Essent Group Ltd.

Second quarter 2026 net income was $190 million, or $2.08 per diluted share, versus $1.93 in the second quarter a year ago and $1.82 last quarter. Annualized return on average equity was 13.4%, and book value per share was $63.1 at June 30. Mortgage insurance premium earned was $216 million; average base premium earned was 40 basis points, down 1 basis point sequentially, and average net premium rate was 35 basis points, unchanged. The mortgage insurance provision for losses and loss adjustment expenses was $29.4 million, versus $15.3 million a year ago, and operating expenses were $31.9 million. Reinsurance combined ratio was 77.9% in the quarter. Consolidated net investment income was $61.6 million, and income from other invested assets was $19.4 million. As of June 30, cash and investments totaled $6.6 billion, with $5.7 billion of GAAP equity, $1.1 billion of cash and investments at the holding companies, and $500 million of senior unsecured notes outstanding. The company said it continues to expect approximately $320 million of written premium for its P&C reinsurance activity in 2026, with roughly half earned this year at a combined ratio in the high 90s.

Mark Casale emphasized that Essent’s Buy, Manage & Distribute model and strong cash generation give the company flexibility to invest in growth and return capital. He said the mortgage insurance business continues to benefit from a benign credit environment, but affordability constraints are keeping originations muted and the company expects portfolio growth to remain in a pause near term. He also framed title, P&C reinsurance, and strategic investments as capital-light “call options” that can deepen relationships and support book value over time.

David Weinstock highlighted the quarter’s earnings bridge and segment details, including $216 million of mortgage insurance premium earned, a 40 basis point average base premium earned, and a 35 basis point net premium rate. He noted the mortgage insurance loss provision of $29.4 million, the 2.53% default rate, and a 14.8% expense ratio, while PMIERs sufficiency remained strong at 172% with $1.5 billion in excess available assets. He also said first-half reinsurance net premiums written were $249 million versus $31 million a year ago, net investment income increased to $61.6 million in the quarter, holding company liquidity included $500 million of undrawn revolver capacity, and capital returns included $115 million of dividends from Essent Guaranty, a $100 million dividend from Essent Re, and $191 million of share repurchases.

Analysts focused on the stability of the premium yield, competitive pricing, VantageScore adoption, AI usage, and the economics/risk profile of the P&C reinsurance and title businesses. Management said the 40 basis point premium yield is roughly in line with the full-year guide and could drift lower over time, but not dramatically, and described competition as stable with no real credit competition because of GSE guardrails. On VantageScore, Mark Casale said any arbitrage should get tightened by the GSEs over time and that Essent’s model is relatively score agnostic because it uses hundreds of variables. He also said AI usage is already meaningful but still early, with token costs immaterial relative to operating expenses, and expects AI to improve pricing, claims handling, and efficiency over time.