loss mitigation programs.
The unemployment rate was 4.1% as of December 31, 2024, compared to 3.7% in December 2023. As of December 31, 2024, the number of unemployed Americans was approximately 6.9 million and the number of long term unemployed over 26 weeks was approximately 1.6 million. Forbearance and loss mitigation programs.
The application of the 0.30 multiplier to all eligible delinquencies provided $73 million of benefit to our December 31, 2023, PMIERs required assets compared to $132 million of benefit as of December 31, 2022. These amounts are gross of any incremental reinsurance benefit from the elimination of the 0.30 multiplier.
The application of the 0.30 multiplier to all eligible delinquencies provided $28 million of benefit to our December 31, 2024, PMIERs required assets compared to $73 million of benefit as of December 31, 2023.
On August 1, 2023, we announced the authorization of a new share repurchase program which allows for the repurchase of up to an additional $100 million of EHI’s common stock.
On May 1, 2024, we announced the authorization of a share repurchase program that allows for the repurchase of up to $250 million of EHI’s common stock.
EMICO’s domiciliary regulator, the NCDOI, requires the maintenance of a statutory RTC ratio not to exceed 25:1. See “—Risk-to-Capital Ratio” for additional RTC trend analysis. We consider potential future dividends compared to the prior year statutory net income in the evaluation of dividend strategies for our regulated operating subsidiaries.
Our regulated insurance operating subsidiaries are also subject to statutory RTC requirements that affect the dividend strategies of our regulated operating subsidiaries. EMICO’s domiciliary regulator, the NCDOI, requires the maintenance of a statutory RTC ratio not to exceed 25:1. See “—Risk-to-Capital Ratio” for additional RTC trend analysis.
Under certain stress scenarios, our incurred losses are also reduced by any incurred losses ceded in accordance with our reinsurance agreements. Operating Expenses Our operating expenses include costs related to the acquisition and ongoing maintenance of our insurance contracts, including sales, underwriting and general operating costs. Acquisition expenses are influenced by the amount of our NIW.
Operating Expenses Our operating expenses include costs related to the acquisition and ongoing maintenance of our insurance contracts, including sales, underwriting and general operating costs. Acquisition expenses are influenced by the amount of our NIW.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2023, the effective duration of our investments available-for-sale was 3.5 years, which means that an instantaneous parallel shift (movement up or down) in the yield curve of 100 basis points would result in a change of 3.5% in fair value of our investments available-for-sale. 104
Biggest changeAs of December 31, 2024, the effective duration of our investments available-for-sale was 4.1 years, which means that an instantaneous parallel shift (movement up or down) in the yield curve of 100 basis points would result in a change of 4.1% in fair value of our investments available-for-sale. 96
The assets within the investment portfolio are exposed to the same factors that affect overall financial market performance. While our investment portfolio is exposed to factors affecting markets worldwide, it is most sensitive to fluctuations in the drivers of United States markets.
The assets within the investment portfolio are exposed to the same factors that affect overall financial market performance. While our investment 95 portfolio is exposed to factors affecting markets worldwide, it is most sensitive to fluctuations in the drivers of United States markets.

Other ACT 10-K year-over-year comparisons