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What changed in MGIC INVESTMENT CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MGIC INVESTMENT CORP's 2024 and 2025 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 2025 report.

+512 added−591 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in MGIC INVESTMENT CORP's 2025 10-K

512 paragraphs added · 591 removed · 410 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

109 edited+17 added−24 removed140 unchanged
Biggest changeDuring 2024, we wrote new insurance in each of those jurisdictions. 2025 BUSINESS STRATEGIES Our business strategies continue to be to 1) maximize the value we create through our mortgage credit enhancement activities; 2) differentiate ourselves through our customer experience; 3) establish a competitive advantage through our digital and analytical capabilities; 4) excel at acquiring, managing and distributing mortgage credit risk and the related capital; 5) maintain financial strength through economic cycles; and 6) foster an environment that embraces diversity and best positions our people to succeed. 2024 ACCOMPLISHMENTS Following are several of our 2024 accomplishments that furthered our business strategies. • Earned $763 million of net income ($2.89 per diluted share) for the year, compared to $713 million ($2.49 per diluted share) in 2023. • Expanded our reinsurance program by finalizing quota share reinsurance covering the majority of our 2025 and 2026 NIW and placing a forward-commitment excess of loss reinsurance agreement covering 2024 NIW.
Biggest changeDuring 2025, we wrote new insurance in each of those jurisdictions. 2026 Business Strategies Our business strategies are to 1) maximize the value we create through our mortgage credit enhancement activities; 2) differentiate ourselves through our customer experience; 3) advance our competitive advantage through our digital and analytical capabilities; 4) excel at acquiring, managing and distributing mortgage credit risk and the related capital; 5) maintain financial strength through economic cycles; and 6) foster an environment that attracts and retains the best talent and positions our people to succeed. 2025 Accomplishments Following are several of our 2025 accomplishments that furthered our business strategies. • Earned $738 million of net income ($3.14 per diluted share) for the year, compared to $763 million ($2.89 per diluted share) in 2024. • Paid $800 million of cash dividends from MGIC to our holding company, a 7% increase from the $750 million paid in 2024. • Maintained financial strength and capital flexibility while returning approximately $915 million in capital to shareholders: ▪ Ended 2025 with $1.1 billion of cash and investments at the holding company. ▪ Repurchased 12% of our shares outstanding at the beginning of the year. ▪ Paid shareholder dividends of $0.56 per share, a 14% increase from the $0.49 per share in 2024. ▪ MGIC's Financial Strength Rating was upgraded by Moody's from A3 to A2.
Our revenues and losses may be materially affected by the risk factors that are included in Item 1A of this annual report and are an integral part of this annual report. These risk factors may also cause actual results to differ materially from the results contemplated by forward looking statements that we may make.
Forward Looking Statements and Risk Factors Our revenues and losses may be materially affected by the risk factors that are included in Item 1A of this annual report and are an integral part of this annual report. These risk factors may also cause actual results to differ materially from the results contemplated by forward looking statements that we may make.
The aggregate XOL reinsurance coverage decreases over a period of either 10 of 12.5 years, depending on the transaction, subject to certain conditions, as the underlying covered mortgages amortize or are repaid, or mortgage insurance losses are paid.
The aggregate XOL reinsurance coverage decreases over a period of either 10 or 12.5 years, depending on the transaction, subject to certain conditions, as the underlying covered mortgages amortize or are repaid, or mortgage insurance losses are paid.
The revised Model Act includes requirements relating to, among other things: (i) capital and minimum capital requirements, and contingency reserves; (ii) restrictions on mortgage insurers’ investments in notes secured by mortgages; (iii) prudent underwriting standards and formal underwriting guidelines; (iv) the establishment of formal, internal “Mortgage Guaranty Quality Control Programs” with respect to in-force business; and (v) reinsurance and prohibitions on captive reinsurance arrangements.
The revised Model Act includes requirements relating to, among other things: (i) capital and minimum capital requirements, and contingency reserves; (ii) restrictions on mortgage insurers’ investments in notes secured by mortgages; (iii) prudent underwriting standards and formal underwriting guidelines; (iv) the establishment of formal, internal “Mortgage Guaranty Quality Control Programs” with respect to in-force business; and (v) reinsurance and prohibitions on captive reinsurance arrangements.
In general, regulation of our subsidiaries’ businesses relates to: • minimum capital levels and adequacy ratios; • requirements regarding contingency reserves; • premium rates and discrimination in pricing; • licenses to transact businesses; • policy forms; • insurable loans; • annual and other reports on financial condition; • the basis upon which assets and liabilities must be stated; • reinsurance requirements; • limitations on the types of investment instruments which may be held in an investment portfolio; • privacy; • deposits of securities; • transactions among affiliates; • restrictions on transactions that have the effect of inducing lenders to place business with the insurer; • cybersecurity; • limits on dividends payable (for a description of limits on dividends payable to us from MGIC, see Note 14 – “Statutory Information,” to our consolidated financial statements in Item 8); • suitability of officers and directors; and • claims handling.
In general, regulation of our subsidiaries’ businesses relates to: • minimum capital levels and adequacy ratios; • requirements regarding contingency reserves; • premium rates and discrimination in pricing; • licenses to transact businesses; • policy forms; • insurable loans; • annual and other reports on financial condition; • the basis upon which assets and liabilities must be stated; • reinsurance requirements; • limitations on the types of investment instruments which may be held in an investment portfolio; • privacy; • deposits of securities; • transactions among affiliates; • restrictions on transactions that have the effect of inducing lenders to place business with the insurer; • cybersecurity; • limits on dividends payable (for a description of limits on dividends payable to us from MGIC, see Note 13 – “Statutory Information,” to our consolidated financial statements in Item 8); • suitability of officers and directors; and • claims handling.
For more information, see our risk factor titled "If our risk management programs are not effective in identifying, or adequate in controlling or mitigating, the risks we face, or if the models used in our businesses are inaccurate, it could have a material adverse impact on our business, results of operations and financial condition" in Item 1A .
For more information, see our risk factor titled "If our risk management programs are not effective in identifying, controlling or mitigating, the risks we face, or if the models used in our businesses are inaccurate, it could have a material adverse impact on our business, results of operations and financial condition" in Item 1A .
Moreover, when a loan is refinanced, because the new loan replaces, and is a continuation of, an earlier loan, the pattern of claims frequency for that new loan may be different from the typical pattern for other loans. Persistency, the condition of the economy, including unemployment, and other factors can affect the pattern of claim activity.
Moreover, when a loan is refinanced, because the new loan replaces, and is a continuation of, an earlier loan, the pattern of claims frequency for that new loan may be different from the typical pattern for other loans. Annual Persistency, the condition of the economy, including unemployment, and other factors can affect the pattern of claim activity.
The profit commission under our QSR Transactions also varies inversely with the level of ceded losses incurred on a “dollar for dollar” basis and can be eliminated at ceded loss levels higher than what we have experienced on our QSR Transactions.
The profit commission under our QSR Transactions varies inversely with the level of ceded losses incurred on a “dollar for dollar” basis and can be eliminated at ceded loss levels higher than what we have experienced on our QSR Transactions.
See "Management's Discussion and Analysis – Liquidity and Capital Resources – Capital Adequacy" in Item 7 for information about our current capital position. We are required to establish statutory accounting contingency loss reserves in an amount equal to 50% of earned premiums. These amounts cannot be withdrawn for a period of 10 years, except as permitted by insurance regulations.
See "Management's Discussion and Analysis – Liquidity and Capital Resources – Capitalization" in Item 7 for information about our current capital position. We are required to establish statutory accounting contingency loss reserves in an amount equal to 50% of earned premiums. These amounts cannot be withdrawn for a period of 10 years, except as permitted by insurance regulations.
In addition to varying with the coverage percentage, our premium rates for insurance have varied depending upon the perceived risk of a claim on the insured loan and thus have taken into account, among other things, the LTV ratio, the borrower’s credit score and DTI ratio, the number of borrowers, the property location, the mortgage term and whether the property is the borrower’s primary residence.
In addition to varying with the coverage percentage, our premium rates for insurance have varied depending upon the perceived risk of a claim on the insured loan and thus take into account the LTV ratio, the borrower’s credit score and DTI ratio, the number of borrowers, the property location, the mortgage term and whether the property is the borrower’s primary residence, among other things.
(2) Includes ARMs where payments adjust fully with interest rate adjustments. Also includes pay option ARMs and other ARMs with negative amortization features, which collectively at each of December 31, 2024 and 2023, represented 0.1% of primary RIF. As indicated in note (1), does not include ARMs in which the initial interest rate is fixed for at least five years.
(2) Includes ARMs where payments adjust fully with interest rate adjustments. Also includes pay option ARMs and other ARMs with negative amortization features, which collectively at each of December 31, 2025 and 2024, represented 0.1% of primary RIF. As indicated in note (1), does not include ARMs in which the initial interest rate is fixed for at least five years.
MGIC's “policyholder position” includes its net worth or surplus and its contingency reserve. At December 31, 2024, MGIC’s risk-to-capital ratio was 10.0 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $3.6 billion above the required MPP of $2.2 billion.
MGIC's “policyholder position” includes its net worth or surplus and its contingency reserve. At December 31, 2025, MGIC’s risk-to-capital ratio was 10.0 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $3.6 billion above the required MPP of $2.2 billion.
In 2024, a substantial majority of our volume was on loans with GSE standard or higher coverage. For loans that are not sold to the GSEs, the lender determines the coverage percentage from those that we offer. Higher coverage percentages generally result in increased severity, which is the amount paid on a claim.
In 2025, a substantial majority of our volume was on loans with GSE standard or higher coverage. For loans that are not sold to the GSEs, the lender determines the coverage percentage from those that we offer. Higher coverage percentages generally result in increased severity, which is the amount paid on a claim.
For both December 31, 2024 and 2023, ARMs with LTV ratios in excess of 90% represented 0.1%, of primary RIF, respectively. (3) Loans within the conforming loan limit have an original principal balance that does not exceed the maximum original principal balance of loans that the GSEs will purchase.
For both December 31, 2025 and 2024, ARMs with LTV ratios in excess of 90% represented 0.1%, of primary RIF, respectively. (3) Loans within the conforming loan limit have an original principal balance that does not exceed the maximum original principal balance of loans that the GSEs will purchase.
The majority of loans we insured prior to 2014 (which represent 29% of the loans in the delinquency inventory) are covered by master policy terms that, except under certain circumstances, do not limit the number of years of accumulated interest that an insured may include in a claim.
The majority of loans we insured prior to 2014 (which represent 24% of the loans in the delinquency inventory) are covered by master policy terms that, except under certain circumstances, do not limit the number of years of accumulated interest that an insured may include in a claim.
Wisconsin, our domiciliary state, has adopted the Risk Management and Own Risk and Solvency Assessment Act, which requires, among other things, that we conduct an Own Risk and Solvency Assessment ("ORSA"), at least annually, to assess the material risks associated with our business and our current and estimated projected future solvency position; and maintain a risk management MGIC Investment Corporation 2024 Form 10-K | 23 MGIC Investment Corporation and Subsidiaries framework to assess, monitor, manage and report on material risks.
Wisconsin, our domiciliary state, has adopted the Risk Management and Own Risk and Solvency Assessment Act, which requires, among other things, that we conduct an Own Risk and Solvency Assessment ("ORSA"), at least annually, to assess the material risks associated with our business and our current and estimated projected future solvency position; and maintain a risk management MGIC Investment Corporation 2025 Form 10-K | 23 framework to assess, monitor, manage and report on material risks.
For background information about such losses in 2007-2013, as well as information about the effects of the COVID-19 pandemic, refer to “General – Overview of Private Mortgage Insurance Industry and its Operating Environment” above. Delinquencies The claim cycle on PMI generally begins with the insurer’s receipt of notification of a delinquency on an insured loan from the loan servicer.
For background information about such losses in 2007-2013, as well as information about the effects of the COVID-19 pandemic, refer to “ General – Overview of Private Mortgage Insurance Industry and its Operating Environment” above. Delinquencies The claim cycle on PMI generally begins with the insurer’s receipt of notification of a delinquency on an insured loan from the loan servicer.
Primary delinquency rate by jurisdiction 2024 2023 2022 Florida * 3.7 % 2.8 % 3.1 % Texas 2.6 % 2.5 % 2.3 % Illinois * 2.9 % 2.7 % 2.6 % Pennsylvania * 2.2 % 2.1 % 2.2 % California 2.5 % 2.3 % 2.2 % Ohio * 2.3 % 2.2 % 2.2 % Michigan 2.5 % 2.3 % 1.9 % New York * 3.1 % 3.4 % 3.5 % Georgia 2.9 % 2.5 % 2.3 % North Carolina 2.3 % 1.7 % 1.7 % New Jersey * 2.5 % 2.6 % 2.9 % Indiana * 2.7 % 2.5 % 2.3 % Maryland 2.2 % 2.3 % 2.4 % Minnesota 1.8 % 1.6 % 1.6 % South Carolina * 3.3 % 2.6 % 2.4 % All other jurisdictions 2.0 % 2.0 % 2.0 % Note: Asterisk denotes jurisdictions in the table above that predominately use a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.
Primary Delinquency Rate by Jurisdiction 2025 2024 2023 Florida * 3.2 % 3.7 % 2.8 % Texas 2.7 % 2.6 % 2.5 % Illinois * 3.0 % 2.9 % 2.7 % California 2.7 % 2.5 % 2.3 % Pennsylvania * 2.2 % 2.2 % 2.1 % Michigan 2.6 % 2.5 % 2.3 % Ohio * 2.3 % 2.3 % 2.2 % New York * 3.0 % 3.1 % 3.4 % Georgia 3.0 % 2.9 % 2.5 % Maryland 2.7 % 2.2 % 2.3 % New Jersey * 2.7 % 2.5 % 2.6 % North Carolina 2.1 % 2.3 % 1.7 % Indiana 2.5 % 2.7 % 2.5 % Minnesota 2.0 % 1.8 % 1.6 % Virginia 1.7 % 1.5 % 1.4 % All other jurisdictions 2.1 % 2.1 % 2.1 % Note: Asterisk denotes jurisdictions in the table above that predominately use a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.
We call such reduction of claims submitted to us "curtailments.” In each of 2024 and 2023, curtailments reduced our average claim paid by approximately 4.7% and 5.4%, respectively. When reviewing the loan file associated with a claim, we may determine that we have the right to rescind coverage on the loan.
We call such reduction of claims submitted to us "curtailments.” In each of 2025 and 2024, curtailments reduced our average claim paid by approximately 5.3% and 4.7%, respectively. When reviewing the loan file associated with a claim, we may determine that we have the right to rescind coverage on the loan.
Securities with stated maturities due within up to one year, after one year and up to five years, after five years and up to ten years, and after ten years, represented 12%, 28%, 28%, and 15%, respectively, of the total fair value of our fixed income investment securities.
Securities with stated maturities due within up to one year, after one year and up to five years, after five years and up to ten years, and after ten years, represented 13%, 28%, 28%, and 15%, respectively, of the total fair value of our fixed income investment securities.
As of December 31, 2024, our principal mortgage insurance subsidiary, MGIC, was licensed in all 50 states of the United States, the District of Columbia, Puerto Rico and Guam.
As of December 31, 2025, our principal mortgage insurance subsidiary, MGIC, was licensed in all 50 states of the United States, the District of Columbia, Puerto Rico and Guam.
Characteristics of primary risk in force December 31, 2024 December 31, 2023 Primary RIF (In billions) : $ 78.8 $ 77.2 Loan-to-value ratios: 95.01% and above 16.6 % 15.7 % 90.01 - 95.00% 53.1 % 52.4 % 85.01 - 90.00% 26.5 % 27.2 % 80.01 - 85.00% 3.5 % 4.5 % 80% and below 0.3 % 0.2 % Total 100.0 % 100.0 % Debt-to-income ratios: 45.01% and above 19.8 % 17.5 % 38.01% - 45.00% 32.0 % 31.8 % 38% and below 48.2 % 50.7 % Total 100.0 % 100.0 % Loan Type: Fixed (1) 99.6 % 99.6 % ARMs (2) 0.4 % 0.4 % Total 100.0 % 100.0 % Original Insured Loan Amount: (3) Conforming loan limit and below 97.6 % 97.3 % Non-conforming 2.4 % 2.7 % Total 100.0 % 100.0 % Mortgage Term: 15-years and under 0.5 % 0.7 % Over 15 years 99.5 % 99.3 % Total 100.0 % 100.0 % Property Type: Single-family detached 86.6 % 86.7 % Condominium/Townhouse/Other attached 12.5 % 12.6 % Other (4) 0.9 % 0.7 % Total 100.0 % 100.0 % Occupancy Status: Owner occupied 98.3 % 98.1 % Second home 1.6 % 1.8 % Investor property 0.1 % 0.1 % Total 100.0 % 100.0 % Documentation: Reduced: (5) Stated 0.5 % 0.5 % No 0.1 % 0.2 % Full documentation 99.4 % 99.3 % Total 100.0 % 100.0 % MGIC Investment Corporation 2024 Form 10-K | 14 MGIC Investment Corporation and Subsidiaries Characteristics of primary risk in force December 31, 2024 December 31, 2023 FICO Score: (6) 760 and greater 43.9 % 43.1 % 740 - 759 18.0 % 17.9 % 720 - 739 14.2 % 14.1 % 700 - 719 10.6 % 10.8 % 680 - 699 7.0 % 7.3 % 660 - 679 3.1 % 3.2 % 640 - 659 1.6 % 1.8 % 639 and less 1.6 % 1.8 % Total 100.0 % 100.0 % (1) Includes fixed rate mortgages with temporary buydowns (where in effect, the applicable interest rate is typically reduced by one or two percentage points during the first two years of the loan and then increased thereafter to the original interest rate), ARMs in which the initial interest rate is fixed for at least five years, and balloon payment mortgages (a loan with a maturity, typically five to seven years, that is shorter than the loan’s amortization period).
Characteristics of Primary Risk in Force December 31, 2025 December 31, 2024 Primary RIF (In billions) : $ 81.2 $ 78.8 Loan-to-Value Ratios: 95.01% and above 17.5 % 16.6 % 90.01 - 95.00% 53.8 % 53.1 % 85.01 - 90.00% 25.2 % 26.5 % 80.01 - 85.00% 3.3 % 3.5 % 80% and below 0.2 % 0.3 % Total 100.0 % 100.0 % Debt-to-Income Ratios: 45.01% and above 21.5 % 19.8 % 38.01% - 45.00% 31.9 % 32.0 % 38% and below 46.6 % 48.2 % Total 100.0 % 100.0 % Loan Type: Fixed (1) 99.6 % 99.6 % ARMs (2) 0.4 % 0.4 % Total 100.0 % 100.0 % Original Insured Loan Amount: (3) Conforming loan limit and below 97.8 % 97.6 % Non-conforming 2.2 % 2.4 % Total 100.0 % 100.0 % Mortgage Term: 15-years and under 0.5 % 0.5 % Over 15 years 99.5 % 99.5 % Total 100.0 % 100.0 % MGIC Investment Corporation 2025 Form 10-K | 13 Characteristics of Primary Risk in Force December 31, 2025 December 31, 2024 Property Type: Single-family detached 86.9 % 86.6 % Condominium/Townhouse/Other attached 12.0 % 12.5 % Other (4) 1.1 % 0.9 % Total 100.0 % 100.0 % Occupancy Status: Owner occupied 98.5 % 98.3 % Second home 1.4 % 1.6 % Investor property 0.1 % 0.1 % Total 100.0 % 100.0 % Documentation: Full documentation 99.5 % 99.4 % Reduced: (5) Stated 0.4 % 0.5 % No 0.1 % 0.1 % Total 100.0 % 100.0 % FICO Score: (6) 760 and greater 44.7 % 43.9 % 740 - 759 18.0 % 18.0 % 720 - 739 14.2 % 14.2 % 700 - 719 10.4 % 10.6 % 680 - 699 6.7 % 7.0 % 660 - 679 3.1 % 3.1 % 640 - 659 1.5 % 1.6 % 639 and less 1.4 % 1.6 % Total 100.0 % 100.0 % (1) Includes fixed rate mortgages with temporary buydowns (where in effect, the applicable interest rate is typically reduced by one or two percentage points during the first two years of the loan and then increased thereafter to the original interest rate), ARMs in which the initial interest rate is fixed for at least five years, and balloon payment mortgages (a loan with a maturity, typically five to seven years, that is shorter than the loan’s amortization period).
No reader of this annual report should rely on these statements being current at any time other than the time at which this annual report was filed with the Securities and Exchange Commission. MGIC Investment Corporation 2024 Form 10-K | 10 MGIC Investment Corporation and Subsidiaries B.
No reader of this annual report should rely on these statements being current at any time other than the time at which this annual report was filed with the Securities and Exchange Commission. MGIC Investment Corporation 2025 Form 10-K | 10 B.
Inside Mortgage Finance estimates that in 2024, the VA accounted for 24.5% of all low down payment residential mortgages that were subject to FHA, VA, USDA or primary private mortgage insurance, compared to 21.5% in 2023 and 24.5% in 2022. Since 2012, the VA's market share has been as high as 30.9% (in 2020).
Inside Mortgage Finance estimates that in 2025, the VA accounted for 26.8% of all low down payment residential mortgages that were subject to FHA, VA, USDA or primary private mortgage insurance, compared to 24.5% in 2024 and 21.5% in 2023. Since 2012, the VA's market share has been as high as 30.9% (in 2020).
See “Our Products and Services – Mortgage Insurance – Primary Insurance In Force and Risk In Force by Policy Year” above. Loss Mitigation Before paying a claim, generally we review the loan and servicing files to determine the appropriateness of the claim amount.
See “ Our Products and Services – Mortgage Insurance – Primary Insurance In Force and Risk In Force by Policy Year” above. Loss Mitigation Before paying a claim, generally we review the loan and servicing files to determine the appropriateness of the claim amount.
For further information, see our risk factors in Item 1A , including the ones titled “Because we establish loss reserves only upon a loan delinquency rather than based on estimates of our ultimate losses on risk in force, losses may have a disproportionate adverse effect on our earnings in certain periods,” and “Because loss reserve estimates are subject to uncertainties, paid claims may be substantially different than our loss reserves.” Our losses incurred were $(14.9) million in 2024, compared to $(20.9) million and $(254.6) million in 2023 and 2022, respectively.
For further information, see our risk factors in Item 1A , including the ones titled “Because we establish loss reserves only upon a loan delinquency rather than based on estimates of our ultimate losses on risk in force, losses may have a disproportionate adverse effect on our earnings in certain periods,” and “Because loss reserve estimates are subject to uncertainties, paid claims may be substantially different than our loss reserves.” Our losses incurred were $48.9 million in 2025, compared with $(14.9) million and $(20.9) million in 2024 and 2023, respectively.
Top 10 jurisdictions – RIF California 9.0 % Texas 8.0 % Florida 6.7 % Pennsylvania 5.2 % Illinois 4.1 % Virginia 3.8 % New York 3.6 % Ohio 3.5 % North Carolina 3.4 % Maryland 3.3 % Total 50.6 % Top 10 metropolitan-based statistical areas – RIF New York-Newark-Jersey City 4.3 % Washington-Arlington-Alexandria 4.0 % Chicago-Naperville-Elgin 3.2 % Philadelphia-Camden-Wilmington 2.6 % Dallas-Fort Worth-Arlington 2.6 % Atlanta-Sandy Springs-Roswell 2.4 % Los Angeles-Long Beach-Anaheim 2.4 % Houston-The Woodlands-Sugar Land 2.1 % Minneapolis-St.
Top 10 Jurisdictions – RIF California 9.0 % Texas 8.0 % Florida 6.8 % Pennsylvania 5.2 % Illinois 4.0 % New York 3.7 % Virginia 3.6 % Ohio 3.5 % North Carolina 3.3 % Maryland 3.3 % Total 50.4 % Top 10 Metropolitan-Based Statistical Areas – RIF New York-Newark-Jersey City 4.0 % Washington-Arlington-Alexandria 3.8 % Chicago-Naperville-Elgin 3.0 % Dallas-Fort Worth-Arlington 2.7 % Philadelphia-Camden-Wilmington 2.6 % Atlanta-Sandy Springs-Roswell 2.3 % Los Angeles-Long Beach-Anaheim 2.3 % Houston-Pasadena-The Woodlands 2.0 % Phoenix-Mesa-Chandler 1.9 % Minneapolis-St.
MGIC Investment Corporation 2024 Form 10-K | 12 MGIC Investment Corporation and Subsidiaries MORTGAGE INSURANCE PORTFOLIO Geographic Dispersion The following tables reflect the percentage of primary RIF in the top 10 jurisdictions and top 10 metropolitan statistical areas at December 31, 2024.
MGIC Investment Corporation 2025 Form 10-K | 12 Mortgage Insurance Portfolio Geographic Dispersion The following tables reflect the percentage of primary RIF in the top 10 jurisdictions and top 10 metropolitan statistical areas at December 31, 2025.
Taxable Municipals 22% 4. Asset-Backed 10% 5. U.S. government and agency debt 5% 6. GNMA and other agency mortgage-backed securities 6% 100% We have no derivative financial instruments in our investment portfolio.
Taxable Municipals 24% 4. Asset-Backed 10% 5. U.S. government and agency debt 5% 6. GNMA and other agency mortgage-backed securities 6% Total 100% We have no derivative financial instruments in our investment portfolio.
The FHA, VA and USDA sponsor government-backed mortgage insurance programs, and it is estimated that during 2024, they accounted for a combined approximately 58.9% of the total low down payment residential mortgages which were subject to FHA, VA, USDA or primary private mortgage insurance, compared to 55.9% in 2023.
The FHA, VA and USDA sponsor government-backed mortgage insurance programs, and it is estimated that during 2025, they accounted for a combined approximately 62.0% of the total low down payment residential mortgages which were subject to FHA, VA, USDA or primary private mortgage insurance, compared to 58.9% in 2024.
These transactions allow us to better manage our risk profile, because they reduce the amount of capital we are required to hold to comply with insurance regulatory requirements and the requirements of the GSEs' PMIERs. Our reinsurance strategy focuses on reinsuring our most recent or future NIW, while recapturing risk on attractive seasoned vintages.
These transactions allow us to better manage our risk profile by reducing the amount of capital we are required to hold to comply with insurance regulatory requirements and the requirements of the GSEs' PMIERs. Our reinsurance strategy focuses on reinsuring our most recent or future NIW, while recapturing risk on attractive seasoned vintages.
The calculated credit for XOL reinsurance transactions under PMIERs is generally based on the PMIERs requirement of the covered loans and the attachment and detachment point of the coverage, all of which fluctuate over time. PMIERs credit is generally not given for the reinsured risk above the PMIERs requirement.
The calculated credit for XOL reinsurance transactions under PMIERs is generally based on the PMIERs requirement of the covered loans and the attachment and detachment point of the coverage, all of which fluctuate over time. PMIERs credit is haircut for the un-collateralized portion of the reinsured risk and is generally not given for the reinsured risk above the PMIERs requirement.
A dividend is extraordinary when the proposed dividend amount, plus dividends paid in the twelve months preceding the dividend payment date exceed the ordinary dividend level. In 2025, MGIC can pay $97 million of ordinary dividends without OCI approval, before taking into consideration dividends paid in the preceding twelve months.
A dividend is extraordinary when the proposed dividend amount, plus dividends paid in the twelve months preceding the dividend payment date exceed the ordinary dividend level. In 2026, MGIC can pay $89 million of ordinary dividends without OCI approval, before taking into consideration dividends paid in the preceding twelve months.
Wisconsin, where MGIC is domiciled, has begun the process to replace current mortgage insurance regulations with the Model Act, though it is expected that some changes will be made before formal adoption. GENERAL INFORMATION ABOUT OUR COMPANY We are a Wisconsin corporation organized in 1984.
Wisconsin, where MGIC is domiciled, has begun the process to replace current mortgage insurance regulations with the Model Act; however it is expected that modifications will be made before formal adoption. General Information About Our Company We are a Wisconsin corporation organized in 1984.
For information about our primary average claim paid, see “Management’s Discussion and Analysis – Consolidated Results of Operations – Net Losses and LAE Paid,” in Item 7 .
For information about our primary average claim paid, see “Management’s Discussion and Analysis – Consolidated Results of Operations – Net Losses and LAE Paid,” in I tem 7 .
We believe that, excluding other factors, claim incidence increases: • during periods of economic contraction and home price depreciation, including when these conditions may not be nationwide, compared to periods of economic expansion and home price appreciation; • for loans to borrowers with lower FICO scores compared to loans to borrowers with higher FICO scores; • for loans to borrowers with higher DTI ratios compared to loans to borrowers with lower DTI ratios; • for loans with less than full underwriting documentation compared to loans with full underwriting documentation; • for loans with higher LTV ratios compared to loans with lower LTV ratios; • for variable payment loans when the reset interest rate significantly exceeds the interest rate at the time of loan origination; • for loans that permit the deferral of principal amortization compared to loans that require principal amortization with each monthly payment; • for loans for which the subject property will be an investment property or second home as opposed to a borrower's primary residence; and • for cash out refinance loans compared to rate and term refinance loans.
We believe that, excluding other factors, claim incidence increases: • during periods of national or regional economic contraction and home price depreciation, compared to periods of economic expansion and home price appreciation; • for loans to borrowers with lower credit scores compared to loans to borrowers with higher credit scores; • for loans to borrowers with higher DTI ratios compared to loans to borrowers with lower DTI ratios; • for loans with less than full underwriting documentation compared to loans with full underwriting documentation; • for loans with higher LTV ratios compared to loans with lower LTV ratios; • for variable payment loans when the reset interest rate significantly exceeds the interest rate at the time of loan origination; • for loans that permit the deferral of principal amortization compared to loans that require principal amortization with each monthly payment; • for loans for which the subject property will be an investment property or second home as opposed to a borrower's primary residence; and • for cash out refinance loans compared to rate and term refinance loans.
In 2024, MGIC paid $750 million in dividends to the holding company. For further information, see Note 14 – “Statutory Information,” to our consolidated financial statements in Item 8. Mortgage insurance premium rates are subject to state regulation to protect policyholders against the adverse effects of excessive, inadequate or unfairly discriminatory rates and to encourage competition in the insurance marketplace.
In 2025, MGIC paid $800 million in dividends to the holding company. For further information, see Note 13 – “Statutory Information,” to our consolidated financial statements in Item 8. Mortgage insurance premium rates are subject to state regulation to protect policyholders against the adverse effects of excessive, inadequate or unfairly discriminatory rates and to encourage competition in the insurance marketplace.
As of December 31, 2024, approximately 94% of our investment portfolio (excluding cash and cash equivalents) was managed by two external investment managers, although we maintain overall control of investment policy and strategy. We maintain direct management of the remainder of our investment portfolio.
As of December 31, 2025, approximately 93% of our investment portfolio (excluding cash and cash equivalents) was managed by two external investment managers, although we maintain overall control of investment policy and strategy. We maintain direct management of the remainder of our investment portfolio.
The weighted average “decision FICO score” at loan origination for NIW in 2024 was 747 compared to 753 in 2023. The FICO score for a loan with multiple borrowers is the lowest of the borrowers’ decision FICO scores.
The weighted average “decision FICO score” at loan origination for NIW in 2025 was 748 compared to 747 in 2024. The FICO score for a loan with multiple borrowers is the lowest of the borrowers’ decision FICO scores.
Our XOL transactions provide XOL reinsurance coverage for a portion of the risk associated with certain mortgage insurance policies having insurance coverage in force dates from August 1, 2020 through December 31, 2024.
Our XOL Transactions provide reinsurance coverage for a portion of the risk associated with certain mortgage insurance policies having insurance coverage in force dates from January 1, 2020 through December 31, 2025.
For information about losses incurred from 2022 to 2024, including the amounts of losses incurred that are associated with delinquency notices received in the reporting year compared to losses incurred associated with delinquency notices received in prior years, see Note 8 – "Loss Reserves" to our consolidated financial statements in Item 8 . D.
For information about losses incurred from 2023 to 2025, including the amounts of losses incurred that are associated with delinquency notices received in the reporting year compared to losses incurred associated with delinquency notices received in prior years, see Note 8 – "Loss Reserves" to our consolidated financial statements in Item 8 .
During 2024, 2023 and 2022, the single premium plan represented approximately 2%, 4% and 4%, respectively, of our NIW. The monthly premium plan represented approximately 98%, 96% and 96%, respectively. The annual premium plan represented less than 1% of NIW in each of those years.
During 2025, 2024 and 2023, the monthly premium plan represented approximately 97%, 98% and 96%, respectively, of our NIW. The single premium plan represented approximately 3%, 2% and 4%, respectively. The annual premium plan represented less than 1% of NIW in each of those years.
For information about the credit ratings of securities in our investment portfolio, see "Balance Sheet Review" in Item 7 . Investment Operations At December 31, 2024, the sectors represented in our investment portfolio were as shown in the table below: Investment portfolio - sectors Percentage of Portfolio’s Fair Value 1. Corporate 47% 2. Tax-Exempt Municipals 10% 3.
For information about the credit ratings of securities in our investment portfolio, see "Balance Sheet Review" in Item 7 . Investment Operations As of December 31, 2025, the sectors represented in our investment portfolio were as shown in the table below: Investment Portfolio - Sectors Percentage of Portfolio’s Fair Value 1. Corporate 48% 2. Tax-Exempt Municipals 7% 3.
MORTGAGE CREDIT RISK We believe that mortgage credit risk is materially affected by: • the condition of the economy, including the direction of change in home prices and employment, in the area in which the property is located; • the borrower’s credit profile, including the borrower’s credit history, DTI ratio and cash reserves, and the willingness of a borrower with sufficient resources to make mortgage payments when the mortgage balance exceeds the value of the home; • the loan product, which encompasses the LTV ratio, the type of loan instrument, including whether the instrument provides for fixed or variable payments and the amortization schedule, the type of property (including its use) and the purpose of the loan; • origination practices of lenders and the percentage of coverage on insured loans; and MGIC Investment Corporation 2024 Form 10-K | 17 MGIC Investment Corporation and Subsidiaries • the size of insured loans.
Pricing / Underwriting Risk We believe that pricing/underwriting risk for mortgage insurance is materially affected by: • the condition of the economy, including the direction of change in home prices and employment, in the area in which the property is located; • the borrower’s credit profile, including the borrower’s credit history, DTI ratio and cash reserves, and the willingness of a borrower with sufficient resources to make mortgage payments when the mortgage balance exceeds the value of the home; • the loan product, which encompasses the LTV ratio, the type of loan instrument, including whether the instrument provides for fixed or variable payments and the amortization schedule, the type of property (including its use) and the purpose of the loan; • origination practices of lenders and the percentage of coverage on insured loans; and • the size of insured loans.
Beginning in 2013, we aligned most of our underwriting requirements with Fannie Mae and Freddie Mac for loans that receive and are processed in accordance with certain approval recommendations from a GSE automated underwriting system. Our underwriting requirements are available on our website at http://www.mgic.com/underwriting.
Beginning in 2013, we aligned most of our underwriting requirements with Fannie Mae and Freddie Mac for loans that receive and are processed in accordance with certain approval recommendations from a GSE automated underwriting system. Our underwriting MGIC Investment Corporation 2025 Form 10-K | 17 requirements are available on our website at http://www.mgic.com/underwriting.
The publication Inside Mortgage Finance estimates that in 2024, the FHA accounted for 33.5% of low down payment residential mortgages that were subject to FHA, VA, USDA or primary private mortgage insurance, compared to 33.2% in 2023 and 26.7% in 2022.
The publication Inside Mortgage Finance estimates that in 2025, the FHA accounted for 34.3% of low down payment residential mortgages that were subject to FHA, VA, USDA or primary private mortgage insurance, compared to 33.5% in 2024 and 33.2% in 2023.
QUOTA SHARE TRANSACTIONS Our QSR Transactions are with unaffiliated reinsurers. As of December 31, 2024, our QSR transactions cover most of our insurance written from 2021 through 2024, and a smaller percentage of our insurance written from 2025. The weighted average coverage percentage of our QSR transactions was 32.0%, based on risk in force as of December 31, 2024.
Quota Share Transactions Our QSR Transactions are with unaffiliated reinsurers. As of December 31, 2025, our QSR Transactions cover most of our insurance written from 2021 through 2025. The weighted average coverage percentage of our QSR Transactions was 32.9%, based on risk in force as of December 31, 2025.
At December 31, 2024, approximately $1.1 billion of investments and cash and cash equivalents was held by our parent company, and the remainder was held by our subsidiaries, primarily MGIC.
As of December 31, 2025, approximately $1.1 billion of investments and cash and cash equivalents was held by our parent company, and the remainder was held by our subsidiaries, primarily MGIC.
Wisconsin, where MGIC is domiciled, has begun the process to replace current PMI regulations with the Model Act, though it is expected that some changes will be made before formal adoption.
Wisconsin, where MGIC is domiciled, has begun the process to replace current PMI regulations with the Model Act; however it is expected that modifications will be made before formal adoption.
PMI industry currently consists of six active mortgage insurers and their affiliates, including MGIC. Our market share (as measured by NIW) was 18.6% in 2024, compared to 16.3% in 2023. (source: Inside Mortgage Finance ).
PMI industry currently consists of six active mortgage insurers and their affiliates, including MGIC. Our market share (as measured by NIW) was 19.4% in 2025, compared to 18.6% in 2024. (source: Inside Mortgage Finance ).
Among the key objectives of the ERM framework are to have a clear and well documented shared understanding, by senior management and the Board, of the Company’s risk management philosophy and overall appetite for risk, and that there are appropriate monitoring, management and reporting mechanisms to support the framework.
Among the key objectives of the ERM framework are to have a clear and well documented shared understanding, by senior management and the Board, of the Company’s risk management philosophy and overall appetite for risk. The framework also aims to establish mechanisms for appropriate monitoring, management and reporting.
For our largest risk exposure, mortgage credit risk, these KRIs include risk factors for the Company’s NIW, IIF, quality control and claim activity, and the quarterly reports include performance relative to metrics and thresholds. Each of the other Board Committees also receive regular reporting concerning the risks they oversee.
For our largest risk exposure, pricing and underwriting for mortgage credit risk, these KRIs include risk factors for the Company’s NIW, IIF, quality control and claim activity, and the quarterly reports include performance monitoring. Each of the other Board Committees also receive regular reporting concerning the risks they oversee.
Annually, servicers must inform borrowers of their right to cancel or terminate mortgage insurance. The provisions of HOPA described above apply only to borrower paid mortgage insurance, which is described below. Coverage tends to continue for borrowers experiencing economic difficulties or living in areas experiencing home price depreciation.
Annually, servicers must inform borrowers of their right to cancel MGIC Investment Corporation 2025 Form 10-K | 11 or terminate mortgage insurance. The provisions of HOPA described above apply only to borrower paid mortgage insurance, which is described below. Coverage tends to continue for borrowers experiencing economic difficulties or living in areas experiencing home price depreciation.
These requirements are subject to change from time to MGIC Investment Corporation 2024 Form 10-K | 24 MGIC Investment Corporation and Subsidiaries time. Based on our interpretation of the financial requirements of the PMIERs, as of December 31, 2024, MGIC’s Available Assets totaled $5.8 billion, or $2.2 billion in excess of its Minimum Required Assets.
These requirements are subject to change from time to MGIC Investment Corporation 2025 Form 10-K | 24 time. Based on our application of the financial requirements of the PMIERs, as of December 31, 2025, MGIC’s Available Assets totaled $5.7 billion, or $2.5 billion in excess of its Minimum Required Assets.
The following charts show, on a direct basis, our primary IIF and primary RIF as of December 31 for the years indicated.
The following table shows, on a direct basis, our primary IIF and primary RIF as of December 31 for the years indicated.
Subject to certain exceptions, in general, RESPA prohibits any person from giving or receiving any “thing of value” pursuant to an agreement or understanding to refer settlement services. HOPA provides for the automatic termination, or cancellation upon a borrower’s request, of private mortgage insurance upon satisfaction of certain conditions. For more information, see "Our Products and Services" in Item 1.B.
Subject to certain exceptions, in general, RESPA prohibits any person from giving or receiving any “thing of value” pursuant to an agreement or understanding to refer settlement services. HOPA provides for the automatic termination, or cancellation upon a borrower’s request, of private mortgage insurance upon satisfaction of certain conditions.
Under ASC 450-20, until a loss associated with settlement discussions or legal proceedings becomes probable and can be reasonably estimated, we do not accrue an estimated loss. When we determine that a loss is probable and can be reasonably estimated, we record our best estimate of our probable loss.
Under ASC 450-20, until a loss associated with settlement discussions or legal proceedings becomes probable and can be reasonably MGIC Investment Corporation 2025 Form 10-K | 19 estimated, we do not accrue an estimated loss. When we determine that a loss is probable and can be reasonably estimated, we record our best estimate of our probable loss.
MGIC Investment Corporation 2024 Form 10-K | 20 MGIC Investment Corporation and Subsidiaries We also establish reserves to provide for the estimated costs of settling claims, general expenses of administering the claims settlement process, legal fees and other fees (“loss adjustment expenses”), and for losses and loss adjustment expenses from delinquencies that have occurred, but have not yet been reported to us (IBNR).
We also establish reserves to provide for the estimated costs of settling claims, general expenses of administering the claims settlement process, legal fees and other fees (“loss adjustment expenses”), and for losses and loss adjustment expenses from delinquencies that have occurred, but have not yet been reported to us (IBNR).
The reports and amendments are accessible at the “Reports & Filings” link on our website (http://mtg.mgic.com). The inclusion of our website address in this report is an inactive textual reference only and is not intended to include or incorporate by reference the information on our website into this report.
The reports and amendments are accessible at the “Reports & Filings” link on our website (http://mtg.mgic.com). The inclusion of our website address in this report is an inactive textual reference only and is not intended to include or incorporate by reference the information on our website into this report. MGIC Investment Corporation 2025 Form 10-K | 26 Part I
MGIC Investment Corporation 2024 Form 10-K | 21 MGIC Investment Corporation and Subsidiaries For further information about our reinsurance agreements, including the Company's early termination rights, see Note 9 – “Reinsurance,” to our consolidated financial statements in Item 8, and our risk factor titled "Reinsurance may be unavailable at current levels and prices, and/or the GSEs may reduce the amount of capital credit we receive for our reinsurance transactions" in Item 1A.
For further information about our reinsurance agreements, including the Company's early termination rights, see Note 7 – “Reinsurance,” to our consolidated financial statements in Item 8, and our risk factor titled "Reinsurance may be unavailable at current levels and prices, and/or the GSEs may reduce the amount of capital credit we receive for our reinsurance transactions" in Item 1A .
The primary delinquency rate for the top 15 jurisdictions (based on December 31, 2024 delinquency inventory) at December 31, 2024, 2023, and 2022 appears in the table below.
The primary delinquency rate for the top 15 jurisdictions (based on December 31, 2025 delinquency inventory) as of December 31, 2025, 2024, and 2023 appears in the table below.
Paul-Bloomington 1.9 % Phoenix-Mesa-Scottsdale 1.8 % Total 27.3 % The percentages shown above for various metropolitan-based statistical areas can be affected by changes, from time to time, in the federal government’s definition of a core-based statistical area.
Paul-Bloomington 1.9 % Total 26.5 % The percentages shown above for various metropolitan-based statistical areas can be affected by changes, from time to time, in the federal government’s definition of a core-based statistical area.
In 2024, our total revenues were $1.2 billion and our primary NIW was $55.7 billion. As of December 31, 2024, our direct primary IIF was $295.4 billion and our direct primary RIF was $78.8 billion. For further information about our results of operations, see our consolidated financial statements in Item 8 and our MD&A in Item 7 .
In 2025, our total revenues were $1.2 billion and our primary NIW was $60.2 billion. As of December 31, 2025, our direct primary IIF was $303.1 billion and our direct primary RIF was $81.2 billion. For further information about our results of operations, see our consolidated financial statements in Item 8 and our MD&A in Item 7 .
Our Products and Services MORTGAGE INSURANCE In general, there are two principal types of private mortgage insurance: “primary” and “pool.” Primary Insurance Primary insurance provides mortgage default protection on individual loans and covers a percentage of the unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure on the mortgage or sale of the underlying property (collectively, the “claim amount”).
Our Products and Services Mortgage Insurance Primary Insurance Primary insurance provides mortgage default protection on individual loans and covers a percentage of the unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure on the mortgage or sale of the underlying property (collectively, the “claim amount”).
In addition to the ongoing monitoring, the Company also identifies key risks in a bottom up process facilitated through questionnaires and discussions during an annual compliance and risk forum with co-workers across a number of business functions. The results of the identification process are presented to the Board's Audit Committee.
In addition to the ongoing monitoring, the Company also identifies key risks in a bottom-up process facilitated through discussions during an annual compliance month forum with co-workers designated as "compliance coordinators" across a number of business functions. The outcomes of the discussions are presented to the Board's Audit Committee.
Under the terms of our master policy, the lender is required to file a claim for primary insurance with us within 60 days after it has acquired title to the underlying property (typically through foreclosure).
Under the terms of our master policy, the lender is required to file a claim for primary insurance with us within 60 days after it has acquired title to the underlying property (typically through foreclosure). Generally, the longer the period between delinquency and claim filing, the greater the severity.
MGIC Investment Corporation 2024 Form 10-K | 9 MGIC Investment Corporation and Subsidiaries For most of our business, we and other private mortgage insurers compete directly with federal and state governmental and quasi-governmental agencies that sponsor government-backed mortgage insurance programs, principally the FHA, VA and USDA.
For most of our business, we and other private mortgage insurers compete directly with federal and state governmental and quasi-governmental agencies that sponsor government-backed mortgage insurance programs, principally the FHA, VA and USDA.
Additionally, HOPA requires mortgage insurance to terminate MGIC Investment Corporation 2024 Form 10-K | 11 MGIC Investment Corporation and Subsidiaries automatically when the principal balance of the loan is first scheduled to reach 78% of the original value of the property and the borrower is current on loan payments or thereafter becomes current.
Additionally, HOPA requires mortgage insurance to terminate automatically when the principal balance of the loan is first scheduled to reach 78% of the original value of the property and the borrower is current on loan payments or thereafter becomes current.
The Risk Management Committee coordinates with the Board and other Board Committees regarding the assignment to the Board and Committees of oversight responsibilities for risks considered to have the greatest potential to materially MGIC Investment Corporation 2024 Form 10-K | 16 MGIC Investment Corporation and Subsidiaries impact the Company's ability to accomplish its strategic goals.
The Risk Management Committee coordinates with the Board and other Board Committees regarding the assignment to the Board and Committees of oversight responsibilities for risks considered to have the greatest potential to materially impact the Company's ability to accomplish its strategic goals.
COMMUNITY INVOLVEMENT Our commitment to community is formalized under the banner of Giving Back, Together , and in 2024 included providing financial and in-kind support for organizations that support housing, youth programs, and the arts in our community and nationwide. We also provided paid time off for co-workers to volunteer or work at election polling places. H.
Community Involvement Our commitment to community is formalized under the banner of Giving Back, Together , and in 2025 included providing financial and in-kind support for organizations that support homeownership and strengthen the communities in which our co-workers live and work. We also provided paid time off for co-workers to volunteer or work at election polling places. H.
The primary delinquency inventory in those same jurisdictions at December 31, 2024 and 2023 appears in “Management’s Discussion and Analysis – Consolidated Results of Operations – Losses and expenses – Loss Reserves,” in Item 7 . Claims Claims result from delinquencies that are not cured.
MGIC Investment Corporation 2025 Form 10-K | 18 The primary delinquency inventory in those same jurisdictions at December 31, 2025 and 2024 appears in “Management’s Discussion and Analysis – Consolidated Results of Operations – Loss Reserves,” in Item 7 . Claims Claims result from delinquencies that are not cured.
Risk Reporting and Communication The Company's Risk Management and Finance departments produce various analyses, reports and key risk indicators (“KRIs”) that are reported to the SMOC, the Risk Management Committee and the Board quarterly.
MGIC Investment Corporation 2025 Form 10-K | 16 Risk Reporting and Communication The Company's Risk Management and Finance departments produce various analyses, reports and key risk indicators (“KRIs”) that are reported to the SMOC, the Risk Management Committee and the Board quarterly.
There can be no assurance that other federal laws and regulations affecting these institutions and entities will not change, or that new legislation or regulations will not be adopted which will adversely affect the private mortgage insurance industry. MGIC Investment Corporation 2024 Form 10-K | 25 MGIC Investment Corporation and Subsidiaries G.
There can be no assurance that other federal laws and regulations affecting these institutions and entities will not change, or that new legislation or regulations will not be adopted which will adversely affect the private mortgage insurance industry.
The GSEs have private mortgage insurer eligibility requirements, or "PMIERs", for private mortgage insurers that insure loans delivered to or purchased by the GSEs. The financial requirements of the PMIERs require a mortgage insurer’s Available Assets to equal or exceed its Minimum Required Assets. In August 2024, the GSEs issued updates to the calculation of Available Assets.
The GSEs have private mortgage insurer eligibility requirements, or "PMIERs", for private mortgage insurers that insure loans delivered to or purchased by the GSEs. The financial requirements of the PMIERs require a mortgage insurer’s Available Assets to equal or exceed its Minimum Required Assets. MGIC is in compliance with the PMIERs and eligible to insure loans purchased by the GSEs.
Primary insurance and risk in force (In billions) 2024 2023 2022 2021 2020 Primary IIF $ 295.4 $ 293.5 $ 295.3 $ 274.4 $ 246.6 Primary RIF 78.8 77.2 76.5 69.3 61.8 For loans sold to a GSE, the coverage percentage must comply with the requirements established by the particular GSE to which the loan is delivered.
Primary Insurance and Risk in Force (In billions) 2025 2024 2023 Primary IIF $ 303.1 $ 295.4 $ 293.5 Primary RIF 81.2 78.8 77.2 For loans sold to a GSE, the coverage percentage must comply with the requirements established by the particular GSE to which the loan is delivered.
The conforming loan limit for one unit properties was $726,200 for 2023, $766,550 for 2024, and is $806,500 for 2025. The limit for high cost communities has been higher and was $1,149,825 in 2024 compared with $1,209,750 for 2025. Non-conforming loans are loans with an original principal balance above the conforming loan limit.
The conforming loan limit for one unit properties was $766,550 for 2024, $806,500 for 2025. The limit for high cost communities has been higher and was $1,149,825 in 2024 compared with $1,209,750 in 2025. Non-conforming loans are loans with an original principal balance above the conforming loan limit. (4) Includes cooperatives and manufactured homes deemed to be real estate.
The timing and impact on our business of any resulting changes is uncertain. Some changes would require Congressional action to implement and it is difficult to estimate when any action would be final and how long any associated phase-in period may last.
Some reforms would require Congressional action MGIC Investment Corporation 2025 Form 10-K | 8 to implement and it is difficult to estimate when any action would be final and how long any associated phase-in period may last. The timing and impact on our business of any potential reforms is uncertain.
The percentage of NIW on loans representing refinances was 4% for 2024, compared to 2% for 2023 and 3% for 2022.
The percentage of NIW on loans representing refinances was 9% for 2025, compared with 4% for 2024 and 2% for 2023.
Risk Management ENTERPRISE RISK MANAGEMENT The Company has an enterprise risk management (“ERM”) framework that it believes is commensurate with the size, nature and complexity of the Company’s business activities (all of which relate to insuring or reinsuring mortgage credit risk) and strategies.
Risk Management Enterprise Risk Management The Company has an enterprise risk management (“ERM”) framework that it believes is commensurate with the size, nature and complexity of the Company’s business activities and strategies.
Reinsurance Agreements We have in place quota share reinsurance ("QSR") and excess of loss reinsurance ("XOL") transactions providing various amounts of coverage on our risk in force as of December 31, 2024.
MGIC Investment Corporation 2025 Form 10-K | 20 D. Reinsurance Agreements We have in place quota share reinsurance ("QSR") and excess of loss reinsurance ("XOL") transactions providing various amounts of coverage on our risk in force as of December 31, 2025.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, the FHFA has indicated that it is reviewing the GSEs' pricing in connection with preparing them to exit conservatorship and to ensure that pricing subsidies benefit only affordable housing activities. • Whether the GSEs select or influence the mortgage lender’s selection of the mortgage insurer providing coverage. • The underwriting standards that determine which loans are eligible for purchase by the GSEs, which can affect the quality of the risk insured by the mortgage insurer and the availability of mortgage loans. • The terms on which mortgage insurance coverage can be canceled before reaching the cancellation thresholds established by law and the business practices associated with such cancellations.
Biggest changeIn addition, the FHFA has indicated that it is reviewing the GSEs' pricing in connection with preparing them to exit conservatorship and to ensure that pricing subsidies benefit only affordable housing activities. • Whether the GSEs select or influence the mortgage lender’s selection of the mortgage insurer providing coverage.
If we fail to timely and successfully implement and integrate the new technology systems, if the third party providers upon which we are reliant do not perform as expected, if our legacy systems fail to operate as required, or if the upgraded systems and/or transformed and automated business processes do not operate as expected, it could have a material adverse impact on our business and results of operations.
If we fail to timely and successfully implement and integrate new technology systems, if third party providers upon which we are reliant do not perform as expected, if our legacy systems fail to operate as required, or if the upgraded systems and/or transformed and automated business processes do not operate as expected, it could have a material adverse impact on our business and results of operations.
These models rely on estimates, projections, and assumptions that are inherently uncertain and may not always operate as intended. This can be especially true when extraordinary events occur, such as wars, periods of extreme inflation, pandemics, or environmental disasters related to changing climatic conditions. In addition, our models are being continuously updated over time.
These models rely on estimates, projections, and assumptions that are inherently uncertain and may not always operate as intended. This can be especially true when extraordinary events occur, such as wars, periods of extreme inflation, pandemics, or environmental disasters related to changing climatic conditions. In addition, our models are continuously updated over time.
Generally, losses follow a seasonal trend in which the first half of the year has stronger credit performance than the second half, with higher cure rates and lower new notice activity. The state of the economy, local housing markets, pandemics, natural disasters, and various other factors, may result in delinquencies not following the typical pattern.
Generally, losses follow a seasonal trend in which the first half of the year has stronger credit performance than the second half, with higher cure rates and lower new delinquency notice activity. The state of the economy, local housing markets, pandemics, natural disasters, and various other factors, may result in delinquencies not following the typical pattern.
Information about the geographic dispersion of our risk in force and delinquency inventory can be found in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q. A decline in home prices may make it more difficult for borrowers to sell or refinance their homes, increasing the chances of default.
Information about the geographic dispersion of our risk in force and delinquency inventory can be found in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q. A decline in home prices may make it more difficult for borrowers to sell or refinance their homes, increasing the risk of default.
As reinsurance does not relieve us of our obligation to pay claims to our policyholders, our inability to recover losses from a reinsurer could have a material impact on our results of operations and financial condition. The GSEs may change the credit they allow under the PMIERs for risk ceded under our reinsurance transactions.
As reinsurance does not relieve us of our obligation to pay claims to our policyholders, our inability to recover losses from a reinsurer could have a material impact on our results of operations and financial condition. Additionally, the GSEs may change the credit they allow under the PMIERs for risk ceded under our reinsurance transactions.
Risk Factors Relating to Our Business Generally If our risk management programs are not effective in identifying, or adequate in controlling or mitigating, the risks we face, or if the models we use are inaccurate, it could have a material adverse impact on our business, results of operations and financial condition.
Risk Factors Relating to Our Business Generally If our risk management programs are not effective in identifying, controlling or mitigating the risks we face, or if the models we use are inaccurate, it could have a material adverse impact on our business, results of operations and financial condition.
For a discussion of the amount of capital we are required to hold, see our risk factor titled " We may not continue to meet the GSEs’ private mortgage insurer eligibility requirements and our returns may decrease if we are required to maintain more capital in order to maintain our eligibility ." If state or federal regulations or statutes are changed in ways that ease mortgage lending standards and/or requirements, or if lenders seek ways to replace business in times of lower mortgage originations, it is possible that more mortgage loans could be originated with higher risk characteristics than are currently being originated, such as loans with lower FICO scores and higher DTI ratios.
For a discussion of the amount of capital we are required to hold, see our risk factor titled " We may not continue to meet the GSEs’ private mortgage insurer eligibility requirements and our returns may decrease if we are required to maintain more capital in order to maintain our eligibility ." If state or federal regulations or statutes are changed in ways that ease mortgage lending standards and/or requirements, or if lenders seek ways to replace business in times of lower mortgage originations, it is possible that more mortgage loans could be originated with higher risk characteristics than are currently being originated, such as loans with lower credit scores and higher DTI ratios.
We have delegated authority to the GSEs to implement certain loss mitigation options (e.g., modifications, short sales, deeds-in-lieu and foreclosure bidding) on certain loans we insure. The GSEs in turn have delegated such authority to most of their approved servicers, pursuant to delegation agreements.
We have delegated authority to the GSEs to implement certain loss mitigation options (e.g., modifications, short sales, and deeds-in-lieu of foreclosure) on certain loans we insure. The GSEs in turn have delegated such authority to most of their approved servicers, pursuant to delegation agreements.
The relative newness of AI technology, and the lack of laws, regulations or standards governing its use may also increase the risk of misuse by us or by third parties with whom we do business.
The relative newness of AI technology, and the lack of uniform laws, regulations or standards governing its use may also increase the risk of misuse by us or by third parties with whom we do business.
Although their scope varies, state insurance laws generally grant broad supervisory powers to agencies or officials to examine insurance companies and enforce rules or exercise discretion affecting almost every significant aspect of the insurance business, including payment for the referral of insurance business, premium rates and discrimination in pricing, and minimum capital requirements.
Although their scope varies, state insurance laws generally grant broad supervisory powers to agencies or officials to examine insurance companies and enforce rules or exercise discretion affecting almost every significant aspect of the insurance business, including payment for the referral of insurance business, establishing premium rates, discrimination in pricing and underwriting, and minimum capital requirements.
Servicers who service GSE-owned loans are required to operate under the GSEs' required standards in accepting certain loss mitigation alternatives. We rely on these servicers to appropriately make decisions to mitigate our exposure to loss. In some cases, loss mitigation decisions may not be favorable to us and may increase the incidence of paid claims.
Servicers who service GSE-owned loans are required to operate under the GSEs' required standards in accepting certain loss mitigation alternatives. We rely on these servicers to appropriately make decisions to mitigate our exposure to loss. In some cases, loss mitigation decisions may not be favorable to us and may increase the incidence and/or severity of paid claims.
Therefore, if our direct risk-in-force increases through increases in NIW, or if our mix of business changes to include loans with higher LTV ratios or lower FICO scores, for example, all other things equal, we will be required to hold more Available Assets in order to maintain GSE eligibility.
Therefore, if our direct risk-in-force increases through increases in NIW, or if our mix of business changes to include loans with higher LTV ratios or lower credit scores, for example, all other things equal, we will be required to hold more Available Assets in order to maintain GSE eligibility.
In addition, business under customized rate plans is awarded by certain customers for only limited periods of time. As a result, our NIW may fluctuate more than it had in the past. Failure to maintain our business relationships and business volumes with our largest customers could materially impact our business.
In addition, business under customized rate plans is awarded by certain customers for only limited periods of time. As a result, our NIW may fluctuate more than it has in the past. Failure to maintain our business relationships and business volumes with our largest customers could materially impact our business.
Reinsurance may be unavailable at current levels and prices, and/or the GSEs may reduce the amount of capital credit we receive for our reinsurance transactions. We have in place QSR and XOL reinsurance transactions providing various amounts of coverage on our risk in force as of December 31, 2024.
Reinsurance may be unavailable at current levels and prices, and/or the GSEs may reduce the amount of capital credit we receive for our reinsurance transactions. We have in place QSR and XOL reinsurance transactions providing various amounts of coverage on our risk in force as of December 31, 2025.
The development and use of artificial intelligence ("AI") may increase our information security risks. For example, it may be more difficult to defend against cybersecurity breaches if AI is used to create attacks or bypass security measures.
The development and use of AI may increase our information security risks. For example, it may be more difficult to defend against cybersecurity breaches if AI is used to create attacks or bypass security measures.
Losses that may occur from loans that are not delinquent are not reflected in our financial statements, except when a "premium deficiency" is recorded. A premium deficiency would be recorded if the present value of expected future losses and expenses exceeds the present value of expected future premiums and already established loss reserves on the applicable loans.
Losses that may occur from loans that are not delinquent are not reflected in our financial statements, except when a "premium deficiency" is recorded. A premium deficiency would be recorded if the present value of expected future losses and expenses exceeds the present value of expected future premiums, anticipated investment income, and already established loss reserves on the applicable loans.
The inability of these providers to successfully provide and support those products could have an adverse impact on our business and results of operations. From time to time we upgrade, automate or otherwise transform our information systems, business processes, risk-based pricing system, and our system for evaluating risk.
The inability of these providers to successfully provide and support those products could have a material adverse impact on our business and results of operations. From time to time we upgrade, automate or otherwise transform our information systems, business processes, risk-based pricing system, and our system for evaluating risk.
Business practices of the GSEs that affect the mortgage insurance industry include: MGIC Investment Corporation 2024 Form 10-K | 27 MGIC Investment Corporation and Subsidiaries • The GSEs' private mortgage insurer eligibility requirements ("PMIERs"), the financial requirements of which are discussed in our risk factor titled “We may not continue to meet the GSEs’ private mortgage insurer eligibility requirements and our returns may decrease if we are required to maintain more capital in order to maintain our eligibility.” • The capital and collateral requirements for participants in the GSEs' alternative forms of credit enhancement discussed in our risk factor titled "The amount of insurance we write could be adversely affected if lenders and investors select alternatives to private mortgage insurance or are unable to obtain capital relief for mortgage insurance." • The level of private mortgage insurance coverage, subject to the limitations of the GSEs’ charters, when private mortgage insurance is used as the required credit enhancement on low down payment mortgages (the GSEs generally require a level of mortgage insurance coverage that is higher than the level of coverage required by their charters; any change in the required level of coverage will impact our new risk written). • The amount of loan level price adjustments and guaranty fees (which result in higher costs to borrowers) that the GSEs assess on loans that require private mortgage insurance.
Business practices of the GSEs that affect the mortgage insurance industry include: • The GSEs' private mortgage insurer eligibility requirements ("PMIERs"), the financial requirements of which are discussed in our risk factor titled “We may not continue to meet the GSEs’ private mortgage insurer eligibility requirements and our returns may decrease if we are required to maintain more capital in order to maintain our eligibility.” • The capital and collateral requirements for participants in the GSEs' alternative forms of credit enhancement discussed in our risk factor titled "The amount of insurance we write could be adversely affected if lenders and investors select alternatives to private mortgage insurance or are unable to obtain capital relief for mortgage insurance." • The level of private mortgage insurance coverage, subject to the limitations of the GSEs’ charters, when private mortgage insurance is used as the required credit enhancement on low down payment mortgages (the GSEs generally require a level of mortgage insurance coverage that is higher than the level of coverage required by their charters; any change in the required level of coverage will impact our new risk written). • The amount of loan level price adjustments and guaranty fees (which result in higher costs to borrowers) that the GSEs assess on loans that require private mortgage insurance.
To the extent that we are construed to make independent credit decisions in connection with our contract underwriting activities, we also could be subject to increased regulatory requirements under the Equal Credit Opportunity Act ("ECOA"), FCRA, and other laws.
To the extent that we are construed to have made independent credit decisions in connection with our contract underwriting activities, we also could be subject to increased regulatory requirements under the Equal Credit Opportunity Act ("ECOA"), FCRA, and other laws.
Changes in the status, powers, or supervision of the GSEs, whether through legislation or administrative action, could impact private mortgage insurers, which would have an adverse effect on our business, revenue, results of operations and financial condition.
Changes in the status, powers, or supervision of the GSEs, whether through legislation or administrative action, that impact private mortgage insurers could have an adverse effect on our business, revenue, results of operations and financial condition.
For more information about state capital requirements, see our risk factor titled “ State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis .” For information about regulation of data privacy, see our risk factor titled “ We could be materially adversely affected by a cybersecurity breach or failure of information security controls .” For more details about the various ways in which our subsidiaries are regulated, see “Business - Regulation” in Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2023.
For more information about state capital requirements, see our risk factor titled “ State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis .” For information about regulation of data privacy, see our risk factor titled “ We could be materially adversely affected by a cybersecurity breach or failure of information security controls .” For more details about the various ways in which our subsidiaries are regulated, see “Business - Regulation” in Item 1 of our Annual Report in this Form 10-K.
The increased use by the private mortgage insurance industry of risk-based pricing systems that establish premium rates based on more attributes than previously considered, and of algorithms, artificial intelligence and data and analytics, has led to additional regulatory scrutiny of premium rates and of other matters such as discrimination in pricing and underwriting, data privacy and access to insurance.
The increased use by the private mortgage insurance industry of risk-based pricing systems that establish premium rates based on more attributes than previously considered, and of algorithms, artificial intelligence and data and analytics, has led to additional regulatory scrutiny of these and other matters such as data privacy and access to insurance.
Additional lawsuits, legal and regulatory proceedings and inquiries or other matters may arise in the future. The outcome of future legal and regulatory proceedings, inquiries or other matters could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief which could require significant expenditures or have a material adverse effect on our business, results of operations and financial condition.
The outcome of future legal and regulatory proceedings, inquiries or other matters could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief which could require significant expenditures or have a material adverse effect on our business, results of operations and financial condition.
" • The programs established by the GSEs intended to avoid or mitigate loss on insured mortgages and the circumstances in which mortgage servicers must implement such programs. • The terms that the GSEs require to be included in mortgage insurance policies for loans that they purchase, including limitations on the rescission rights of mortgage insurers. • The extent to which the GSEs intervene in mortgage insurers’ claims paying practices, rescission practices or rescission settlement practices with lenders. • The maximum loan limits of the GSEs compared to those of the Federal Housing Administration ("FHA") and other investors. • The benchmarks established by the FHFA for loans to be purchased by the GSEs, which can affect the loans available to be insured.
" • The programs established by the GSEs intended to avoid or mitigate loss on insured mortgages and the circumstances in which mortgage servicers must implement such programs. • The terms that the GSEs require to be included in mortgage insurance policies for loans that they purchase, including limitations on the rescission rights of mortgage insurers. • The extent to which the GSEs intervene in mortgage insurers’ claims paying practices, rescission practices or rescission settlement practices with lenders. • The maximum loan limits of the GSEs compared to those of the Federal Housing Administration ("FHA") and other investors. • Benchmarks established by the FHFA for loans to be purchased by the GSEs, which can affect the loans available to be insured. • The establishment, modification, or termination of programs intended to promote affordable housing for low-income borrowers.
MGIC Investment Corporation 2024 Form 10-K | 40 MGIC Investment Corporation and Subsidiaries Item 1B. Unresolved Staff Comments None. Item 1C. Cybersecurity RISK MANAGEMENT AND STRATEGY MGIC’s Information Security Program (ISP) includes information security policies, annual risk assessments and analyses, threat monitoring and alerting, vulnerability management, incident response, and data loss prevention controls.
MGIC Investment Corporation 2025 Form 10-K | 39 Item 1B. Unresolved Staff Comments None. Item 1C. Cybersecurity Risk Management and Strategy MGIC’s Information Security Program ("ISP") includes information security policies, annual risk assessments and analyses, threat monitoring and alerting, vulnerability management, incident response, and data loss prevention controls.
The GSEs (and other investors) have also used other forms of credit enhancement that did not involve traditional private mortgage insurance, such as engaging in credit-linked note transactions executed in the capital markets, or using other forms of debt issuances or securitizations that transfer credit risk directly to other investors, including competitors and an affiliate of MGIC; using other risk mitigation techniques in conjunction with reduced levels of private mortgage insurance coverage; or accepting credit risk without credit enhancement.
MGIC Investment Corporation 2025 Form 10-K | 31 The GSEs (and other investors) have also used other forms of credit enhancement that did not involve traditional private mortgage insurance, such as engaging in credit-linked note transactions executed in the capital markets, or using other forms of debt issuances or securitizations that transfer credit risk directly to other investors, including competitors and an affiliate of MGIC; using other risk mitigation techniques in conjunction with reduced levels of private mortgage insurance coverage; or accepting credit risk without credit enhancement.
The FHA's share of the low down payment residential mortgages that were subject to FHA, VA, USDA or primary private mortgage insurance was 33.5% in 2024, 33.2% in 2023, and 26.7% in 2022. Since 2012, the FHA’s market share has been as low as 23.4% (2020) and as high as 42.1% (in 2012).
The FHA's share of the low down payment residential mortgages that were subject to FHA, VA, USDA or primary private mortgage insurance was 34.3% in 2025, 33.5% in 2024, and 33.2% in 2023. Since 2012, the FHA’s market share has been as low as 23.4% (2020) and as high as 42.1% (in 2012).
Our underwriting practices and the mix of business we write affects our Minimum Required Assets under the PMIERs, our premium yields and the likelihood of losses occurring.
Our underwriting practices and the mix of business we write affects our Minimum Required Assets under the PMIERs, our premium yields and the likelihood of claims.
Approximately 71% of our NIW during 2024 and 2023 was originated under delegated underwriting programs pursuant to which the loan originators had authority on our behalf to underwrite the loans for our mortgage insurance.
Approximately 70% of our NIW in 2025 and 71% of our 2024 NIW was originated under delegated underwriting programs pursuant to which the loan originators had authority on our behalf to underwrite the loans for our mortgage insurance.
We employ proprietary and third-party models for a wide range of purposes, including the following: projecting losses, premiums, expenses, and returns; pricing products (through our risk-based pricing system); determining the techniques used to underwrite insurance; estimating reserves; evaluating risk; determining internal capital requirements; and performing stress testing.
We employ proprietary and third-party models for a wide range of purposes, including the following: projecting losses, premiums, expenses, and returns; pricing products; determining the techniques used to underwrite insurance; estimating reserves; evaluating risk; determining internal capital requirements; procuring automated valuations; and performing stress testing.
Moreover, we may use information we receive through enhancements to refine or otherwise change existing assumptions and/or methodologies. Information technology system failures or interruptions may materially impact our operations and/or adversely affect our financial results. We are heavily dependent on our information technology systems to conduct our business.
Moreover, we may use information we receive through enhancements to refine or otherwise change existing assumptions and/or methodologies. Failed, disrupted, or inadequate information technology systems may materially impact our operations and/or adversely affect our financial results. We are heavily dependent on our information technology systems to conduct our business.
Wisconsin, where MGIC is domiciled, has begun the process to replace current mortgage insurance regulations with the Model Act, though it is expected that some changes will be made before formal adoption.
Wisconsin, where MGIC is domiciled, has begun the process to replace current mortgage insurance regulations with the Model Act; however it is expected that modifications will be made before formal adoption.
Downgrades in our financial strength ratings could materially affect our business and results of operations, including in the ways described below: • Our failure to maintain a rating acceptable to the GSEs could impact our eligibility as an approved insurer under PMIERs. • A downgrade in our financial strength ratings could result in increased scrutiny of our financial condition by the GSEs and/or our customers, potentially resulting in a decrease in the amount of our NIW. • If we are unable to compete effectively in the current or any future markets as a result of the financial strength ratings assigned to our insurance subsidiaries, our future NIW could be negatively affected. • Our ability to participate in the non-GSE residential mortgage-backed securities market (the size of which has been limited since 2008, but may grow in the future), could depend on our ability to maintain and improve our investment grade ratings for our insurance subsidiaries.
Downgrades in our financial strength and/or credit ratings could materially affect our business and results of operations, including in the ways described below: • Our failure to maintain a rating acceptable to the GSEs could impact our eligibility as an approved insurer under PMIERs. • A downgrade in our financial strength ratings could result in increased scrutiny of our financial condition by the GSEs and/or our customers, potentially resulting in a decrease in the amount of our NIW. • If we are unable to compete effectively in the future as a result of the financial strength ratings assigned to our insurance subsidiaries, our future NIW could be negatively affected. • Our ability to participate in the non-GSE residential mortgage-backed securities market could depend on our ability to maintain and improve our investment grade ratings for our insurance subsidiaries.
Even though we do not generally insure losses related to property damage, the inability of a borrower to obtain hazard and/or flood insurance, or the increased cost of such insurance, could lead to a decrease in home prices in the affected areas and an increase in delinquencies and our incurred losses.
Even though we do not generally insure losses related to property damage, the inability of a borrower to obtain hazard and/or MGIC Investment Corporation 2025 Form 10-K | 29 flood insurance, or the increased cost of such insurance, could lead to a decrease in home prices in the affected areas and an increase in delinquencies and our incurred losses.
Without a properly skilled and experienced workforce, our costs, including productivity costs and costs to replace employees may increase, and this could negatively impact our earnings. Competition or changes in our relationships with our customers could reduce our revenues, reduce our premium yields and / or increase our losses.
Without a properly skilled and experienced workforce, our costs, including productivity costs and costs to replace employees may increase, and this could negatively impact our earnings. Competition or changes in our relationships with our customers could reduce our revenues, reduce our premium yields and / or increase our losses. The mortgage insurance industry is highly competitive.
The Risk Management Committee of the Board coordinates with the Board and other Board committees regarding the assignment to the Board and Committees of oversight responsibilities for all identified key risks to the Company. Risks related to cybersecurity are overseen by the BTTC.
The Risk Management Committee of the Board coordinates with the Board and other Board committees regarding the assignment to the Board and Committees of oversight responsibilities for all identified key risks to the Company. Risks related to cybersecurity are overseen by the BTTC. The BTTC monitors cybersecurity risks associated with both internal and external actors.
Updates may include topics such as management’s efforts to identify and monitor risks, investments to improve the Company’s detection and response systems, the results of risk assessments, compliance with controls, vendor oversight, strategic technology planning, and if necessary, the status of any new, ongoing, or prior cybersecurity incident.
Updates may include topics such as management’s efforts to identify and monitor risks, investments to improve the Company’s detection and response systems, the results of risk assessments, compliance with controls, vendor oversight, strategic technology planning, and if necessary, the status of any new, ongoing, or prior cybersecurity incident. Senior members of the IRM team also periodically attend the BTTC meetings.
As a result, changes in economic conditions or the practices of the GSEs, higher than anticipated claims, or other unexpected events generally cannot be addressed by premium increases on policies in force or mitigated by our non-renewal or cancellation of insurance coverage.
Generally, we cannot cancel mortgage insurance coverage or adjust renewal premiums during the life of a policy. As a result, changes in economic conditions or the practices of the GSEs, higher than anticipated claims, or other unexpected events generally cannot be addressed by premium increases on policies in force or mitigated by our non-renewal or cancellation of insurance coverage.
The factors that may affect the volume of low down payment mortgage originations include the health of the U.S. economy; conditions in regional and local economies and the level of consumer confidence; the health and stability of the financial services industry; restrictions on mortgage credit due to more stringent underwriting standards, liquidity issues or risk-retention and/or capital requirements affecting lenders; the level of home mortgage interest rates; housing affordability; new and existing housing availability; the rate of household formation, which is influenced, in part, by population and immigration trends; homeownership rates; the rate of home price appreciation, which in times of heavy refinancing can affect whether refinanced loans have LTV ratios that require private mortgage insurance; tax policy; and government housing policy encouraging equitable housing and loans to first-time homebuyers.
The factors that may affect the volume of low down payment mortgage originations include the health of the U.S. economy; conditions in regional and local economies and the level of consumer confidence; the health and stability of the financial services industry; restrictions on mortgage credit due to more stringent underwriting standards, liquidity issues or risk-retention and/or capital requirements affecting lenders; the level of home mortgage interest rates; housing affordability; new and existing housing availability; the rate of household formation, which is influenced, in part, by population and immigration trends; homeownership rates; the rate of home price appreciation, which in times of heavy refinancing can affect whether refinanced loans have LTV ratios that require private mortgage insurance; the extent to which the GSEs' business practices shift the market away from the GSEs to the FHA, other government execution channels, or lender portfolios; tax policy; and government housing policy.
Mortgage insurers, including MGIC, have MGIC Investment Corporation 2024 Form 10-K | 29 MGIC Investment Corporation and Subsidiaries in the past been involved in litigation and regulatory actions related to alleged violations of the anti-referral fee provisions of the Real Estate Settlement Procedures Act ("RESPA"), and the notice provisions of the Fair Credit Reporting Act ("FCRA").
Mortgage insurers, including MGIC, have in the past been involved in litigation and regulatory actions related to alleged violations of the anti-referral fee provisions of the Real Estate Settlement Procedures Act ("RESPA"), and the notice provisions of the Fair Credit Reporting Act ("FCRA").
As a result, they reduce the risk-based capital that we are required to hold to support the risk and they allow us to earn higher returns on risk-based capital for our business than we would without them. MGIC Investment Corporation 2024 Form 10-K | 30 MGIC Investment Corporation and Subsidiaries However, market conditions impact the availability and cost of reinsurance.
As a result, they reduce the risk-based capital that we are required to hold to support the risk and they allow us to earn higher returns on risk-based capital for our business than we would without them. However, market conditions impact the availability and cost of reinsurance.
Threats have the potential to jeopardize the information processed and stored in, and transmitted through, our computer systems and networks and otherwise cause interruptions or MGIC Investment Corporation 2024 Form 10-K | 34 MGIC Investment Corporation and Subsidiaries malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction.
Threats have the potential to jeopardize the information processed and stored in, and transmitted through, our computer systems and networks and otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction.
The payment of dividends from MGIC is subject to regulatory approval as described in our Annual Reports on Form 10-K. In general, dividends in excess of prescribed limits are deemed “extraordinary” and may not be paid if disapproved by the OCI.
The payment of dividends from MGIC is subject to regulatory approval as described in our Annual Reports on Form 10-K. In general, dividends in excess of prescribed limits are deemed “extraordinary” and may not be paid if disapproved by the Office of the Commissioner of Insurance of the MGIC Investment Corporation 2025 Form 10-K | 38 State of Wisconsin ("OCI").
Our enterprise risk management program, described in "Business - Our Products and Services - Risk Management" in Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2023, may not be effective in identifying, or adequate in controlling or mitigating, the risks we face in our business.
Our enterprise risk management program, described in "Business - Our Products and Services - Risk Management" in Item 1 of our Annual Report in this Form 10-K, may not be effective in identifying, or adequate in controlling or mitigating, the risks we face in our business.
The IRM team’s primary focus is the protection of the confidentiality, integrity, and availability of sensitive information and compliance with relevant laws, regulations, and industry standards. The IRM team is overseen by the Company's Chief Information Security Officer (CISO). Our ISP is benchmarked against the National Institute of Standards and Technology (NIST) Cybersecurity Framework.
The IRM team’s primary focus is the protection of the confidentiality, integrity, and availability of sensitive information and compliance with relevant laws, regulations, and industry standards. The IRM team is currently overseen by the Company's Senior Director, Information Systems – Security Technology (“Senior Director”). Our ISP is benchmarked against the National Institute of Standards and Technology ("NIST") Cybersecurity Framework.
In recent years, pricing has become a key competitive factor in the private mortgage insurance market, with an increasing number of customers prioritizing the lowest premium rate available for any particular loan.
MGIC Investment Corporation 2025 Form 10-K | 36 In recent years, pricing has become a key competitive factor in the private mortgage insurance market, with an increasing number of customers prioritizing the lowest premium rate available for any particular loan.
MGIC Investment Corporation 2024 Form 10-K | 39 MGIC Investment Corporation and Subsidiaries If any capital contributions to our subsidiaries are required, such contributions would decrease our holding company cash and investments. Your ownership in our company may be diluted by additional capital that we raise.
If any capital contributions to our subsidiaries are required, such contributions would decrease our holding company cash and investments. Your ownership in our company may be diluted by additional capital that we raise.
A decline in home prices may occur even absent a deterioration in economic conditions due to declines in demand for homes, which in turn may result from changes in buyers’ perceptions of the potential for future appreciation, restrictions on and the cost of mortgage credit due to more stringent underwriting standards, higher interest rates, changes to the tax deductibility of mortgage interest, decreases in the rate of household formations, or other factors.
A decline in home prices may occur even absent a deterioration in economic conditions, such as changes in buyers’ perceptions of the potential for future appreciation, restrictions on and the cost of mortgage credit due to more stringent underwriting standards, elevated interest rates, increased cost of homeowners insurance, changes to the tax deductibility of mortgage interest, decreases in the rate of household formations, or other factors.
Under the XOL reinsurance transactions, for the respective reinsurance coverage periods, we retain the first layer of aggregate losses and the reinsurers provide second layer coverage up to the outstanding reinsurance coverage amount.
Under the XOL reinsurance transactions, for the respective MGIC Investment Corporation 2025 Form 10-K | 34 reinsurance coverage periods, we retain the first layer of aggregate losses and the reinsurers provide second layer coverage up to the outstanding reinsurance coverage amount.
While these proceedings in the aggregate did not result in material liability for MGIC, there can be no assurance that the outcome of future proceedings, if any, under these laws or others would not have a material adverse effect on us. We provide contract underwriting services, including on loans for which we are not providing mortgage insurance.
While these proceedings in the aggregate did not result in material liability for MGIC, there can be no assurance that the outcome of future proceedings, if any, under these laws or others would not have a material adverse effect on us.
This may cause liquidity issues, especially for non-bank servicers (who service approximately 55% of the loans underlying our IIF as of December 31, 2024) because they do not have the same sources of liquidity that bank servicers have.
This may cause liquidity issues, especially for non-bank servicers (who service approximately 59% of the loans underlying our IIF as of December 31, 2025) because they do not have the same sources of liquidity that bank MGIC Investment Corporation 2025 Form 10-K | 32 servicers have.
The PMIERs provide a list of remediation actions for a mortgage insurer's non-compliance, with additional actions possible in the GSEs' discretion. At the extreme, the GSEs may suspend or terminate our eligibility to insure loans purchased by them.
Such failure may restrict or delay us from taking certain actions that would be advantageous to our investors. The PMIERs provide a list of remediation actions for a mortgage insurer's non-compliance, with additional actions possible in the GSEs' discretion. At the extreme, the GSEs may suspend or terminate our eligibility to insure loans purchased by them.
Refer to Part 1, Note 4 – “Reinsurance” and Part 1, Item 2 “Consolidated Results of Operations – Reinsurance Transactions” of our Quarterly Report on Form 10-Q, for more information about coverage under our reinsurance transactions. The reinsurance transactions reduce the tail-risk associated with stress scenarios.
Refer to Part II, Item 8, Note 7 – “Reinsurance” and Part II, Item 7 “Consolidated Results of Operations – Reinsurance Transactions” of our Annual Report in this Form 10-K, for more information about coverage under our reinsurance transactions. The reinsurance transactions reduce the tail-risk associated with stress scenarios.
We operate in a highly regulated industry that is subject to the risk of litigation and regulatory proceedings, including related to our claims paying practices. From time to time, we are a party to material litigation and are also subject to legal and regulatory claims, assertions, actions, reviews, audits, inquiries and investigations.
We are subject to the risk of legal proceedings. We operate in a highly regulated industry that is subject to the risk of litigation and regulatory proceedings, including related to our claims paying practices.
Generally, the longer a loan is delinquent before a claim is received, the greater the severity. Foreclosure moratoriums and forbearance programs increase the average time it takes to receive claims.
Generally, the longer a loan is delinquent before a claim is received, the greater the severity. Forbearance programs intended to preserve homeownership for borrowers at risk of foreclosure increase the average time it takes to receive claims.
Our premium yield is expected to decline over time as older insurance policies with premium rates that are generally higher run off and new insurance policies with premium rates that are generally lower remain on our books.
Our premium yield is expected to decline over time as older insurance policies with premium rates that are generally higher run off and new insurance policies with premium rates that are generally lower remain on our books. Additionally, technological advancements and innovation are occurring at a rapid pace that may continue to accelerate.
In the event that the CIRT confirms that the incident relates to a cybersecurity incident or compromise of MGIC’s computer systems, the CISO will notify the General Counsel, who will advise the Chief Executive Officer ("CEO"), who is a member of the Board of Directors.
In the event that the CIRT determines that there has been a cybersecurity incident or compromise of MGIC’s computer systems, the General Counsel will be notified, and, will advise the Chief Executive Officer ("CEO"), who is a member of the Board of Directors.
Financial strength ratings, which various rating agencies publish as independent opinions of an insurer's financial strength and ability to meet ongoing insurance and contract obligations, are important to maintaining public confidence in our mortgage insurance coverage and our competitive position. PMIERs requires approved insurers to maintain at least one rating with a rating agency acceptable to the respective GSEs.
Financial strength and credit ratings are important to maintaining public confidence in our mortgage insurance coverage and our competitive position. PMIERs requires approved insurers to maintain at least one financial strength rating with a rating agency acceptable to the respective GSEs.
Given that the Director of the FHFA serves at the pleasure of the President, the agency's agenda, policies and actions may be influenced by the then-current administration. When a new administration is sworn in, the policy direction and oversight of the GSEs may change.
Given that the Director of the FHFA serves at the pleasure of the President, the agency's agenda, policies and actions may be influenced by the then-current administration.
You should read the rest of these risk factors for information about matters that could negatively affect MGIC’s compliance with State Capital Requirements and its claims paying resources.
You should read the rest of these risk factors for information about matters that could negatively affect MGIC’s compliance with State Capital Requirements and its claims paying resources. If the volume of low down payment home mortgage originations declines, the amount of insurance that we write could decline.
MGIC Investment Corporation 2024 Form 10-K | 36 MGIC Investment Corporation and Subsidiaries Actual or perceived instability in the financial services industry or non-performance by financial institutions or transactional counterparties could materially impact our business.
Actual or perceived instability in the financial services industry or non-performance by financial institutions or transactional counterparties could materially impact our business.
While we have established policies and procedures to comply with applicable laws and regulations, many such laws and regulations are complex and it is not possible to predict the eventual scope, duration or outcome of any reviews or investigations nor is it possible to predict their effect on us or the mortgage insurance industry.
While we have established policies and procedures to comply with applicable laws and regulations, many such laws and regulations are complex and it is not possible to predict the eventual scope, duration or outcome of any reviews or investigations. A regulatory action against us could have an adverse material adverse effect on our reputation, business and financial results.
These services are subject to contractual obligations and federal and state regulation. Our failure to meet the standards set forth in the applicable contracts or regulations would subject us to potential litigation or regulatory action.
In the past we have provided contract underwriting services, including on loans for which we are not providing mortgage insurance. These services are subject to contractual obligations and federal and state regulation. Our failure to meet the standards set forth in the applicable contracts or regulations would subject us to potential litigation or regulatory action.
Pandemics, hurricanes and other disasters may adversely impact our results of operations and financial condition.
The effects of pandemics, severe weather events, or other disasters may adversely impact our results of operations and financial condition.
The PMIERs provide that the GSEs may amend any provision of the PMIERs or impose additional requirements with an effective date specified by the GSEs.
The PMIERs include financial requirements, as well as business, quality control and certain transaction approval requirements. The PMIERs provide that the GSEs may amend any provision of the PMIERs or impose additional requirements with an effective date specified by the GSEs.
An increase in the number or size of claims, compared to what we anticipated when we set the premiums, could adversely affect our results of operations or financial condition. Our premium rates are also based in part on the amount of capital we are required to hold against the insured risk.
An increase in the number or size of claims, compared to what we anticipated when we set the premiums, could adversely affect our results of operations or financial condition.
Recently reported increases in the credit quality of borrowers, and the relative financial results of the existing mortgage insurance companies, may encourage new entrants into the private mortgage insurance industry, which could further increase competition in our business. Changes in the competitive landscape, including as a result of new market entrants, may adversely impact our results.
Recently reported increases in the credit quality of borrowers, and the relative financial results of the existing mortgage insurance companies, may encourage new entrants into the private mortgage insurance industry, which could further increase competition in our business. Based on public disclosures, a potential new market entrant intends to begin writing mortgage insurance in 2026.
Additionally, a decline in home prices may result in loan balances exceeding home values, discouraging borrowers from continuing to make payments. The seasonally-adjusted Purchase-Only U.S.
A decline in home prices may result in loan balances exceeding home values, discouraging borrowers from continuing to make payments. Although the rate of home price appreciation recently reached historically high rates, the rate of growth is moderating: according to the seasonally-adjusted Purchase-Only U.S.
Home Price Index of the Federal Housing Finance Agency (the “FHFA”), which is based on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac, indicates that home prices increased .3% nationwide in November, 2024 compared to October, 2024.
Home Price Index of the Federal Housing Finance Agency (the “FHFA”), which is based on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac, home prices increased by 1.4% from January 2025 through November 2025, after increasing 4.8% and 6.7% in 2024 and 2023, respectively.
Our policies generally allow us to cancel coverage on loans that are not delinquent if the premiums are not paid within a grace period.
Servicers who experience future liquidity issues may be less likely to advance premiums to us on policies covering delinquent loans or to remit premiums on policies covering loans that are not delinquent. Our policies generally allow us to cancel coverage on loans that are not delinquent if the premiums are not paid within a grace period.
More recently, in November 2024, it was announced that the proposed rule will be placed on hold pending the installation of the new Presidential Administration. The length of time our insurance policies remain in force has a significant impact on our results.
In November 2024, it was announced that the proposed rule will be placed on hold. It is possible that in the future the proposed rule could be re-proposed or an entirely different proposal could be made. The length of time our insurance policies remain in force has a significant impact on our results.
Our risk-to-capital ratio and MPP reflect credit for the risk ceded under our reinsurance agreements with unaffiliated reinsurers . If MGIC is not allowed an agreed level of credit under the State Capital Requirements, MGIC may terminate the reinsurance transactions, without penalty. In 2023, the NAIC adopted a revised Mortgage Guaranty Insurance Model Act.
MGIC's “policyholder position” includes its net worth, or surplus, and its contingency reserve. Our risk-to-capital ratio and MPP reflect credit for the risk ceded under our reinsurance agreements with unaffiliated reinsurers . If MGIC is not allowed an agreed level of credit under the State Capital Requirements, MGIC may terminate the reinsurance transactions, without penalty.
The national average price-to-income ratio exceeds its historical average, in part as a result of recent home price appreciation outpacing increases in income. Affordability issues can put downward pressure on home prices.
The national average price-to-income ratio exceeds its historical average, in part as a result of recent home price appreciation outpacing increases in income. Elevated home prices have contributed to affordability constraints, which may lead to reduced demand and downward pressure on prices at both regional and national levels.
In addition, although the PMIERs do not require minimum financial strength ratings, the GSEs consider financial strength ratings to be important when using forms of credit enhancement other than traditional mortgage insurance, as discussed in our risk factor titled " The amount of insurance we write could be adversely affected if lenders and investors select alternatives to private mortgage insurance or are unable to obtain capital relief for mortgage insurance." The final GSE capital framework provides more capital credit for transactions with higher rated counterparties, as well as those who are diversified.
In addition, although the PMIERs do not require minimum financial strength ratings, the GSEs consider financial strength ratings to be important when using forms of credit enhancement other than traditional mortgage insurance, as discussed in our risk factor titled " The amount of insurance we write could be adversely affected if lenders and investors select alternatives to private mortgage insurance or are unable to obtain capital relief for mortgage insurance." Although we are currently unaware of a direct impact on MGIC, this could potentially become a competitive disadvantage in the future. • Downgrades to our ratings or the ratings of our mortgage insurance subsidiary could adversely affect the terms and cost of funds, liquidity, and access to capital markets .
We may not be aware of industry rate changes until we observe that our mix of new insurance written has changed and our mix may fluctuate more as a result. In March 2024, the National Association of Realtors ("NAR") reached a settlement agreement to resolve a series of lawsuits against it.
We may not be aware of industry rate changes until we observe that our mix of new insurance written has changed and our mix may fluctuate more as a result.
In addition to advising the CEO, the General Counsel will also convene an established committee whose members include the General Counsel, Chief Financial and Risk Officer, Senior Vice President of Investor Relations, and Chief Accounting Officer in order to determine if the event is a material cybersecurity incident so as to trigger an Item 1.05 filing on Form 8-K.
In addition to advising the CEO, the General Counsel will also convene an established committee whose members include the General Counsel, Chief Financial and Risk Officer, Senior Vice President of Investor Relations, and Chief Accounting Officer in order to determine if the event is a material cybersecurity incident such that the Chairman of the Board, Lead Independent Director, and Chairpersons of the Board’s Business Technology and Transformation Committee (the “BTTC”) and Audit Committee should be notified.
To the extent the business practices and policies of the GSEs regarding mortgage insurance coverage, costs and cancellation change, including more broadly than through SPCPs, such changes may negatively impact the mortgage insurance industry and our financial results.
To the extent the business practices and policies of the GSEs regarding mortgage insurance coverage, costs and cancellation change, such changes may negatively impact the mortgage insurance industry and our financial results. Congress and executive branch officials have periodically proposed various plans for the reform of the GSEs, including through privatization and/or termination of FHFA's conservatorship.
Item 1A. Risk Factors As used below, “we,” “our” and “us” refer to MGIC Investment Corporation’s consolidated operations or to MGIC Investment Corporation, as the context requires; and “MGIC” refers to Mortgage Guaranty Insurance Corporation. Risk Factors Relating to Global Events Wars and/or other global events may adversely affect the U.S. economy and our business.
Item 1A. Risk Factors As used below, “we,” “our” and “us” refer to MGIC Investment Corporation’s consolidated operations or to MGIC Investment Corporation, as the context requires; and “MGIC” refers to Mortgage Guaranty Insurance Corporation. Risk Factors Relating to the Mortgage Insurance Industry and its Regulation Economic downturns and/or declines in home prices may lead to increased losses.
The BTTC monitors cybersecurity risks associated with both internal and external actors, including third-party vendors and service providers. Additional information about the BTTC’s role in overseeing risks related to cybersecurity and information technology generally can be found in the Committee’s Charter at mtg.mgic.com/corporate-governance/highlights. The CISO provides quarterly updates about the Company’s cybersecurity program to the BTTC.
Additional information about the BTTC’s role in overseeing risks related to cybersecurity and information technology generally can be found in the Committee’s Charter at mtg.mgic.com/corporate-governance/highlights. Risks related to AI are overseen by the Risk Management Committee of the Board. The IRM team provides quarterly updates about the Company’s cybersecurity program to the BTTC.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changePrimary NIW by FICO score Years Ended December 31, (% of primary NIW) 2024 2023 760 and greater 50.9 % 49.9 % 740 - 759 17.4 % 18.3 % 720 - 739 13.5 % 13.4 % 700 - 719 9.1 % 9.0 % 680 - 699 5.2 % 5.2 % 660 - 679 2.8 % 2.8 % 640 - 659 0.8 % 1.0 % 639 and less 0.3 % 0.4 % Total 100 % 100 % Primary NIW by loan-to-value Years Ended December 31, (% of primary NIW) 2024 2023 95.01% and above 13.7 % 12.2 % 90.01% to 95.00% 47.3 % 45.5 % 85.01% to 90.00% 27.7 % 30.8 % 80.01% to 85% 11.3 % 11.5 % Total 100 % 100 % Primary NIW by debt-to-income ratio Years Ended December 31, (% of primary NIW) 2024 2023 45.01% and above 28.9 % 26.4 % 38.01% to 45.00% 31.6 % 32.3 % 38.00% and below 39.5 % 41.3 % Total 100 % 100 % Primary NIW by policy payment type Years Ended December 31, (% of primary NIW) 2024 2023 Monthly premiums 97.6 % 96.0 % Single premiums 2.4 % 4.0 % Annual Premiums 0.0 % 0.0 % Total 100 % 100 % MGIC Investment Corporation 2024 Form 10-K | 58 MGIC Investment Corporation and Subsidiaries Primary NIW by type of mortgage Years Ended December 31, (% of primary NIW) 2024 2023 Purchases 96.0 % 98.2 % Refinances 4.0 % 1.8 % Total 100 % 100 % We consider a variety of loan characteristics when assessing the risk of a loan.
Biggest changePrimary NIW by FICO Score Years Ended December 31, (% of primary NIW) 2025 2024 760 and greater 51.7 % 50.9 % 740 - 759 17.4 % 17.4 % 720 - 739 13.2 % 13.5 % 700 - 719 8.7 % 9.1 % 680 - 699 4.9 % 5.2 % 660 - 679 2.7 % 2.8 % 640 - 659 0.9 % 0.8 % 639 and less 0.5 % 0.3 % Total 100.0 % 100.0 % Primary NIW by Loan-to-Value Years Ended December 31, (% of primary NIW) 2025 2024 95.01% and above 14.7 % 13.7 % 90.01% to 95.00% 46.2 % 47.3 % 85.01% to 90.00% 28.6 % 27.7 % 80.01% to 85% 10.5 % 11.3 % Total 100.0 % 100.0 % Primary NIW by Debt-to-Income Ratio Years Ended December 31, (% of primary NIW) 2025 2024 45.01% and above 27.0 % 28.9 % 38.01% to 45.00% 30.5 % 31.6 % 38.00% and below 42.5 % 39.5 % Total 100.0 % 100.0 % Primary NIW by Policy Payment Type Years Ended December 31, (% of primary NIW) 2025 2024 Monthly premiums 97.3 % 97.6 % Single premiums 2.7 % 2.4 % Total 100.0 % 100.0 % MGIC Investment Corporation 2025 Form 10-K | 54 Primary NIW by Type of Mortgage Years Ended December 31, (% of primary NIW) 2025 2024 Purchases 90.9 % 96.0 % Refinances 9.1 % 4.0 % Total 100.0 % 100.0 % The following table provides information about loans with one or more of the following characteristics associated with our NIW: LTV ratios greater than 95%, borrowers having FICO scores below 680, and borrowers having DTI ratios greater than 45%, each attribute as determined at the time of loan origination.
The lagged effects of the FOMC’s actions and other ongoing macroeconomic and geopolitical factors could create significant economic uncertainty and alter forward rate expectations, which may result in interest rate and credit spread volatility. Market volatility resulting from these factors, particularly the absolute level of rates and the rate of change, will continue to impact our investment valuations and returns.
The lagged effects of the FOMC’s actions and other ongoing macroeconomic and geopolitical factors could create economic uncertainty and alter forward rate expectations, which may result in interest rate and credit spread volatility. Market volatility resulting from these factors, particularly the absolute level of rates and the rate of change, will continue to impact our investment valuations and returns.
Financing activities The following list highlights the major sources and uses of cash flow from financing activities: Sources + Proceeds from debt and/or common stock issuances Uses - Repayment/repurchase of debt - Repurchase of common stock - Payment of dividends to shareholders - Payment of withholding taxes related to share-based compensation net share settlement Net cash flows used in financing activities in 2024 primarily reflects the repurchases of our common stock, dividends to shareholders, and the payment of withholding taxes related to share-based compensation net share settlement.
Financing Activities The following list highlights the major sources and uses of cash flow from financing activities: Sources + Proceeds from debt and/or common stock issuances Uses - Repayment/repurchase of debt - Repurchase of common stock - Payment of dividends to shareholders - Payment of withholding taxes related to share-based compensation net share settlement Net cash flows used in financing activities in 2025 and 2024 primarily reflects the repurchases of our common stock, dividends to shareholders, and the payment of withholding taxes related to share-based compensation net share settlement.
Refer to " Overview - Capital - GSEs " of this MD&A and our risk factor titled “We may not continue to meet the GSEs’ private mortgage insurer eligibility requirements and our returns may decrease if we are required to maintain more capital in order to maintain our eligibility” in Item 1A . for further discussion of PMIERs.
Refer to " Overview - PMIERs" of this MD&A and our risk factor titled “We may not continue to meet the GSEs’ private mortgage insurer eligibility requirements and our returns may decrease if we are required to maintain more capital in order to maintain our eligibility” in Item 1A . for further discussion of PMIERs.
For policies covered by our Traditional XOL Transactions, we retain the first layer of the aggregate losses paid, and the reinsurers will then provide second layer coverage up to the outstanding reinsurance coverage amount. We retain losses paid in excess of the outstanding reinsurance coverage amount.
For policies covered by our XOL Transactions, we retain the first layer of the aggregate losses paid, and the reinsurers will then provide second layer coverage up to the outstanding reinsurance coverage amount. We retain losses paid in excess of the outstanding reinsurance coverage amount.
We expect our in force portfolio premium yield will remain relatively flat in 2025 driven by sustained high credit quality and an elevated annual persistency. See " Overview – Factors Affecting Our Results " above for additional factors that also influence the amount of net premiums written and earned in a year.
We expect our in force portfolio premium yield will remain relatively flat in 2026 driven by sustained high credit quality and an elevated Annual Persistency. See " Overview – Factors Affecting Our Results" above for additional factors that also influence the amount of net premiums written and earned in a year.
This asset allocation is informed by, and based on, the following factors: è economic and market outlooks; è diversification effects; è security duration; è liquidity; è capital considerations; and è income tax rates. The average duration and embedded investment yield of our investment portfolio as of December 31, 2024 and 2023 is shown in the following table.
This asset allocation is informed by, and based on, the following factors: è economic and market outlooks; è diversification effects; è security duration; è liquidity; è capital considerations; and è income tax rates. The average duration and embedded investment yield of our investment portfolio as of December 31, 2025 and 2024 is shown in the following table.
If three ratings are available, the middle rating is used, otherwise the lowest rating is used. Our investment portfolio was invested in comparable security types for the years ended December 31, 2024 and December 31, 2023. See Note 5 – “Investments” to our consolidated financial statements for additional disclosure on our investment portfolio.
If three ratings are available, the middle rating is used, otherwise the lowest rating is used. Our investment portfolio was invested in comparable security types for the years ended December 31, 2025 and December 31, 2024. See Note 5 – “Investments” to our consolidated financial statements for additional disclosure on our investment portfolio.
For additional information regarding regulatory capital see Note 14 – “Statutory Information” to our consolidated financial statements as well as our risk factor titled “State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis” in Item 1A .
For additional information regarding regulatory capital see Note 13 – “Statutory Information” to our consolidated financial statements as well as our risk factor titled “State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis” in Item 1A .
MGIC Investment Corporation 2024 Form 10-K | 73 MGIC Investment Corporation and Subsidiaries LIQUIDITY AND CAPITAL RESOURCES CONSOLIDATED CASH FLOW ANALYSIS We have three primary types of cash flows: (1) operating cash flows, which consist mainly of cash generated by our insurance operations and income earned on our investment portfolio, less amounts paid for claims, interest expense and operating expenses, (2) investing cash flows related to the purchase, sale and maturity of investments and purchases of property and equipment and (3) financing cash flows generally from activities that impact our capital structure, such as changes in debt and shares outstanding, and dividend payments.
MGIC Investment Corporation 2025 Form 10-K | 69 Liquidity and Capital Resources Consolidated Cash Flow Analysis We have three primary types of cash flows: (1) operating cash flows, which consist mainly of cash generated by our insurance operations and income earned on our investment portfolio, less amounts paid for claims, interest expense and operating expenses, (2) investing cash flows related to the purchase, sale and maturity of investments and purchases of property and equipment and (3) financing cash flows generally from activities that impact our capital structure, such as changes in debt and shares outstanding, and dividend payments.
Although not anticipated in the near term, we may also contribute funds to our insurance operations to comply with the PMIERs or the State Capital Requirements. See “ Overview – Capital ” above for a discussion of these requirements. DEBT AT SUBSIDIARIES MGIC did not have any outstanding debt obligations at December 31, 2024.
Although not anticipated in the near term, we may also contribute funds to our insurance operations to comply with the PMIERs or the State Capital Requirements. See “ Overview – PMIERs” above for a discussion of these requirements. Debt at Subsidiaries MGIC did not have any outstanding debt obligations at December 31, 2025.
Although the accounting standard, ASC 944, regarding accounting and reporting by insurance entities specifically excluded mortgage insurance from its guidance relating to loss reserves, we establish loss reserves using the general principles contained in the insurance standard.
Although the accounting standard, ASC 944, regarding accounting and reporting by insurance entities specifically excludes mortgage insurance from its guidance relating to loss reserves, we establish loss reserves using the general principles contained in the insurance standard.
The underwriting expense ratio decreased in 2024 compared with 2023 due to a decrease in underwriting and operating expenses, net, and an increase in net premiums written.
The underwriting expense ratio decreased in 2025 compared with 2024 due to a decrease in underwriting and operating expenses, net, and an increase in net premiums written.
The conditions that affect the claim rate and claim severity include the current and future state of the domestic economy, including unemployment, and the current and future strength of local housing markets; exposure on insured loans; the amount of time between delinquency and claim filing (all else being equal, the longer the period between delinquency and claim filing, the greater the severity); and curtailments and rescissions.
The conditions that affect the claim rate and claim severity include the current and future state of the domestic economy, including unemployment and the current and future strength of local housing markets; exposure on insured loans; the amount of time between delinquency and claim filing (all else being equal, the longer the period between delinquency and claim filing, the greater the severity); the effectiveness of loss mitigation efforts; and curtailments and rescissions.
CAPITAL ADEQUACY PMIERs As of December 31, 2024, MGIC’s Available Assets under the PMIERs totaled approximately $5.8 billion, an excess of approximately $2.2 billion over its Minimum Required Assets; and MGIC is in compliance with the requirements of the PMIERs and eligible to insure loans delivered to or purchased by the GSEs.
Capital Adequacy PMIERs As of December 31, 2025, MGIC’s Available Assets under the PMIERs totaled approximately $5.7 billion, an excess of approximately $2.5 billion over its Minimum Required Assets; MGIC is in compliance with the requirements of the PMIERs and eligible to insure loans delivered to or purchased by the GSEs.
Premium Yield Year Ended December 31, (in basis points) 2024 2023 In force portfolio yield (1) 38.4 38.5 Premium refunds 0.0 (0.1) Accelerated earnings on single premium policies 0.3 0.4 Total direct premium yield 38.7 38.8 Ceded premiums earned, net of profit commission and assumed premiums (2) (5.7) (6.5) Net premium yield 33.0 32.3 (1) Total direct premiums earned, excluding premium refunds and accelerated premiums from single premium policy cancellations divided by average primary insurance in force.
Premium Yield Year Ended December 31, (in basis points) 2025 2024 In force portfolio yield (1) 38.1 38.4 Premium refunds (0.2) 0.0 Accelerated earnings on single premium policies 0.2 0.3 Total direct premium yield 38.1 38.7 Ceded premiums earned, net of profit commission and assumed premiums (2) (5.9) (5.7) Net premium yield 32.2 33.0 (1) Total direct premiums earned, excluding premium refunds and accelerated premiums from single premium policy cancellations divided by average primary insurance in force.
We also have purchase obligations totaling approximately $11.6 million which consist primarily of contracts related to our continued investment in our information technology infrastructure in the normal course of business. The majority of these obligations are under contracts that give us cancellation rights with notice.
We also have purchase obligations totaling approximately $19.4 million which consist primarily of contracts related to our continued investment in our information technology infrastructure in the normal course of business. The majority of these obligations are under contracts that give us cancellation rights with notice.
The payment of dividends from MGIC are the principal source of holding company cash inflow and their payment is restricted by insurance regulation. See Note 14 - “Statutory Information” to our consolidated financial statement for additional information about MGIC’s dividend restrictions.
The payment of dividends from MGIC are the principal source of holding company cash inflow and their payment is restricted by insurance regulation. See Note 13 - “Statutory Information” to our consolidated financial statements for additional information about MGIC’s dividend restrictions.
For example, as of December 31, 2024, assuming all other factors remain constant, a $1,000 increase/decrease in the average claim severity reserve factor would change the reserve amount by approximately +/- $7 million. A one percentage point increase/decrease in the average claim rate reserve factor would change the reserve amount by approximately +/- $18 million.
For example, as of December 31, 2025, assuming all other factors remain constant, a $1,000 increase/decrease in the average claim severity reserve factor would change the reserve amount by approximately +/- $7 million. A one percentage point increase/decrease in the average claim rate reserve factor would change the reserve amount by approximately +/- $19 million.
MGIC Investment Corporation 2024 Form 10-K | 54 MGIC Investment Corporation and Subsidiaries EXPLANATION AND RECONCILIATION OF OUR USE OF NON-GAAP FINANCIAL MEASURES NON-GAAP FINANCIAL MEASURES We believe that use of the Non-GAAP financial measures of adjusted pre-tax operating income (loss), adjusted net operating income (loss) and adjusted net operating income (loss) per diluted share facilitate the evaluation of the company's core financial performance thereby providing relevant information to investors.
MGIC Investment Corporation 2025 Form 10-K | 51 Explanation and Reconciliation of Our Use of Non-GAAP Financial Measures Non-GAAP Financial Measures We believe that use of the Non-GAAP financial measures of adjusted pre-tax operating income (loss), adjusted net operating income (loss) and adjusted net operating income (loss) per diluted share facilitate the evaluation of the company's core financial performance thereby providing relevant information to investors.
The following table shows the security ratings of our fixed income investments as of December 31, 2024 and 2023.
The following table shows the security ratings of our fixed income investments as of December 31, 2025 and 2024.
A positive number for a prior year indicates a deficiency of loss reserves. See Note 8 – “Loss Reserves” to our consolidated financial statements for a discussion of recent loss development. MGIC Investment Corporation 2024 Form 10-K | 80
A positive number for a prior year indicates a deficiency of loss reserves. See Note 8 – “Loss Reserves” to our consolidated financial statements for a discussion of recent loss development. MGIC Investment Corporation 2025 Form 10-K | 75
Portfolio duration and embedded investment yield December 31, 2024 2023 Effective Duration (in years) 3.9 3.8 Pre-tax yield (1) 4.0% 3.7% After-tax yield (1) 3.2% 3.0% (1) Embedded investment yield is calculated on a yield-to-worst basis.
Portfolio Duration and Embedded Investment Yield December 31, 2025 2024 Effective Duration (in years) 4.2 3.9 Pre-tax yield (1) 4.0% 4.0% After-tax yield (1) 3.2% 3.2% (1) Embedded investment yield is calculated on a yield-to-worst basis.
See Note 12 – “Income Taxes” to our consolidated financial statements for additional disclosure on the components of our deferred tax assets and liabilities.
See Note 1 6 – “Income Taxes” to our consolidated financial statements for additional disclosure on the components of our deferred tax assets and liabilities.
Number of Missed Payments of Delinquency Inventory 2004 and prior 3,077 1,793 15 2005-2008 9,707 5,857 15 2009-2015 1,889 976 10 2016 1,576 772 8 2017 2,516 1,205 7 2018 3,078 1,628 7 2019 3,058 1,505 7 2020 5,304 2,421 6 2021 10,096 4,796 6 2022 7,409 3,803 5 2023 2,831 1,464 4 2024 886 571 3 Total 51,427 26,791 9 Claim rate on new notices (1) 7.5 % December 31, 2023 Policy Year New Delinquency Notices Received in the Year Ended Delinquency Inventory Avg.
Number of Missed Payments of Delinquency Inventory 2004 and prior 3,077 1,793 15 2005-2008 9,707 5,857 15 2009-2015 1,889 976 10 2016 1,576 772 8 2017 2,516 1,205 7 2018 3,078 1,628 7 2019 3,058 1,505 7 2020 5,304 2,421 6 2021 10,096 4,796 6 2022 7,409 3,803 5 2023 2,831 1,464 4 2024 886 571 3 Total 51,427 26,791 9 Claim rate on new notices (1) 7.5 % (1) Claim rate at the time new delinquency notices are received.
Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position, improve our debt profile, and/or reduce potential dilution from our outstanding convertible debt. (3) Infrequent or unusual non-operating items. Items that are non-recurring in nature and are not part of our primary operating activities.
Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position, and/or improve our debt profile. (3) Infrequent or unusual non-operating items. Items that are non-recurring in nature and are not part of our primary operating activities.
The following table provides information related to our QSR Transactions for 2024 and 2023.
The following table provides information related to our QSR Transactions for 2025 and 2024.
Investing activities The following list highlights the major sources and uses of cash flow from investing activities: Sources + Proceeds from sales of investments + Proceeds from maturity of fixed income securities Uses - Purchases of investments We maintain an investment portfolio that is primarily invested in a diverse mix of fixed income securities.
MGIC Investment Corporation 2025 Form 10-K | 70 Investing Activities The following list highlights the major sources and uses of cash flow from investing activities: Sources + Proceeds from sales of investments + Proceeds from maturity of fixed income securities Uses - Purchases of investments We maintain an investment portfolio that is primarily invested in a diverse mix of fixed income securities.
MGIC Investment Corporation 2024 Form 10-K | 78 MGIC Investment Corporation and Subsidiaries CRITICAL ACCOUNTING ESTIMATES The accounting estimate described below requires significant judgments and estimates in the preparation of our consolidated financial statements. LOSS RESERVES The estimation of case loss reserves is subject to inherent uncertainty and requires significant judgement by management.
MGIC Investment Corporation 2025 Form 10-K | 74 Critical Accounting Estimates The accounting estimate described below requires significant judgments and estimates in the preparation of our consolidated financial statements. Loss Reserves The estimation of case loss reserves is subject to inherent uncertainty and requires significant judgment by management.
UNEARNED PREMIUM Our unearned premium decreased to $120.4 million as of December 31, 2024 from $157.8 million as of December 31, 2023 primarily due to the run-off of unearned premium on our existing portfolio of single premium policies, partially offset by new premium written on single premium policies.
Unearned Premium - Our unearned premium decreased to $93.0 million as of December 31, 2025 from $120.4 million as of December 31, 2024 primarily due to the run-off of unearned premium on our existing portfolio of single premium policies, partially offset by new premium written on single premium policies.
The PMIERs generally require us to hold significantly more Minimum Required Assets for delinquent loans than for performing loans and the Minimum Required Assets required to be held increases as the number of payments missed on a delinquent loan increases.
(See Note 1 - “Nature of Business and Basis of Presentation” .) The PMIERs generally require us to hold significantly more Minimum Required Assets for delinquent loans than for performing loans and the Minimum Required Assets required to be held increases as the number of payments missed on a delinquent loan increases.
Summary of consolidated cash flows Years ended December 31, (In thousands) 2024 2023 Total cash provided by (used in): Operating activities $ 725,032 $ 712,962 Investing activities (142,005) (179,190) Financing activities (719,044) (496,041) Increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents $ (136,017) $ 37,731 Operating activities The following list highlights the major sources and uses of cash flow from operating activities: Sources + Premiums received + Loss payments from reinsurers + Investment income Uses - Claim payments - Premium ceded to reinsurers - Interest expense - Operating expenses - Tax payments Our largest source of cash is from premiums received from our insurance policies, which we receive on a monthly installment basis for most policies.
Summary of Consolidated Cash Flows Years ended December 31, (In thousands) 2025 2024 Total cash provided by (used in): Operating activities $ 852,798 $ 725,032 Investing activities 228,374 (142,005) Financing activities (940,285) (719,044) Increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents $ 140,887 $ (136,017) Operating Activities The following list highlights the major sources and uses of cash flow from operating activities: Sources + Premiums received + Loss payments from reinsurers + Investment income Uses - Claim payments - Premium ceded to reinsurers - Interest expense - Operating expenses - Tax payments Our largest source of cash is from premiums received from our insurance policies, which we receive on a monthly installment basis for most policies.
MGIC Investment Corporation 2024 Form 10-K | 71 MGIC Investment Corporation and Subsidiaries Fixed income security ratings Security Ratings (1) Period AAA AA A BBB December 31, 2024 10% 34% 36% 20% December 31, 2023 12% 34% 35% 19% (1) Ratings are provided by one or more of: Moody's, Standard & Poor's and Fitch Ratings.
MGIC Investment Corporation 2025 Form 10-K | 67 Fixed income security ratings Security Ratings (1) December 31, 2025 December 31, 2024 AAA 12% 10% AA 36% 34% A 34% 36% BBB 18% 20% (1) Ratings are provided by one or more of: Moody's, Standard & Poor's and Fitch Ratings.
See Note 7 - "Debt" for further information on our outstanding debt obligations and transactions impacting our consolidated financial statements in 2024 and 2023. Liquidity analysis - holding company As of December 31, 2024, and December 31, 2023, we had approximately $1.1 billion and $0.9 billion, respectively, in cash and investments at our holding company.
See Note 3 - "Debt" for further information on our outstanding debt obligations impacting our consolidated financial statements in 2025 and 2024. Liquidity Analysis - Holding Company Our holding company had approximately $1.1 billion in cash and investments as of December 31, 2025 and December 31, 2024, respectively.
The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers.
The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers.
We expect average claims paid as a percentage of exposure to increase as we receive delinquencies that have not experienced the same level of home price appreciation as in recent years. The extent and timing of these increases are uncertain.
We expect average claims paid as a percentage of exposure to increase as we receive delinquencies that have not experienced the same level of home price appreciation. The extent and timing of their increase is uncertain.
Bank National Association, as trustee, which is included as an exhibit to our 8-K filed with the SEC on August 12, 2020, and in the Indenture dated as of October 15, 2000 between us and the trustee.
The terms of our 5.25% Notes are contained in a Supplemental Indenture, dated as of August 12, 2020, between us and U.S. Bank National Association, as trustee, which is included as an exhibit to our 8-K filed with the SEC on August 12, 2020, and in the Indenture dated as of October 15, 2000 between us and the trustee.
An increase in third party property sales, prior to claim settlement has resulted in a decrease in the average claim paid and the average claim paid as a percentage of exposure in recent years.
In recent years, an increase in third party property sales, prior to claim settlement has resulted in a decrease in the average claim paid and the average claim paid as MGIC Investment Corporation 2025 Form 10-K | 62 a percentage of exposure.
MGIC Investment Corporation 2024 Form 10-K | 66 MGIC Investment Corporation and Subsidiaries The majority of loans insured prior to 2014 (which represent 29% of the loans in the delinquency inventory) are covered by master policy terms that, except under certain circumstances, do not limit the number of years that an insured can include interest when filing a claim.
The majority of loans insured prior to 2014 (which represent 24% of the loans in the delinquency inventory) are covered by master policy terms that, except under certain circumstances, do not limit the number of years that an insured can include interest when filing a claim.
Primary delinquency inventory roll-forward 2024 2023 Beginning delinquent inventory 25,650 26,387 New Notices 51,427 46,825 Cures (48,731) (46,108) Paid claims (1,318) (1,328) Rescissions and denials (84) (45) Other items removed from inventory (153) (81) Ending delinquent inventory 26,791 25,650 MGIC Investment Corporation 2024 Form 10-K | 65 MGIC Investment Corporation and Subsidiaries New notice activity The table below presents our new delinquency notices received, delinquency inventory, and the average number of missed payments for the loans in our delinquency inventory by policy year: New notices and delinquency inventory during the period December 31, 2024 Policy Year New Delinquency Notices Received in the Year Ended Delinquency Inventory Avg.
Delinquency Inventory Roll-Forward 2025 2024 Beginning delinquent inventory 26,791 25,650 New notices 53,006 51,427 Cures (51,015) (48,731) Paid claims (1,371) (1,318) Rescissions and denials (91) (84) Other items removed from inventory (248) (153) Ending delinquent inventory 27,072 26,791 MGIC Investment Corporation 2025 Form 10-K | 61 New Notice Activity The table below presents our new notices received, delinquency inventory, and the average number of missed payments for the loans in our delinquency inventory by policy year: New Notices and Delinquency Inventory during the Period December 31, 2025 Policy Year New Notices Received in the Year Ended Delinquency Inventory Avg.
Risk-to-capital - MGIC December 31, (In millions, except ratio) 2024 2023 RIF - net (1) $ 58,213 $ 58,832 Statutory policyholders' surplus $ 973 $ 636 Statutory contingency reserve 4,833 5,131 Statutory policyholders' position $ 5,806 $ 5,767 Risk-to-capital 10.0:1 10.2:1 (1) RIF – net, as shown in the table above, is net of reinsurance and exposure on policies currently delinquent ($1.8 billion at December 31, 2024 and $1.6 billion at December 31, 2023) and for which case loss reserves have been established.
Risk-to-Capital - MGIC December 31, (In millions) 2025 2024 RIF - net (1) $ 57,598 $ 58,213 Statutory policyholders' surplus $ 887 $ 973 Statutory contingency reserve 4,853 4,833 Statutory policyholders' position $ 5,740 $ 5,806 Risk-to-capital 10.0:1 10.0:1 (1) RIF – net, as shown in the table above, is net of reinsurance and exposure on policies for which case loss reserves have been established ($1.8 billion at December 31, 2025 and $1.8 billion at December 31, 2024).
Our gross reserves are reduced by reinsurance recoverable on loss reserves to calculate a net reserve balance. Loss reserves decreased to $462.7 million as of December 31, 2024, from $505.4 million of December 31, 2023. Reinsurance recoverables on loss reserves were $47.3 million and $33.3 million as of December 31, 2024 and December 31, 2023, respectively.
Our gross loss reserves are reduced by reinsurance recoverable on loss reserves to calculate a net reserve balance. Loss reserves increased to $474.9 million as of December 31, 2025, from $462.7 million of December 31, 2024. Reinsurance recoverables on loss reserves were $65.1 million and $47.3 million as of December 31, 2025 and December 31, 2024, respectively.
The profit commission varies inversely with the level of losses incurred on a "dollar for dollar" basis and can be eliminated at loss levels higher than what we have experienced.
The profit commission varies inversely with the level of losses incurred on a "dollar for dollar" basis and can be eliminated at loss levels higher than what we MGIC Investment Corporation 2025 Form 10-K | 58 have experienced on the QSR Transactions.
MGIC's policyholders’ position consists primarily of statutory policyholders’ surplus (which increases as a result of statutory net income and decreases as a result of statutory net loss and dividends paid), plus the statutory contingency reserve. The statutory contingency reserve is reported as a liability on the statutory balance sheet.
MGIC's policyholders’ position consists primarily of statutory policyholders’ surplus (which generally changes due to statutory net income/loss and dividends paid, among other things), plus the statutory contingency loss reserve. The statutory contingency loss reserve is reported as a liability on the statutory balance sheet.
(2) Ceded premiums for reinsurance cancellation activities resulted in a decrease of 0.5 bps in 2023. Assumed premiums include those from our participation in GSE CRT programs, of which the impact on the net premium yield was 0.5 bps in 2024 and 0.4 bps in 2023.
(2) Assumed premiums include those from our participation in GSE CRT programs, of which the impact on the net premium yield was 0.5 bps in 2025 and 0.5 bps in 2024.
MGIC Investment Corporation 2024 Form 10-K | 67 MGIC Investment Corporation and Subsidiaries Primary delinquent inventory - number of payments delinquent 2024 2023 3 payments or less 14,135 12,665 4 - 11 payments 8,392 8,064 12 payments or more (1) 4,264 4,921 Total 26,791 25,650 3 payments or less 53 % 50 % 4 - 11 payments 31 % 31 % 12 payments or more 16 % 19 % Total 100 % 100 % (1) Approximately 25% and 34% of the loans in the primary delinquency inventory with 12 payments or more delinquent have at least 36 payments delinquent as of December 31, 2024, and 2023, respectively.
MGIC Investment Corporation 2025 Form 10-K | 63 Delinquent Inventory - Number of Payments Delinquent 2025 2024 3 payments or less 14,121 14,135 4 - 11 payments 8,747 8,392 12 payments or more (1) 4,204 4,264 Total 27,072 26,791 3 payments or less 52 % 53 % 4 - 11 payments 32 % 31 % 12 payments or more 16 % 16 % Total 100 % 100 % (1) Approximately 16% and 25% of the loans in the delinquency inventory with 12 payments or more delinquent have at least 36 payments delinquent as of December 31, 2025, and 2024, respectively.
In the next twelve months we anticipate we will pay approximately $8.7 million for our purchase obligations. MGIC Investment Corporation 2024 Form 10-K | 74 MGIC Investment Corporation and Subsidiaries We do not expect to make a contribution to the pension plan in 2025 and distributions from the supplemental executive retirement plan will be funded as incurred.
In the next twelve months we anticipate we will pay approximately $12.3 million for our purchase obligations. We do not expect to make a contribution to the pension plan in 2026 and distributions from the supplemental executive retirement plan will be funded as incurred.
As discussed in our risk factor titled “Because we establish loss reserves only upon a loan delinquency rather than based on estimates of our ultimate losses on risk in force, losses may have a disproportionate adverse effect on our earnings in certain periods” if we have not received a notice of delinquency with respect to a loan and if we have not estimated the loan to be delinquent as of December 31, 2024, through our IBNR reserve, then we have not yet recorded an incurred loss with respect to that loan.
For information on how pandemics and natural disasters could affect losses incurred, net see our risk factors titled “ The effects of pandemics, severe weather events, or other disasters may adversely impact our results of operations and financial condition." As discussed in our risk factor titled “Because we establish loss reserves only upon a loan delinquency rather than based on estimates of our ultimate losses on risk in force, losses may have a disproportionate adverse effect on our earnings in certain periods” if we have not received a notice of delinquency with respect to a loan and if we have not estimated the loan to be delinquent as of December 31, 2025, through our IBNR reserve, then we have not yet recorded an incurred loss with respect to that loan.
Adjusted net operating income (loss) per diluted share is calculated in a manner consistent with the accounting standard regarding earnings per share by dividing (i) adjusted net operating income (loss) after making adjustments for interest expense on convertible debt, whenever the impact is dilutive by (ii) diluted weighted average common shares outstanding, which reflects share dilution from unvested restricted stock units and from convertible debt when dilutive under the “if-converted” method.
Adjusted net operating income (loss) per diluted share is calculated in a manner consistent with the accounting standard regarding earnings per share by dividing (i) adjusted net operating income (loss) by (ii) diluted weighted average common shares outstanding, which reflects share dilution from unvested restricted stock units.
MGIC Investment Corporation 2024 Form 10-K | 79 MGIC Investment Corporation and Subsidiaries Historically, it has not been uncommon for us to experience variability in the development of the loss reserves through the end of the following year at this level or higher, as shown by the historical development of our loss reserves in the table below: Historical development of loss reserves (In thousands) Losses incurred related to prior years (1) Reserve at end of prior year 2024 (212,476) 505,379 2023 (208,514) 557,988 2022 (404,130) 883,522 2021 (60,015) 880,537 2020 19,604 555,334 (1) A negative number for a prior year indicates a redundancy of loss reserves.
Historically, it has not been uncommon for us to experience variability in the development of loss reserves from period to period, as shown in the table below: Historical Development of Loss Reserves (In thousands) Losses incurred related to prior years (1) Reserve at end of prior year 2025 (155,179) 462,662 2024 (212,476) 505,379 2023 (208,514) 557,988 2022 (404,130) 883,522 2021 (60,015) 880,537 (1) A negative number for a prior year indicates a redundancy of loss reserves.
Our estimate of refundable premium on our delinquency inventory fluctuates with changes in our delinquency inventory and our estimate of the number of loans in our delinquency inventory that will result in a claim. Lower levels of claims received results in a lower level of premium refunds.
Premium Refunds è Premium refunds are primarily driven by our estimate of refundable premiums on our delinquency inventory and claim activity. Our estimate of refundable premium on our delinquency inventory fluctuates with changes in our delinquency inventory and our estimate of the number of loans in our delinquency inventory that will result in a claim.
Primary delinquency inventory - consecutive months delinquent December 31, 2024 2023 3 months or less 10,352 9,175 4 - 11 months 9,281 8,900 12 months or more (1) 7,158 7,575 Total 26,791 25,650 3 months or less 38 % 36 % 4 - 11 months 35 % 35 % 12 months or more 27 % 29 % Total 100 % 100 % Primary claims received inventory included in ending delinquent inventory 319 302 (1) Approximately 27% and 37% of the delinquent inventory that has been delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of December 31, 2024 and 2023, respectively.
Delinquency Inventory - Consecutive Months Delinquent December 31, 2025 2024 3 months or less 10,389 10,352 4 - 11 months 9,559 9,281 12 months or more (1) 7,124 7,158 Total 27,072 26,791 3 months or less 38 % 38 % 4 - 11 months 35 % 35 % 12 months or more 27 % 27 % Total 100 % 100 % (1) Approximately 22% and 27% of the delinquency inventory that has been delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of December 31, 2025 and 2024, respectively.
Such repurchases may be material, may be made for cash (funded by debt) and/or exchanges for other securities, and may be made in open market purchases (including through 10b5-1 plans), privately negotiated acquisitions or other transactions. In 2025, we expect share repurchase programs will remain our primary means of returning capital to shareholders.
Such repurchases may be material, may be made for cash (funded by debt) and/or exchanges for other securities, and may be made in open market purchases (including through 10b5-1 plans), privately negotiated acquisitions or other transactions.
MGIC paid $750 million in dividends to our holding company in the year ended December 31, 2024. Future dividend payments from MGIC to the holding company will be determined in consultation with the Board of Directors, and after considering any updated estimates about our business.
Future dividend payments from MGIC to the holding company will be determined in consultation with the Board of Directors, and after considering any updated estimates about our business. We ask the Wisconsin OCI not to object before MGIC pays dividends to the holding company.
The focus we place on any individual objective may change over time due to factors that include, but are not limited to, economic conditions, changes at the GSEs, competition, and alternative transactions to transfer mortgage risk.
The focus we place on any individual objective may change over time due to factors that include, but are not limited to, economic conditions, changes at the GSEs, competition, and alternative transactions to transfer mortgage risk. MGIC Investment Corporation 2025 Form 10-K | 71 Capital Structure The following table summarizes our capital structure as of December 31, 2025, and 2024.
CASH AND CASH EQUIVALENTS Cash and cash equivalents decreased to $229.5 million, as of December 31, 2024 (2023: $363.7 million), as net cash generated from operating activities was substantially used in financing activities. DEFERRED INCOME TAXES Our net deferred tax asset was $69.9 million as of December 31, 2024 (2023: $79.8 million).
Cash and Cash Equivalents - Cash and cash equivalents increased to $369.0 million as of December 31, 2025 (2024: $229.5 million), as net cash generated from operating and investing activities was only partially offset by cash used in financing activities. Deferred Income Taxes - Our net deferred tax asset was $18.5 million as of December 31, 2025 (2024: $69.9 million).
Assumed premiums consists primarily of premiums from GSE CRT programs. See “Reinsurance Transactions“ below for further discussion on our reinsurance transactions.
Ceded premiums earned, net of profit commission, are associated with the QSR Transactions and the XOL Transactions. Assumed premiums consists primarily of premiums from GSE CRT programs. See “Reinsurance Transactions“ below for further discussion on our reinsurance transactions.
These changes were partially offset by repurchases of our common stock and dividends paid to shareholders in 2024. See Note 13 - "Shareholders' Equity" for further information. Debt obligations - holding company As of December 31, 2024, our holding company's debt obligations was $650 million in aggregate principal amount consisting of our 5.25% Notes due in 2028.
See Note 11 - "Shareholders' Equity" for further information. Debt Obligations - Holding Company As of December 31, 2025, our holding company's debt obligations was $650 million in aggregate principal amount consisting of our 5.25% Notes due in 2028.
FINANCIAL STRENGTH RATINGS MGIC financial strength ratings MAC financial strength ratings Rating Agency Rating Outlook Rating Agency Rating Outlook Moody's Investors Service A3 Positive Standard and Poor's Rating Services A- Stable Standard and Poor's Rating Services A- Stable A.M. Best A Stable A.M.
The financial strength ratings for MGIC and MAC through the date of this filing are listed below: MGIC Financial Strength Ratings MAC Financial Strength Ratings Rating Agency Rating Outlook Rating Agency Rating Outlook Moody's Investors Service A2 Stable Standard and Poor's Rating Services A- Positive Standard and Poor's Rating Services A- Positive A.M. Best A Stable A.M.
MGIC Investment Corporation 2024 Form 10-K | 60 MGIC Investment Corporation and Subsidiaries CONSOLIDATED RESULTS OF OPERATIONS The following section of the MD&A provides a comparative discussion of our Consolidated Results of Operations for the two-year period ended December 31, 2024.
MGIC Investment Corporation 2025 Form 10-K | 56 Consolidated Results of Operations The following section of the MD&A provides a comparative discussion of our Consolidated Results of Operations for the two-year period ended December 31, 2025. For a discussion of the Critical Accounting Estimates used by us that affect the Consolidated Results of Operations, see "Critical Accounting Estimates" below.
Primary delinquency inventory by jurisdiction 2024 2023 Florida * 2,648 2,100 Texas 2,207 2,094 Illinois * 1,762 1,684 Pennsylvania * 1,504 1,433 California 1,499 1,354 Ohio * 1,268 1,246 Michigan 1,231 1,115 New York * 1,229 1,342 Georgia 1,025 955 North Carolina 880 705 New Jersey * 753 774 Indiana * 690 645 Maryland 655 680 Minnesota 616 566 South Carolina * 597 517 All other jurisdictions 8,227 8,440 Total 26,791 25,650 Note: Asterisk denotes jurisdictions in the table above that predominately use a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.
Primary Delinquency Inventory by Jurisdiction 2025 2024 Florida * 2,291 2,648 Texas 2,245 2,207 Illinois * 1,769 1,762 California 1,623 1,499 Pennsylvania * 1,522 1,504 Michigan 1,301 1,231 Ohio * 1,276 1,268 New York * 1,204 1,229 Georgia 1,040 1,025 Maryland 807 655 New Jersey * 783 753 North Carolina 766 880 Indiana * 693 690 Minnesota 651 616 Virginia 581 526 All other jurisdictions 8,520 8,298 Total 27,072 26,791 Note: Asterisk denotes jurisdictions in the table above that predominately use a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.
In connection with our reinsurance transactions, we cede, or pay out, part of the premiums we receive to our reinsurers and collect cash when claims subject to our reinsurance coverage are paid.
In connection with our reinsurance transactions, we cede, or pay out, part of the premiums we receive to our reinsurers and collect cash when claims subject to our reinsurance coverage are paid. In the next twelve months we will pay approximately $134.6 million for amounts owed to third parties for our purchase of transferable federal tax credits.
A mortgage insurance company is required to make annual additions to a contingency reserve of approximately 50% of earned premiums. These contributions must generally be maintained for a period of ten years. However, with regulatory approval a mortgage insurance company may make early withdrawals from the contingency reserve when incurred losses exceed 35% of earned premiums in a calendar year.
A mortgage insurance company is required to make annual additions to a contingency loss reserve of approximately 50% of earned premiums. These contributions must generally be maintained for a period of ten years.
INVESTMENT PORTFOLIO The investment portfolio increased to $5.9 billion as of December 31, 2024 (2023: $5.7 billion), primarily due to a decrease in the prevailing market interest rates. The return we generate on our investment portfolio is an important component of our consolidated financial results. Our investment portfolio primarily consists of a diverse mix of highly rated fixed income securities.
Investment Portfolio - Our investment portfolio primarily consists of a diverse mix of highly rated fixed income securities. The return we generate on our investment portfolio is an important component of our consolidated financial results.
We ask the Wisconsin OCI not to object before MGIC pays dividends to the holding company. Scheduled debt maturities beyond the next twelve months include $650 million of our 5.25% Notes in 2028. See Note 7 – “Debt” to our consolidated financial statements for additional information about our long term debt.
Scheduled debt maturities beyond the next twelve months include $650 million of our 5.25% Notes in 2028. See Note 3 – “Debt” to our consolidated financial statements for additional information about our long term debt. The description in Note 3 - “Debt" to our consolidated financial statements is qualified in its entirety by the terms of the notes.
As of December 31, 2024, 50% of our primary RIF was written subsequent to December 31, 2021, 74% of our primary RIF was written subsequent to December 31, 2020, and 87% of our primary RIF was written subsequent to December 31, 2019.
As of December 31, 2025, 44% of our primary RIF was written subsequent to December 31, 2022, 61% of our primary RIF was written subsequent to December 31, 2021, and 80% of our primary RIF was written subsequent to December 31, 2020.
Primary average RIF - delinquent loans 2024 2023 Florida $ 70,377 $ 63,885 Texas 63,943 59,841 Illinois 46,311 44,562 Pennsylvania 45,227 44,263 California 109,226 102,145 All other jurisdictions 56,525 54,723 Total all jurisdictions $ 60,148 $ 57,143 The primary average RIF on all loans was $70,475 and $67,705 at December 31, 2024 and December 31, 2023, respectively.
Primary Average RIF - Delinquent Loans 2025 2024 Florida $ 73,620 $ 70,377 Texas 68,787 63,943 Illinois 48,443 46,311 California 114,904 109,226 Pennsylvania 48,413 45,227 All other jurisdictions 59,991 56,525 Total all jurisdictions $ 63,760 $ 60,148 The primary average RIF on all loans was $72,995 and $70,475 at December 31, 2025 and December 31, 2024, respectively.
Consolidated balance sheets - Assets As of December 31, (in thousands) 2024 2023 % Change Investments $ 5,867,560 $ 5,738,734 2 Cash and cash equivalents 229,485 363,666 (37) Reinsurance recoverable on loss reserves (1) 47,281 33,302 42 Deferred incomes taxes, net 69,875 79,782 (12) Other assets 333,034 322,896 3 Total Assets $ 6,547,235 $ 6,538,380 0 (1) See "Liabilities and Equity" section below for further discussion.
Consolidated Balance Sheets - Assets As of December 31, (in thousands) 2025 2024 % Change Investments $ 5,807,662 $ 5,867,560 (1) Cash and cash equivalents 368,989 229,485 61 Reinsurance recoverable on loss reserves (1) 65,055 47,281 38 Deferred incomes taxes, net 18,512 69,875 (74) Other assets 379,268 333,034 14 Total Assets $ 6,639,486 $ 6,547,235 1 (1) See "Liabilities and Equity" section below for further discussion.
The current attachment, current detachment, and PMIERs required asset credit for each of our XOL Transactions as of December 31, 2024, are as follows: ($ In thousands) Initial Attachment % (1) Initial Detachment % (2) Current Attachment % (1) Current Detachment % (2) PMIERs Required Asset Credit 2024 Traditional XOL 2.67% 6.67% 2.67% 6.67% $ 180,284 2023 Traditional XOL 2.91% 6.91% 3.28% 7.53% 88,093 2022 Traditional XOL 2.60% 7.10% 3.03% 7.67% 119,861 Home Re 2023-1 3.00% 6.75% 3.39% 7.25% 280,820 Home Re 2022-1 2.75% 6.75% 3.87% 7.53% 241,338 Home Re 2021-2 2.10% 6.50% 3.97% 7.28% 110,664 Home Re 2021-1 2.25% 6.50% 5.26% 7.56% 33,155 (1) The percentage represents the cumulative losses as a percentage of adjusted risk in force that MGIC retains prior to the XOL taking losses.
The current attachment, current detachment, and PMIERs required asset credit for each of our XOL Transactions as of December 31, 2025, are as follows: ($ In thousands) Initial Attachment % (1) Initial Detachment % (2) Current Attachment % (1) Current Detachment % (2) PMIERs Required Asset Credit 2025 Traditional XOL 2.53% 6.53% 2.53% 6.53% $ 146,038 2024 Traditional XOL 2.67% 6.67% 3.03% 7.58% 180,004 2023 Traditional XOL 2.91% 6.91% 3.76% 7.27% 61,723 2022 Traditional XOL 2.60% 7.10% 3.27% 7.47% 96,471 2021 Traditional XOL 1.25% 3.48% 1.32% 3.67% 240,346 2020 Traditional XOL 0.75% 3.50% 0.93% 4.33% 240,883 Home Re 2023-1 3.00% 6.75% 3.79% 7.25% 205,355 Home Re 2022-1 2.75% 6.75% 4.54% 7.50% 164,661 Home Re 2021-2 2.10% 6.50% 5.00% 7.26% 64,312 (1) The percentage represents the cumulative losses as a percentage of adjusted risk in force that MGIC retains prior to the XOL taking losses.
Primary NIW by number of attributes discussed above Years Ended December 31, (% of primary NIW) 2024 2023 One 36.3 % 34.3 % Two or More 5.0 % 4.2 % IIF AND RIF Our IIF increased in 2024 compared to 2023.
Primary NIW by Number of Attributes Discussed Above Years Ended December 31, (% of primary NIW) 2025 2024 One 36.2 % 36.3 % Two or More 4.7 % 5.0 % Insurance in Force and Risk in Force The amount of our IIF and RIF is impacted by the amount of NIW, cancellations, and principal payments received on our primary IIF during the period.
Net losses and LAE paid (in millions) 2024 2023 Direct primary (excluding settlements) $ 39 $ 39 NPL settlements 2 1 Reinsurance (3) (1) LAE and other 7 7 Reinsurance terminations (1) (3) (9) Net losses and LAE paid $ 42 $ 37 Average claim paid (2) $ 29,889 $ 29,405 (1) See Note 9 - "Reinsurance" for additional information on our reinsurance terminations (2) Excludes amounts paid in NPL settlements The primary average RIF on delinquent loans as of December 31, 2024 and 2023 and for the top 5 jurisdictions (based on December 31, 2024 delinquency inventory) appears in the following table.
Net Losses and LAE Paid (in millions) 2025 2024 Direct primary (excluding settlements) $ 55 $ 39 NPL settlements 4 2 Reinsurance (9) (3) LAE and other 5 7 Reinsurance terminations (1) (1) (3) Net losses and LAE paid $ 54 $ 42 (1) See Note 7 - "Reinsurance" for additional information on our reinsurance terminations Loss Reserves The gross loss reserves as of December 31, 2025, and 2024 appear in the table below.
Historically as a delinquency ages it is more likely to result in a claim.
The table below shows the number of consecutive months a borrower is delinquent. Historically as a delinquency ages it is more likely to result in a claim.
Quota share reinsurance As of and For the Years Ended December 31, ($ in thousands) 2024 2023 Statements of operations: Ceded premiums written and earned, net of profit commission $ 115,306 $ 123,955 % of direct premiums written 10 % 11 % % of direct premiums earned 10 % 11 % Profit commission 108,368 133,145 Ceding commissions 44,532 50,397 Ceded losses incurred 20,607 15,623 Mortgage insurance portfolio: Ceded RIF (in millions) 2021 QSR 5,180 6,060 2022 QSR 4,252 4,693 2023 QSR 2,116 2,391 2024 QSR 3,575 — Credit Union QSR 2,855 2,608 Total ceded RIF $ 17,978 $ 15,752 Ceded premiums written and earned, net of profit commission decreased in 2024 when compared with the prior year primarily due to a decrease in the average amount of our IIF subject to our QSR Transactions throughout the year in comparison to the prior year.
Quota Share Reinsurance As of and For the Years Ended December 31, ($ in thousands) 2025 2024 Ceded premiums written and earned, net of profit commission $ 128,853 $ 115,306 % of direct premiums written 12 % 10 % % of direct premiums earned 11 % 10 % Profit commission 121,942 108,368 Ceding commissions 50,105 44,532 Ceded losses incurred 28,402 20,607 Mortgage insurance portfolio: Ceded RIF (in millions) 2021 QSR 3,781 5,180 2022 QSR 3,578 4,252 2023 QSR 1,812 2,116 2024 QSR 3,139 3,575 2025 QSR 5,062 N/A Credit Union QSR 3,218 2,855 Total ceded RIF $ 20,590 $ 17,978 The increase in profit commission in 2025 was primarily due to an increase in premiums ceded under our QSR Transactions, offset by an increase in losses incurred.
We expect net losses and LAE paid to increase, however, the magnitude and timing of the increases are uncertain. We invest our net cash flow in various investment securities that earn interest. We also use cash to pay for our ongoing expenses such as salaries, debt interest, professional services and occupancy costs.
We invest our net cash flow in various investment securities that earn interest. We also use cash to pay for our ongoing expenses such as employee costs, outside service expenses and debt interest.
MGIC Investment Corporation 2024 Form 10-K | 69 MGIC Investment Corporation and Subsidiaries Primary delinquency inventory by policy year 2024 2023 2004 and prior 1,793 2,072 2004 and prior %: 7 % 8 % 2005 - 2008 5,857 7,008 2005 - 2008 % 22 % 27 % 2009 - 2015 976 1,414 2009 - 2015 % 3 % 6 % 2016 772 954 2017 1,205 1,365 2018 1,628 1,750 2019 1,505 1,550 2020 2,421 2,383 2021 4,796 4,237 2022 3,803 2,605 2023 1,464 312 2024 571 — 2016 and later %: 68 % 59 % Total 26,791 25,650 On our primary business, the highest claim frequency years have typically been the third and fourth year after loan origination.
Primary Delinquency Inventory by Policy Year 2025 2024 2004 and prior 1,557 1,793 2004 and prior %: 6 % 7 % 2005 - 2008 4,871 5,857 2005 - 2008 % 18 % 22 % 2009 - 2015 741 976 2009 - 2015 % 3 % 3 % 2016 518 772 2017 1,005 1,205 2018 1,424 1,628 2019 1,369 1,505 2020 2,268 2,421 2021 4,739 4,796 2022 4,227 3,803 2023 2,044 1,464 2024 1,844 571 2025 465 — 2016 and later %: 73 % 68 % Total 27,072 26,791 Generally, on our primary business, the third and fourth year after loan origination have been periods with the highest level of new delinquency notices.
Accelerated earnings on single premium policies è A low level of refinance transactions reduces the benefit from accelerated earned premium from cancellation of single premium policies prior to their estimated policy life.
Lower levels of claims received results in a lower level of premium refunds. Accelerated earnings on single premium policies è The benefit from accelerated earned premium from cancellation of single premium policies prior to their estimated policy life is influenced by the level of refinance activity during a given period.
The primary delinquency inventory for the top 15 jurisdictions (based on December 31, 2024 delinquency inventory) at December 31, 2024, and 2023 appears in table the below.
The primary average RIF on delinquent loans as of December 31, 2025 and 2024 for the top 5 jurisdictions (based on December 31, 2025 delinquency inventory) appears in the following table.
The ability to raise capital in the public markets is subject to prevailing market conditions, investor demand for the securities to be issued, and our deemed creditworthiness. Over the next twelve months the principal demand on holding company resources will be interest payments on our 5.25% Notes approximating $34.0 million, based on the debt outstanding at December 31, 2024.
We expect to continue to make dividend payments to shareholders in 2026. Over the next twelve months the principal demand on our holding company resources will be interest payments on our 5.25% Notes approximating $34.0 million, based on the debt outstanding at December 31, 2025, and dividends to our shareholders.
Since 2018, our annual persistency ranged from a high of 86.3% at September 30, 2023 to a low of 60.7% at March 31, 2021.
For additional information on the composition of our primary RIF see " Our Products and Services - Business " Annual Persistency Our Annual Persistency was 84.8% at December 31, 2025 and December 31, 2024. Since 2018, our Annual Persistency ranged from a high of 86.3% at September 30, 2023 to a low of 60.7% at March 31, 2021.
Net cash flows used in investing activities in 2024 and 2023, primarily reflects purchases of fixed income securities during the period that exceeded sales and maturities of fixed income securities during the period as cash from operations was available for additional investment.
Net cash flows provided from investing activities in 2025 primarily reflects sales of fixed income securities that exceeded purchases of fixed income securities. Net cash flows used in investing activities in 2024 primarily reflected purchases of fixed income securities that exceeded sales of fixed income securities.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Certain legal proceedings arising in the ordinary course of business may be filed or pending against us from time to time. For information about such legal proceedings, see Note 17 – "Litigation and Contingencies" to our consolidated financial statements in Item 8 .
Biggest changeItem 3. Legal Proceedings Certain legal proceedings arising in the ordinary course of business may be filed or pending against us from time to time. For information about such legal proceedings, see Note 15 – "Litigation and Contingencies" to our consolidated financial statements in Item 8 .

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeMattke, 49 Chief Executive Officer and Director of MGIC Investment Corporation and MGIC Salvatore A. Miosi, 58 President and Chief Operating Officer of MGIC Investment Corporation and MGIC Nathan H. Colson, 41 Executive Vice President and Chief Financial Officer and Chief Risk Officer of MGIC Investment Corporation and MGIC Paula C.
Biggest changeMiosi, 59 President and Chief Operating Officer of MGIC Investment Corporation and MGIC Nathan H. Colson, 42 Executive Vice President and Chief Financial Officer of MGIC Investment Corporation and Executive Vice President, Chief Financial Officer and Chief Risk Officer of MGIC Paula C. Maggio, 57 Executive Vice President, General Counsel and Secretary of MGIC Investment Corporation and MGIC Mr.
(SHR) from 2012 to 2015, and in various other leadership roles with SHR since joining that firm in 2000. Prior to joining SHR, Ms. Maggio had been in private legal practice from 1994-2000. MGIC Investment Corporation 2024 Form 10-K | 43 MGIC Investment Corporation and Subsidiaries PART II
(SHR) from 2012 to 2015, and in various other leadership roles with SHR since joining that firm in 2000. Prior to joining SHR, Ms. Maggio had been in private legal practice from 1994-2000. MGIC Investment Corporation 2025 Form 10-K | 41 Part II
Maggio, 56 Executive Vice President, General Counsel and Secretary of MGIC Investment Corporation and MGIC Mr. Mattke has served as our Chief Executive Officer since 2019. Before then, he had been the Company’s Chief Financial Officer from 2014 to 2019, and its Controller from 2009 to 2014. He joined the Company in 2006.
Mattke has served as our Chief Executive Officer since 2019. Before then, he had been the Company’s Chief Financial Officer from 2014 to 2019, and its Controller from 2009 to 2014. He joined the Company in 2006.
Item 4. Mine Safety Disclosures Not Applicable. MGIC Investment Corporation 2024 Form 10-K | 42 MGIC Investment Corporation and Subsidiaries Information About Our Executive Officers Certain information with respect to our executive officers as of February 26, 2025 is set forth below: Executive officers of the registrant Name and Age Title Timothy J.
Item 4. Mine Safety Disclosures Not Applicable. Information About Our Executive Officers Certain information with respect to our executive officers as of February 25, 2026 is set forth below: Executive Officers of the Registrant Name and Age Title Timothy J. Mattke, 50 Chief Executive Officer and Director of MGIC Investment Corporation and MGIC Salvatore A.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShare repurchases Period Beginning Period Ending 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 the program (1) 10/1/2024 10/31/2024 2,850,785 $ 25.39 2,850,785 $ 578,140,811 11/1/2024 11/30/2024 2,074,259 $ 24.85 2,074,259 $ 526,603,758 12/1/2024 12/31/2024 2,843,639 $ 24.41 2,843,639 $ 457,182,054 7,768,683 $ 24.89 7,768,683 (1) In April 2024, our Board of Directors authorized a share repurchase program under which as of December 31, 2024 we may repurchase up to an additional $457 million of our common stock through December 31, 2026.
Biggest changeShare Repurchases Period Beginning Period Ending 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 the program (1) 10/1/2025 10/31/2025 3,495,115 $ 27.17 3,495,115 $ 519,326,713 11/1/2025 11/30/2025 1,503,218 $ 28.13 1,503,218 $ 477,045,469 12/1/2025 12/31/2025 1,789,778 $ 28.98 1,789,778 $ 425,177,316 6,788,111 $ 27.86 6,788,111 (1) In April 2025, our Board of Directors authorized a share repurchase program, authorizing us to purchase up to $750 million of common stock prior to December 31, 2027.
In addition, we estimate there are approximately 147,400 beneficial owners of shares held by brokers and fiduciaries. Information regarding equity compensation plans is contained in Item 12 . (b) Not applicable. (c) Issuer Purchases of Equity Securities The following table provides information about purchases of MGIC Investment Corporation common stock by us during the three months ended December 31, 2024.
In addition, we estimate there are approximately 172,400 beneficial owners of shares held by brokers and fiduciaries. Information regarding equity compensation plans is contained in Item 12 . (b) Not applicable. (c) Issuer Purchases of Equity Securities The following table provides information about purchases of MGIC Investment Corporation common stock by us during the three months ended December 31, 2025.
Repurchases may be made from time to time on the open market (including through 10b5-1 plans) or through privately negotiated transactions. The repurchase program may be suspended for periods or discontinued at any time. MGIC Investment Corporation 2024 Form 10-K | 44 MGIC Investment Corporation and Subsidiaries
Repurchases may be made from time to time on the open market (including through 10b5-1 plans) or through privately negotiated transactions. The repurchase program may be suspended for periods or discontinued at any time. MGIC Investment Corporation 2025 Form 10-K | 42 MGIC Investment Corporation and Subsidiaries
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) Our Common Stock is listed on the New York Stock Exchange under the symbol “MTG.” As of February 21, 2025, the number of shareholders of record was 148.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) Our Common Stock is listed on the New York Stock Exchange under the symbol “MTG.” As of February 20, 2026, the number of shareholders of record was 137.

Item 7. Management's Discussion & Analysis

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

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Biggest changeInvestment gains and losses on the embedded derivative on our Home Re Transactions reflect the present value impact of the variation in investment income on assets on the insurance-linked notes held by the reinsurance trusts and the contractual reference rate used to calculate the reinsurance premiums we estimate we will pay over the estimated remaining life. • Gains and losses on debt extinguishment Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position and / or improve our debt profile.
Biggest changeThe amount received on the sale of fixed income securities is affected by the coupon rate of the security compared to the yield of comparable securities at the time of sale. • Equity securities: Investment gains and losses reflect the periodic change in fair value. • Financial instruments: Investment gains and losses on the embedded derivative on our Home Re Transactions reflect the present value impact of the variation in investment income on assets on the insurance-linked notes held by the reinsurance trusts and the contractual reference rate used to calculate the reinsurance premiums we estimate we will pay over the estimated remaining life.
Our book of IIF is an important driver of our future revenues, and its growth is driven by our ability to generate NIW and the retention of our IIF , as measured by our Annual persistency. Interest rates influence both our NIW and persistency.
Our book of IIF is an important driver of our future revenues, and its growth is driven by our ability to generate NIW and the retention of our IIF , as measured by our Annual Persistency. Interest rates influence both our NIW and Annual Persistency.
Cancellations of single premium policies, which are generally non-refundable, result in immediate recognition of any remaining unearned premium. • Premium rates, which vary by product type, the risk characteristics of the insured loans, competitive pressures, the percentage of coverage on the insured loans, and PMIERs capital requirements.
Cancellations of single premium policies, which are generally non-refundable, result in immediate recognition of any remaining unearned premium. • Premium rates: Vary by product type, the risk characteristics of the insured loans, competitive pressures, the percentage of coverage on the insured loans, and PMIERs capital requirements.
The remainder of our monthly and annual premiums are under premium plans for which premiums are determined by a fixed percentage of the loan’s amortizing balance over the life of the policy. • Premiums ceded, net of profit commission, under our QSR Transactions, and premiums ceded under our XOL Transactions, are primarily affected by the percentage of our IIF subject to our reinsurance transactions.
The remainder of our monthly and annual premiums are under premium plans for which premiums are determined by a fixed percentage of the loan’s amortizing balance over the life of the policy. • Premiums ceded, net of profit commission: Ceded premiums under our QSR and XOL Transactions, are primarily affected by the percentage of our IIF subject to our reinsurance transactions.
Losses incurred are generally affected by: • The state of the economy, including unemployment and housing values, each of which affects the likelihood that loans will become delinquent and whether loans that are delinquent cure their delinquency. • The product mix of the in force book, with loans having higher risk characteristics generally resulting in higher delinquencies and claims. • The size of loans insured, with higher average loan amounts on delinquent loans tending to increase incurred losses. • The percentage of coverage on insured loans, with deeper average coverage on delinquent loans tending to increase incurred losses. • The distribution of claims over the life of a book.
Losses incurred are generally affected by: • The state of the economy, including unemployment and housing values, each of which affects the likelihood that loans will become delinquent and whether loans that are delinquent cure their delinquency. • The product mix of the in force book, with loans having higher risk characteristics generally resulting in higher delinquencies and claims. • The size of loans insured, with higher average loan amounts on delinquent loans tending to increase losses incurred. • The percentage of coverage on insured loans, with deeper average coverage on delinquent loans tending to increase losses incurred. • The distribution of claims over the life of a book.
FACTORS AFFECTING OUR RESULTS Our current and future business, results of operations and financial condition are impacted by macroeconomic conditions, such as interest rates, home prices, housing demand, level of employment, inflation, pandemics, restrictions on and costs of mortgage credit, and other factors.
Key Factors Affecting Our Results Our current and future business, results of operations and financial condition are impacted by macroeconomic conditions, such as interest rates, home prices, housing demand, level of employment, inflation, pandemics, restrictions on and costs of mortgage credit, and other factors.
Comparisons between 2023 and 2022 have been omitted from this Form 10-K, but can be found in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC.
Comparisons between 2024 and 2023 have been omitted from this Form 10-K, but can be found in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC.
See Note 9 – “Reinsurance” to our consolidated financial statements for a discussion of our reinsurance transactions. • The rate at which we rescind policies or curtail claims. Our estimated loss reserves incorporate our estimates of future rescissions of policies and curtailments of claims, and reversals of rescissions and curtailments.
See Note 7 – “Reinsurance” to our consolidated financial statements for a discussion of our reinsurance transactions. • The rate at which we rescind policies or curtail claims. Our estimated loss reserves incorporate our estimates of future rescissions of policies and curtailments of claims, and reversals of rescissions and curtailments.
Pricing practices In recent years, pricing has become a key competitive factor in the private mortgage insurance market, with an increasing number of customers prioritizing the lowest premium rate available for any particular loan.
Pricing Practices Pricing has become a key competitive factor in the private mortgage insurance market, with an increasing number of customers prioritizing the lowest premium rate available for any particular loan.
As of January 2025, forecasts from Fannie Mae and the MBA indicate a modest decrease in interest rates in 2025 compared to 2024 and the slowdown in the rate of home price appreciation. Results of operations Premiums Our direct premiums written and earned are impacted by our IIF during the period and our in force premium yield.
As of January 2026, forecasts from Fannie Mae and the MBA indicate a decrease in interest rates in 2026 compared to 2025, and a slowdown in the rate of home price appreciation. Results of Operations Premiums Our direct premiums written and earned are impacted by our IIF during the period and our in force premium yield.
We expect our in force portfolio premium yield to remain relatively flat in 2025 and we expect our net premiums written and earned to decrease in 2025, driven by an increase in ceded premiums. Premiums earned are also impacted by the amount of accelerated premiums from single premium policy cancellations, which generally decrease as refinance activity decreases.
We expect our in force portfolio premium yield to remain relatively flat in 2026 and we expect our net premiums written and earned to decrease modestly in 2026, driven by an increase in ceded premiums. Premiums earned are also impacted by the amount of accelerated premiums from single premium policy cancellations, which generally decrease as refinance activity decreases.
The following is a discussion and analysis of the financial conditions and results of operations for the years ended December 31, 2024 and 2023, including comparisons between 2024 and 2023.
The following is a discussion and analysis of the financial conditions and results of operations for the years ended December 31, 2025 and 2024, including comparisons between 2025 and 2024.
In addition, business under customized rate plans is awarded by certain customers for only limited periods of time. As a result, our NIW may fluctuate more than it had in the past. IIF Our IIF increased 0.6% in 2024 and is expected to remain relatively flat in 2025.
In addition, business under customized rate plans is awarded by certain customers for only limited periods of time. As a result, our NIW may fluctuate more than it had in the past. IIF Our IIF increased 2.6% in 2025 and is expected to remain relatively flat in 2026.
NIW Our NIW is affected by total mortgage originations, the percentage of total mortgage originations using private mortgage insurance (the "PMI penetration rate"), and our market share within the PMI industry.
NIW Our NIW is affected by total mortgage originations, the percentage of total mortgage originations using PMI (the "PMI penetration rate"), and our market share within the PMI industry.
MGIC's "policyholder position" includes its net worth or surplus and its contingency reserve. At December 31, 2024, MGIC’s risk-to-capital ratio was 10.0 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $3.6 billion above the required MPP of $2.2 billion.
MGIC's "policyholder position" includes its net worth or surplus and its contingency reserve. As of December 31, 2025, MGIC’s risk-to-capital ratio was 10.0 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $3.6 billion above the required MPP of $2.2 billion.
Investment gains and losses reflect the difference between the amount received on the sale of a fixed income security and the fixed income security’s cost basis, as well as any credit allowances and any impairments on securities we intend to sell prior to recovery of its amortized cost basis.
Gains (losses) on investments and other financial instruments: • Fixed income securities: Investment gains and losses reflect the difference between the amount received on the sale of a fixed income security and the fixed income security’s cost basis, as well as any credit allowances and impairments on securities we intend to sell prior to recovery of its amortized cost basis.
The financial requirements of the PMIERs require a mortgage insurer’s "Available Assets" (generally only the most liquid assets of an insurer) to equal or exceed its "Minimum Required Assets" (which are based on an insurer's book of risk in force, calculated from tables of factors with several risk dimensions, reduced for credit given for risk ceded under reinsurance transactions, and subject to a floor amount).
The financial requirements of the PMIERs require a mortgage insurer’s “Available Assets” (generally only the most liquid assets of an insurer) to equal or exceed its “Minimum Required Assets” (which are generally based on an insurer’s book of risk in force and calculated from tables of factors with several risk dimensions, reduced for credit given for risk ceded under reinsurance agreements, and subject to a floor amount).
For additional information about our IT systems and cybersecurity, see our risk factor titled “ Information technology system failures or interruptions may materially impact our operations and adversely affect our financial results " and " We could be materially adversely affected by a cyber security breach or failure of information security controls. " in Item 1A and
For additional information about our IT systems and cybersecurity, see our risk factor titled “ Failed, disrupted, or inadequate information technology systems may materially impact our operations and/or adversely affect our financial results " and " We could be materially adversely affected by a cyber security breach or failure of information security controls. " in Item 1A and
This pattern of results typically occurs because relatively few of the incurred losses on delinquencies that a book will ultimately experience typically occur in the first few years of the book, when premium revenue is highest, while subsequent years are affected by declining premium revenues, as the number of insured loans decreases (primarily due to loan prepayments) and increasing losses.
This pattern of results typically occurs because relatively few of the incurred losses on MGIC Investment Corporation 2025 Form 10-K | 50 delinquencies that a book will ultimately experience typically occur in the first few years of the book, when premium revenue is highest, while subsequent years are affected by declining premium revenues, as the number of insured loans decreases (primarily due to loan prepayments) and increasing losses.
The updated Model Act includes requirements relating to, among other things: (i) capital and minimum capital requirements, and contingency reserves; (ii) restrictions on mortgage insurers’ investments in notes secured by mortgages; (iii) prudent underwriting standards and formal underwriting guidelines; (iv) the establishment of formal, internal “Mortgage Guaranty Quality Control Programs” with respect to in-force business; and (v) reinsurance MGIC Investment Corporation 2024 Form 10-K | 51 MGIC Investment Corporation and Subsidiaries and prohibitions on captive reinsurance arrangements.
The updated Model Act includes requirements relating to, among other things: (i) capital and minimum capital requirements, and contingency reserves; (ii) restrictions on mortgage insurers’ investments in notes secured by mortgages; (iii) prudent underwriting standards and formal underwriting guidelines; (iv) the establishment of formal, internal “Mortgage Guaranty Quality Control Programs” with respect to in-force business; and (v) reinsurance and prohibitions on captive reinsurance arrangements.
Forward Looking and Other Statements As discussed under “Forward Looking Statements and Risk Factors” in Item 1A of Part 1 of this Report, actual results may differ materially from the results contemplated by forward looking statements.
Forward Looking and Other Statements As discussed under “Forward Looking Statements and Risk Factors” in " Item 1 . Business - A. General " of this Report, actual results may differ materially from the results contemplated by forward looking statements.
Through MGIC, the principal subsidiary of MGIC Investment Corporation, we serve lenders throughout the United States helping families achieve homeownership sooner by making affordable low-down-payment mortgages a reality through the use of private mortgage insurance. At December 31, 2024 MGIC had $295.4 billion of primary IIF.
Through MGIC, the principal subsidiary of MGIC Investment Corporation, we serve lenders throughout the United States helping families achieve homeownership sooner by making affordable low-down-payment mortgages a reality through the use of private mortgage insurance. As of December 31, 2025 MGIC had $303.1 billion of primary IIF.
For example, a weak economy or housing value declines can lead to claims from older books increasing, continuing at stable levels or experiencing a lower rate of decline. See further information under “Mortgage insurance earnings and cash flow cycle” below. • Losses ceded under reinsurance transactions.
For example, a weak economy or housing value declines can lead to claims from older books increasing, continuing at stable levels or experiencing a lower rate of decline. See further information under “Mortgage insurance earnings and cash flow cycle” below. • Delinquencies covered by our reinsurance transactions would decrease losses incurred, net.
The widespread use of risk based pricing systems by the PMI industry makes it more difficult to compare our rates to those offered by our competitors. We may not be aware of industry rate changes until we observe that our volume of NIW has changed.
We are expecting NIW to remain relatively flat in 2026 compared to 2025. The widespread use of risk based pricing systems by the PMI industry makes it more difficult to compare our rates to those offered by our competitors. We may not be aware of industry rate changes until we observe that our volume of NIW has changed.
Extinguishing our outstanding debt obligations early through these discretionary MGIC Investment Corporation 2024 Form 10-K | 53 MGIC Investment Corporation and Subsidiaries activities may result in gains or losses primarily driven by differences in the payment of consideration from the carrying value, and the write off of unamortized debt issuance costs on the extinguished portion of the debt.
Extinguishing our outstanding debt obligations early through these discretionary activities may result in gains or losses primarily driven by differences in the payment of consideration from the carrying value, and the write off of unamortized debt issuance costs on the extinguished portion of the debt.
Employee compensation expenses are variable due to share-based compensation, changes in benefits, and changes in headcount (which can fluctuate due to volume of NIW). See Note 9 – “Reinsurance” and Note 18 – “Segment Reporting” to our consolidated financial statements for a discussion of ceding commission on our QSR Transactions and discussion on significant segment expenses.
Employee compensation expenses are variable due to share-based compensation, changes in benefits, and changes in headcount. See Note 7 – “Reinsurance” and Note 14 – “Segment Reporting” to our consolidated financial statements for a discussion of ceding commission on our QSR Transactions and discussion on significant segment expenses.
As of January 2025, the total average mortgage origination forecasts from Fannie Mae and the MBA indicate mortgage originations of $2.0 trillion in 2025, compared to an estimated $1.7 trillion in 2024. Both purchase originations and refinance transactions are forecasted to increase in 2025 when compared to 2024. We are expecting NIW to increase slightly in 2025 compared to 2024.
As of January 2026, the total average mortgage origination forecasts from Fannie Mae and the MBA indicate mortgage originations of $2.3 trillion in 2026, compared to an estimated $2.0 trillion in 2025. Both purchase originations and refinance transactions are forecasted to increase in 2026 when compared to 2025.
GSEs We must comply with a GSE's PMIERs to be eligible to insure loans delivered to or purchased by that GSE. The PMIERs include financial requirements, as well as business, quality control and certain transaction approval requirements.
PMIERs We operate under the requirements of the GSEs PMIERs and must maintain compliance with these requirements to be eligible to insure loans delivered to or purchased by that GSE. The PMIERs include financial requirements, as well as business, quality control and certain transaction approval requirements.
As of December 31, 2024, 50% of our primary RIF was written subsequent to December 31, 2021, 74% of our primary RIF was written subsequent to December 31, 2020, and 87% of our primary RIF was written subsequent to December 31, 2019. The pattern of claim frequency can be affected by many factors, including annual persistency and deteriorating economic conditions.
As of December 31, 2025, 44% of our primary RIF was written subsequent to December 31, 2022, 61% of our primary RIF was written subsequent to December 31, 2021, and 80% of our primary RIF was written subsequent to December 31, 2020. The pattern of claim frequency can be affected by many factors, including Annual Persistency and deteriorating economic conditions.
The amount of premiums we cede in 2025 will be affected by any changes in our reinsurance coverage. Premiums we cede under our quota share transactions are also impacted by the profit commission we receive. The amount of profit commission is variable year-to-year and is dependent on the amount of losses incurred ceded.
Premiums we cede under our quota share transactions are also impacted by the profit commission we receive. The amount of profit commission is variable year-to-year and is dependent on the amount of ceded losses incurred. Increases in ceded losses incurred will benefit our losses incurred line, but will result in lower profit commission and higher ceded premiums.
Our reinsurance transactions enable us to earn higher returns on our Minimum Required Assets than we would without them because they generally reduce the Minimum Required Assets we must hold under PMIERs. However, reinsurance may not always be available to us, or available only on terms, or costs, that we find unacceptable.
Our reinsurance transactions enable us to earn higher returns on our Minimum Required Assets than we would without them because they generally reduce the Minimum Required Assets we must hold under PMIERs.
For additional information on how our business may be impacted see our risk factor titled “ Downturns in the domestic economy or declines in home prices may result in more homeowners defaulting and our losses increasing, with a corresponding decrease in our returns. ” The future effects of climate change on our business are uncertain.
For additional information on how our business may be impacted see our risk factor titled “ Economic downturns and/or declines in home prices may lead to increased losses. ” The future effects of climate change on our business are uncertain.
For information about possible effects, please refer to our risk factor titled “ Pandemics, hurricanes and other disasters may adversely impact our results of operations and financial condition. ” Our results of operations are affected by: Premiums written and earned Premiums written and earned in a year are influenced by: • NIW, which increases IIF.
For information about possible effects, please refer to our risk factor titled “ The effects of pandemics, severe weather events, or other disasters may adversely impact our results of operations and financial condition. ” Our results of operations are affected by: Premiums Written and Earned Premiums written and earned during a given period are primarily driven by the insurance in force during all or a portion of the period.
A change in the average IIF in the current period compared to an earlier period is a factor that will increase (when the average in force is higher) or reduce (when it is lower) premiums written and earned in the current period, although this effect may be enhanced (or mitigated) by the factors discussed above.
A change in the average IIF in the current period compared to an earlier period is a factor that will increase (when the average in force is higher) or reduce (when it is lower) premiums written and earned in the current period, although this effect may be enhanced (or mitigated) by the following factors: • NIW: Increases IIF and is influenced by the volume of low down payment home mortgage originations and competition to provide credit enhancement on those mortgages from the FHA, the VA, and other mortgage insurers.
Increases in ceded losses incurred will benefit our losses incurred line, but will result in lower profit commission and higher ceded premiums. Factors that affect the amount of premiums we earn from our IIF are further discussed in our "Consolidated Results of Operations - Premium yield." Investment income Net investment income is a material contributor to our results of operations.
Factors that affect the amount of premiums we earn from our IIF are further discussed in our " Consolidated Results of Operations - Premium yield." Investment Income Net investment income is a material contributor to our results of operations. We expect net investment income in 2026 to be relatively flat compared to 2025.
Investment income Our investment portfolio is composed principally of investment grade fixed income securities. The principal factors that influence investment income are the size of the portfolio and its yield.
See Note 7 – “Reinsurance” to our consolidated financial statements for a discussion of our reinsurance transactions. Investment Income Our investment portfolio is composed principally of investment grade fixed income securities. The primary factors that influence investment income are the size of the portfolio and its yield.
MGIC Investment Corporation 2024 Form 10-K | 52 MGIC Investment Corporation and Subsidiaries Losses incurred Losses incurred are the current expense that reflects claim payments, costs of settling claims, and changes in our estimates of payments that will ultimately be made as a result of delinquencies on insured loans.
Losses Incurred Losses incurred are the current expense that reflects claim payments, costs of settling claims, and changes in our estimates of payments that will ultimately be made as a result of delinquencies on insured loans. As explained under “ Critical Accounting Estimates ” below, we recognize an estimate of this expense only for delinquent loans.
Wisconsin, where MGIC is domiciled, has begun the process to replace current Mortgage Insurance regulations with the Model Act, though it is expected that some changes will be made before formal adoption.
Wisconsin, where MGIC is domiciled, has begun the process to replace current Mortgage Insurance regulations with the Model Act; however it is expected that modifications will be made before formal adoption. Regulatory and Legislative Developments Credit Score Modernization Recently, FHFA, the GSEs and industry stakeholders have undertaken efforts to modernize credit scoring.
The level of invested assets will primarily be impacted by the amount of cash we expect to use in financing activities relative to our cash from operations. The magnitude of any change in our invested asset level will be subject to the timing of our financing activities. Losses Losses incurred, net is impacted by the level of new delinquency notices.
The amount of investment income will be impacted by the change in the yield we can earn on investments and the level of invested assets. The level of invested assets will primarily be impacted by the amount of cash we expect to use in financing activities relative to our cash from operations.
The PMIERs provide that the GSEs may amend any provision of the PMIERs or impose additional requirements with an effective date specified by the GSEs. MGIC is in compliance with the PMIERs and eligible to insure loans purchased by the GSEs. In August 2024, the GSEs issued updates to the calculation of Available Assets.
The PMIERs provide that the GSEs may amend any provision of the PMIERs or impose additional requirements with an effective date specified by the GSEs.
Our unearned premium decreased to $120.4 million at December 31, 2024 from $157.8 million at December 31, 2023. Our net premiums written and earned are primarily impacted by the changes in the direct premiums written and earned noted above and by the amount of premiums we cede under our quota share and excess of loss reinsurance transactions.
Our net premiums written and earned are primarily impacted by the changes in the direct premiums written and earned and by the amount of premiums we cede under our quota share and excess of loss reinsurance transactions. The amount of premiums we cede in 2026 will be affected by changes in our reinsurance coverage.
Interest expense Interest expense reflects the interest associated with our outstanding debt obligations discussed in Note 7 – “Debt” to our consolidated financial statements and under “ Liquidity and Capital Resources ” below.
Interest Expense Interest expense reflects the interest associated with our outstanding debt obligations discussed in Note 3 – “Debt” to our consolidated financial statements and under “ Liquidity and Capital Resources ” below. Other Certain activities that we do not consider being part of our fundamental operating activities may also impact our results of operations and are described below.
The level of new delinquencies has historically followed a seasonal pattern, with new delinquencies in the first half of the year lower than new delinquencies in the latter half of the year. The state of the economy, local housing markets, pandemics, natural disasters, and various other factors may result in delinquencies not following the typical pattern.
The level of new delinquencies has historically followed a seasonal pattern, with new delinquencies in the first half of the year lower than new delinquencies in the latter half of the year.
Based on our application of PMIERs, MGIC's Available Assets under PMIERs totaled $5.8 billion, an excess of $2.2 billion over its Minimum Required Assets at December 31, 2024. BUSINESS OUTLOOK FOR 2025 Our outlook for 2025 should be viewed against the backdrop of the business environment discussed above.
Based on our application of the PMIERs as of December 31, 2025, MGIC’s Available Assets totaled $5.7 billion, or $2.5 billion in excess of its Minimum Required Assets.
Many factors affect NIW, including the volume of low down payment home mortgage originations and competition to provide credit enhancement on those mortgages from the FHA, the VA, and other mortgage insurers. Other alternatives to mortgage insurance also impact NIW, including GSE programs that may reduce or eliminate the demand for mortgage insurance.
PMI market share is also impacted by the market share of total originations of the FHA and VA, and other alternatives to mortgage insurance, including GSE programs that may reduce or eliminate the demand for mortgage insurance.
For additional information about our reinsurance transactions, see our risk factor titled “ Reinsurance may be unavailable at current levels and prices, and/or the GSEs may reduce the amount of capital credit we receive for our reinsurance transactions. ” in Item 1A .
For additional information see our risk factors titled "Our MGIC Investment Corporation 2025 Form 10-K | 46 underwriting practices and the mix of business we write affects our Minimum Required Assets under the PMIERs, our premium yields and the likelihood of losses occurring" and " Reinsurance may be unavailable at current levels and prices, and/or the GSEs may reduce the amount of capital credit we receive for our reinsurance transactions ." in Item 1A . • Failure to meet certain transactional approval conditions imposed by PMIERs.
Our insurance in force increased during the year as a result of an increase in NIW offset partially by cancellations.
Business Environment Mortgage Insurance Market The strong credit quality of our insurance portfolio reflects several years of favorable housing fundamentals, and in our view, favorable risk characteristics on our recently insured loans. Our IIF increased during the year as a result of an increase in NIW offset partially by cancellations.
NIW does not include loans previously insured by us that are modified, such as loans modified under HARP. • Cancellations, which reduce IIF. Cancellations from refinancings may occur when borrowers achieve the required amount of home equity through loan amortization, loan payoffs, or home price appreciation.
Other alternatives to mortgage insurance also impact NIW, including GSE programs that may reduce or eliminate the demand for mortgage insurance. • Cancellations: Reduce IIF and occur when borrowers refinance or achieve the required amount of home equity through loan amortization, loan payoffs, or home price appreciation.
Competition PMI The private mortgage insurance industry is highly competitive and is expected to remain so. Our competitors primarily include other private mortgage insurers and governmental agencies, principally the FHA and VA.
E - Estimated, F- Forecast Source: Fannie Mae and MBA estimates/forecasts as of January 2026. Amounts represent the average of all sources. Competitive Environment The private mortgage insurance industry is highly competitive and is expected to remain so. We compete against five other private mortgage insurers, as well as governmental agencies, principally the FHA and VA.
MGIC Investment Corporation 2024 Form 10-K | 46 OVERVIEW This Overview of the MD&A highlights selected information and may not contain all of the information that is important to readers of this Annual Report. Hence, this Overview is qualified by the information that appears elsewhere in this Annual Report, including the other portions of the MD&A.
MGIC Investment Corporation 2025 Form 10-K | 44 Overview The following discussion highlights factors influencing our financial results and results of operations and may not contain all of the information that is important to readers of this Annual Report. It should be read in conjunction with the consolidated financial statements and related notes found under Item 8. contained herein.
MGIC Investment Corporation 2024 Form 10-K | 48 MGIC Investment Corporation and Subsidiaries Government programs PMI also competes against government mortgage insurance programs such as the FHA, VA, and USDA, primarily for lower FICO score business. The combined market share of primary mortgage insurance written by government programs continues to exceed that written by PMI in both 2024 and 2023.
MGIC Investment Corporation 2025 Form 10-K | 45 PMI's market share is primarily impacted by competition from government mortgage insurance programs, particularly in segments of the market characterized by lower credit scores. The PMI industry's market share in 2025 decreased compared to the market share in 2024.
Generally, on our primary business, the highest claim frequency years have been the third and fourth year after loan origination.
The magnitude of any change in our invested asset level will be subject to the timing of our financing activities. Losses Incurred Losses incurred, net is impacted by the level of new delinquency notices. Generally, on our primary business, the third and fourth year after loan origination have been periods with the highest level of new delinquency notices.
Removed
Summary of financial results of MGIC Investment Corporation Year Ended December 31, (in thousands, except per share data) 2024 2023 Change Selected statement of operations data Net premiums earned $ 970,807 $ 952,551 2 % Investment income, net of expenses 244,640 214,740 14 % Losses incurred, net (14,861) (20,856) 29 % Other underwriting and operating expenses, net 209,324 226,004 (7) % Income before tax 968,709 902,229 7 % Provision for income taxes 205,715 189,280 9 % Net income 762,994 712,949 7 % Diluted income per share $ 2.89 $ 2.49 16 % Non-GAAP Financial Measures (1) Adjusted pre-tax operating income $ 975,623 $ 916,778 6 % Adjusted net operating income 768,456 724,443 6 % Adjusted net operating income per diluted share $ 2.91 $ 2.53 15 % (1) See "Explanation and Reconciliation of our use of Non-GAAP Financial Measures." SUMMARY OF 2024 FINANCIAL RESULTS Net income for 2024 was $763.0 million (2023: $712.9 million) and diluted income per share was $2.89 (2023: $2.49).
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Refer to "Mortgage Insurance Portfolio" for information on our NIW mix during 2025. Our NIW is affected by the total mortgage originations, the percentage of total mortgage originations using PMI, and our market share within the PMI industry.
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The increase in net income is primarily due to an increase in investment income, net of expenses, an increase in net premiums earned, and a decrease in other underwriting and operating expenses, net. This was partially offset by an increase in losses incurred, net and an increase in our provision for income taxes.
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The total amount of mortgage originations is generally influenced by the level of new and existing home sales, interest rates, the percentage of homes purchased for cash, and the level of refinance activity. PMI market share of total mortgage originations is influenced by the mix of purchase and refinance originations.
Removed
Diluted income per share increased primarily due to an increase in net income and a decrease in the number of diluted weighted average shares outstanding. Adjusted net operating income for 2024 was $768.5 million (2023: $724.4 million) and adjusted net operating income per diluted share was $2.91 (2023: $2.53).
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The increase in total mortgage originations in 2025 as compared with 2024 reflects a modest decrease in interest rates during 2025 contributing to an increase in refinance and purchase originations during the year. Total mortgage originations are forecasted to be higher in 2026, compared with 2025.
Removed
The increase in adjusted net operating income in 2024 compared to 2023 is primarily due to an increase in net income. The increase in 2024 adjusted net operating income per diluted share compared to 2023 is primarily due to an increase in adjusted net operating income and a decrease in the number of diluted weighted average shares outstanding.
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The total estimated mortgage insurance volume is shown below. Estimated Total of PMI, FHA, USDA, and VA Primary Mortgage Insurance (in billions) Year Ended December 31, 2025 Year Ended December 31, 2024 Primary mortgage insurance $818 $727 Source: Inside Mortgage Finance - February 19, 2026 or SEC filings.
Removed
Premiums earned for 2024 were $970.8 million, compared with $952.6 million in the prior year. The increase in premiums earned compared with the prior year is primarily due to a decrease in ceded premiums. Net investment income in 2024 was $244.6 million, compared with $214.7 million in the prior year.
Added
Estimated Primary MI Market Share (% of total primary MI volume) Year Ended December 31, 2025 Year Ended December 31, 2024 PMI 38.0% 41.1% FHA 34.3% 33.5% VA 26.8% 24.5% USDA 0.9% 0.9% Source: Inside Mortgage Finance - February 19, 2026 or SEC filings. MGIC's estimated market share within the PMI industry is shown in the table below.
Removed
The increase in net investment income was due to an increase of 42 basis points in the average investment yield. Losses incurred, net were $(14.9) million, compared with $(20.9) million in the prior year.
Added
Estimated MGIC Market Share (% of total primary private MI volume) Year Ended December 31, 2025 Year Ended December 31, 2024 MGIC 19.4% 18.6% Source: Inside Mortgage Finance - February 19, 2026 or SEC filings.
Removed
While new delinquency notices added $197.6 million to losses incurred in 2024, our re-estimation of loss reserves on previously received delinquency notices resulted in favorable development of $212.5 million. For the year ended December 31, 2023, new delinquency notices added approximately $187.7 million, our re-estimation of loss reserves on previously received delinquency notices resulted in favorable development of $208.5 million.
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MGIC is in compliance with the PMIERs and eligible to insure loans purchased by the GSEs; however, if our Available Assets fall below our Minimum Required Assets, we would not be in compliance with the PMIERs.
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The favorable development for both periods primarily resulted from a decrease in the expected claim rate on previously received delinquencies. Home price appreciation in recent years has allowed some borrowers to cure their delinquencies through the sale of their property. Underwriting and other expenses, net were $209.3 million, compared to $226.0 million in the prior year.
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Our ability to continue to comply with PMIERS financial requirements could be affected by several factors, including: • Amendments to PMIERs, or changes to the way the GSEs interpret the existing PMIERs. • An increase in the number of loan delinquencies.
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The decrease in underwriting and other expenses, net was primarily due to a decrease in pension expenses and a decrease in expenses related to professional and consulting services. Pension expenses were higher in 2023 due to settlement accounting charges.
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If we are required to hold more capital relative to our insured loans it could adversely affect our business and results of operations. • The credit we receive for the investments in our investment portfolio.
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MGIC Investment Corporation 2024 Form 10-K | 47 MGIC Investment Corporation and Subsidiaries Our provision for income taxes increased to $205.7 million in 2024 compared to $189.3 million in 2023 primarily due to an increase in income before tax. Our effective tax rate for 2024 was 21.2% compared to 21.0% for 2023.
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Under PMIERs, specified assets are excluded, limited or haircut for purposes of being counted as Available Assets. • Changes to the amount of credit we receive for risk ceded under our QSR and XOL Transactions.
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BUSINESS ENVIRONMENT Economic conditions Mortgage originations increased in 2024 compared to 2023, reflecting an increase in refinance volumes, attributed to a brief decline in interest rates during 2024, while purchase origination activity remained relatively flat. The level of interest rates and home prices may change in the future.
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Such failure may restrict or delay us from taking certain actions that would be advantageous to our investors. GSE Reform FHFA placed the GSEs into conservatorship on September 7, 2008 and the FHFA has the authority to control and direct their operations.
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For information about the possible effects of such changes, see our risk factors titled " If the volume of low down payment home mortgage originations declines, the amount of insurance that we write could decline ,” and “ Downturns in the domestic economy or declines in home prices may result in more homeowners defaulting and our losses increasing, with a corresponding decrease in our returns. ” Mortgage insurance market The strong credit quality of our insurance portfolio reflects several years of favorable housing fundamentals, and in our view, generally favorable risk characteristics on our recently insured loans.
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Given that the Director of the FHFA serves at the pleasure of the President, the agency's agenda, policies and actions may be influenced by the then-current administration. Congress and executive branch officials have periodically proposed various plans for the reform of the GSEs, including through privatization and/or termination of FHFA's conservatorship.
Removed
The percentage of our NIW with DTI ratios over 45% and LTVs over 95% will fluctuate based on the mortgage conditions such as the percentage of NIW from purchase transactions, changes in home prices, changes in interest rates, and GSE activities. Refer to "Mortgage Insurance Portfolio" for information on our NIW mix during 2024.
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However, it is unclear what reforms will ultimately be implemented, if any, and what the time frame for any such reforms will be. The potential impact of any such plan on our business and financial results remains uncertain.
Removed
GSE Risk Share Transactions In 2018, the GSEs initiated secondary mortgage market programs with loan level mortgage default coverage provided by various (re)insurers that are not mortgage insurers governed by PMIERs, and that are not selected by the lenders.
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These efforts center on the transition to reportedly more inclusive models that leverage trended and alternative data. In 2022, FHFA announced the validation of two new credit score models – VantageScore 4.0 and FICO 10T.

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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 changeWe manage credit risk via our investment policy guidelines which primarily require us to place our investments in investment grade securities and limit the amount of our credit exposure to any one issue, issuer and type of instrument. Guideline and investment portfolio detail is available in "Business – Section C, Investment Portfolio" in Item 1 .
Biggest changeWe manage credit risk via our investment policy guidelines which primarily place our investments in investment grade securities and limit the amount of our credit exposure to any one issue, issuer and type of instrument. Guideline and investment portfolio detail is available in "Business – Section E, Investment Portfolio" in Item 1 .
For an upward shift in the yield curve, the fair value of our portfolio would decrease and for a downward shift in the yield curve, the fair value would increase. A discussion of portfolio strategy appears in "Management's Discussion and Analysis – Balance Sheet Review– Investment Portfolio" in Item 7 . MGIC Investment Corporation 2024 Form 10-K | 81
For an upward shift in the yield curve, the fair value of our portfolio would decrease and for a downward shift in the yield curve, the fair value would increase. A discussion of portfolio strategy appears in "Management's Discussion and Analysis – Balance Sheet Review– Investment Portfolio" in Item 7 . MGIC Investment Corporation 2025 Form 10-K | 76
At December 31, 2024, the effective duration of our fixed income investment portfolio was 3.9 years, which means that an instantaneous parallel shift in the yield curve of 100 basis points would result in a change of 3.9% in the fair value of our fixed income portfolio.
At December 31, 2025, the effective duration of our fixed income investment portfolio was 4.2 years, which means that an instantaneous parallel shift in the yield curve of 100 basis points would result in a change of 4.2% in the fair value of our fixed income portfolio.

Other MTG 10-K year-over-year comparisons